When you have long-term disability (LTD) insurance, you expect it to be your safety net when a serious illness or injury that prevents you from working. Unfortunately, many claimants discover proving you are totally disabled isn’t easy or straightforward. Common reasons that insurance companies deny claims include the lack of persuasive evidence of a disabling condition, non compliance with recommended treatment, missing information and insufficient evidence of functional limitations which cause an inability to work. The insurance claim agent plays a key role in evaluating your claim and deciding whether to approve or deny it, based on medical evidence and policy interpretation. It is important to document all interactions with the agent, as mistakes or misunderstandings can impact the outcome of your claim.

If you receive a denial letter, carefully read it to understand the reasons for the denial and highlight key information or deadlines. You should immediately request your entire claim file from the insurer after a denial. Document everything from the moment you receive the denial letter to ensure you have a clear record for any future appeal or legal action.

A denied disability claim can have devastating consequences, not just financially, but emotionally and physically as well. Understanding the real cost of a denial is crucial for anyone relying on LTD coverage and considering whether to appeal the insurance company’s decision.

1. Financial Fallout: More Than Just Lost Income

The most obvious impact of a denied LTD claim is the sudden loss of income. LTD benefits typically replace 50–70% of your salary, which can be the difference between stability and financial crisis. Without these benefits:

• Bills pile up quickly. Mortgage or rent, utilities, car payments, and everyday expenses don’t stop because you’re unable to work and earn an income.
• Medical costs can become crippling. Illness or injury often comes with ongoing treatment, prescriptions, and therapy—all of which can be expensive.
• Savings drain fast. Many people dip into retirement accounts or emergency funds, risking long-term financial security.

The ripple effect can lead to credit card debt, missed payments, and even bankruptcy. For families, the strain is multiplied, as spouses or partners may need to take on extra work or caregiving responsibilities.

2. Emotional, Stress, and Psychological Toll

Financial stress is only part of the story. A denied LTD claim often triggers feelings of frustration, anxiety, and hopelessness. You’ve paid premiums for years, expecting protection, only to receive a long term disability denial when you need your benefits most. Denied long term disability claims can lead to:

• Increased symptoms of depression and anxiety. The uncertainty about your future can exacerbate mental health conditions or lead to new mental health symptoms where the original disabling condition is a physical one.
• Strained relationships. Stress often spills over into family life, causing tension and conflict.
• Isolation. Many claimants feel abandoned by their insurer and misunderstood by others who don’t grasp the complexity of their medical condition and the fact that it makes them unable to work.

The emotional cost is hard to quantify, but it can hinder recovery from the disabling condition or cause new health issues.

3. Health Consequences: Delayed or Denied Care

When benefits are denied, many people cut back on paramedical care to save money. Skipping treatment such as psychological counseling, chiropractic care, physiotherapy and medication can worsen your condition. In some cases, this leads to increased disability or complications that could have been prevented with timely treatment.

4. Career and Future Earnings Impact

A denied LTD claim can derail your career trajectory. Without income or proper rehabilitation, returning to work becomes harder. Some individuals never re-enter the workforce, losing years of potential earnings and retirement contributions. Even if you eventually return, gaps in employment can affect promotions and job opportunities.

5. Legal and Administrative Costs

Appealing a denied LTD claim often requires professional help. Claimants may face legal fees and disbursements even if their lawyer works on a contingency fee basis, and most disability lawyers in Canada work on a contingency fee basis, meaning you do not owe legal fees unless your lawyer wins your case. Consulting an LTD lawyer or paralegal immediately after your claim is denied is recommended. If internal appeals fail, claimants have the option to take their case to court to pursue their LTD benefits. Hiring a lawyer and gathering medical evidence can be expensive and time-consuming. While many disability lawyers work on contingency, the process can still take a long time to be resolved, adding stress and uncertainty. This is why it is essential to hire an experienced LTD lawyer who knows how to persuade the insurer to deal with your claim.

Surveillance, Social Media, and Insurer Investigations: What You Need to Know

Insurance companies often rely on more than just your medical records when deciding whether to approve or deny your long term disability claim. A common business model among insurers is to use surveillance and social media monitoring to check if your reported symptoms and limitations match your daily activities. Private investigators may be hired to observe you in public, take photos or videos, and look for evidence that contradicts your stated inability to work.

Social media is another tool insurers use to gather information. Even innocent posts or photos can be taken out of context and used to argue that your condition is not as severe as you claim. For example, a picture from a family gathering or a comment about running errands can be misinterpreted and used against you.

To protect yourself, be mindful of what you share online and assume that anything you post could be reviewed by your insurer. Consistency is key—make sure your statements to your doctor, your insurer, and on social media all accurately reflect your symptoms and limitations. If you are being investigated, consult with a disability lawyer who can guide you on how to address surveillance evidence and present your case effectively.

Independent Medical Examinations and Conflicting Medical Opinions

When you file a long term disability claim, your insurance company may require you to attend an independent medical examination (IME) with a doctor of their choosing. The stated purpose of an IME is to obtain an objective assessment of your condition, but in practice, these exams often serve the insurer’s interests. The independent medical examiner may produce a report that downplays the severity of your symptoms or suggests you are able to work, which can be used to justify a denial.

Conflicting medical opinions are common in LTD cases. Your treating physician may provide detailed reports supporting your inability to work, while the insurer’s IME may reach a different conclusion. When this happens, the insurance company typically relies on the IME to deny your claim.

To strengthen your position, it’s important to gather comprehensive medical records, seek opinions from specialists, and ensure your doctors provide clear, detailed documentation of your diagnosis, symptoms, and functional limitations. If you receive a denial based on an IME, consult with a disability lawyer who has experience challenging these reports and can help you present stronger evidence to prove your entitlement to benefits.

Procedural Pitfalls: Late Filing, Non-Compliance, and Other Common Traps

Many LTD claims are denied not because of medical reasons, but due to procedural missteps. Insurance companies have strict requirements for filing claims, submitting forms, and providing supporting documentation. Missing a deadline, failing to submit required information, or not following your doctor’s recommended treatment can all result in a claim denied.

The “Any Occupation” Definition Change: A Hidden Hurdle

One of the most significant challenges in long term disability insurance is the change in the definition of disability that typically occurs after two years. In the beginning, most LTD policies define disability as the inability to perform the duties of your “own occupation.” After two years, the definition usually shifts to “any occupation,” meaning you must prove you are unable to work in any job for which you are reasonably suited by education, training, or experience.

This change is a common reason for LTD denial at the two-year mark. Insurers may argue that you can perform some type of work, even if it is not in your previous field or at your previous income level. To address this hurdle, it’s important to gather evidence that highlights the severity and unique impact of your condition, including vocational assessments and detailed medical reports that explain why you cannot function in any suitable occupation.

If you are approaching the two-year limitation period or have received notice of a definition change, consult with a disability lawyer who can help you prepare the necessary evidence and argue your case effectively.

Legal Deadlines: How Long Do You Have to Act?

If your LTD claim is denied, it’s crucial to act quickly. There are strict legal deadlines for appealing a denial or filing a lawsuit against your insurance company. In most cases, you have a two-year limitation period from the date of the denial letter to start legal action. Missing this deadline can mean losing your right to pursue your claim, no matter how strong your case may be.

Deadlines can vary depending on your policy language and the type of claim, so it’s important to check your denial letter and consult with a disability lawyer as soon as possible. Lawyers with expertise in LTD claims can help you estimate the best course of action, ensure all paperwork is filed on time, and guide you through the legal process. Acting promptly is the best way to protect your rights and maximize your chances of winning the compensation you are entitled to.

Why Are Long Term Disability Insurance Claims Denied?

There are several types of reasons why long term disability (LTD) claims are denied, and understanding these can help employees avoid common pitfalls. LTD policies often define ‘disability’ in specific terms that may change after a certain period, typically two years, which can affect your eligibility for benefits.

The most common reasons a claim for long term disability will be refused include:

• Insufficient medical evidence. The insurance company disagrees that the medical documentation supports disability. Focusing on gathering good, persuasive evidence is crucial to win your case.
• Policy exclusions. Long term disability claims can be denied because you have failed to follow your doctor’s advice, because you have a pre-existing condition which is excluded by the policy, or because you suffer from a specific condition which is excluded from coverage.
• Pre-existing condition clauses. Claims may be denied if the condition was treated within a certain timeframe before coverage began.
• Refusing to attend an independent medical examination. The insurance company has a right to send you to an independent medical examiner in order to determine if you qualify for disability insurance. Refusing to attend the appointment will cause your disability claim to be denied.
• Missed deadlines or paperwork errors. Administrative mistakes, such as missing important days or submitting incomplete paperwork, can result in automatic denials. You have a limited number of days to act after receiving a denial letter.
• Failing to provide requested information. When your insurance company requests information, fighting with them about whether they need the additional evidence will likely result in a denial.
• Change in definition of disability. Claims can be denied if the insurer believes you can work in another occupation after the definition of total disability changes, which is a common tactic used after the initial period of coverage.
• Surveillance** and social media.** Insurers sometimes use these to dispute your limitations. Insurance companies may use surveillance, sometimes without your knowledge, and may hire a private investigator to gather evidence, but this is often superficial and not conclusive, especially for non-visible disabilities.

Insurance companies are required to explain why they denied a claim in the denial letter, and you should carefully review the insurer’s judgment and highlight any errors or omissions. You have a limited time to appeal the denial, typically within two years, and missing the appeal deadline could mean losing your right to fight the decision. The steps you can take after a denial include appealing internally with the insurance company or externally through the courts. However, an internal appeal is often not recommended as it may be a waste of time, and going to court may be a better option. You should gather new, persuasive evidence to support your appeal.

The limitation period for filing a lawsuit after a final denial is typically two years from the date of the denial, so taking legal action promptly is important. Employees who have their LTD claims denied may benefit from finding a disability lawyer with expertise in this area to challenge the insurer’s judgment. If you are interested in pursuing your long term disability benefits, you can book a consultation to discuss your options. Winning your case may require strong evidence and legal expertise, and you have the option to sue if appeals fail.

What Can You Do If Your Claim Is Denied?

Here are the steps you should follow after your LTD claim is denied:

• Request a detailed denial letter. This explains the insurer’s reasoning.
• Gather additional evidence. Medical records, specialist opinions, and vocational assessments can strengthen your case.
• Consulting an experienced LTD lawyer or paralegal immediately after your claim is denied is crucial. They understand the appeals process and can fight for your rights.
• Consider your options for appeal. You may have the option to appeal internally with the insurer or pursue external options such as filing a lawsuit. Choosing the right option can impact the outcome and timing of securing your benefits.
• Stay organized, consistent and persistent. Appeals take time, but persistence pays off. Be consistent when you tell your story – do not exaggerate or overstate your symptoms. Keep track of what you have said about your condition and your ability to function.

The Bottom Line

The real cost of a denied LTD claim goes far beyond lost benefits. It affects your finances, health, emotional well-being, and future security. If you’re facing a denial, don’t give up. Seek professional help, understand your rights, and fight for the coverage you deserve. LTD insurance is meant to protect you—make sure it does.

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Our experienced disability lawyers are practical and know how to approach the legal process efficiently. We are a firm of six women who dedicate our practices to litigating cases for injured and disabled plaintiffs. We have four senior lawyers who have 20 to 30 years of experience representing clients and two bright, hard working and committed young lawyers who handle their own files and support the more senior lawyers when necessary.

Reach out to us today to schedule a free consultation and determine if we are the right law firm for you.