If your long-term disability claim in Ontario has been denied during the “own occupation” period, you may assume your insurer has no further expectations of you.

That is often not how insurers approach it.

At Mulqueen Disability Law, we are increasingly seeing a troubling pattern:

Insurance companies deny LTD benefits, but later argue—often during litigation—that the claimant should have applied for CPP disability (CPP-D), and reduce what they are willing to pay because of it.

In some cases, insurers go further and argue that if you did not apply for CPP-D, you are not entitled to LTD benefits at all.

In our view, that position is often wrong.

The “Own Occupation” Period and LTD Claims

Most long-term disability policies in Ontario have two stages:

• The “own occupation” period (typically the first two years), and
• The “any occupation” period thereafter

During the own occupation period, you only need to show that you are unable to perform the essential duties of your own job.

You do not need to prove that you are incapable of all work.

If you are unsure how LTD benefits are assessed, you can read more here:

This distinction becomes critically important when insurers raise CPP-D issues.

CPP-D Has a Higher Disability Test

CPP-D is a different legal test.

According to Service Canada, CPP disability benefits are only available where a person has a disability that is both “severe and prolonged,” meaning they are incapable of regularly pursuing any substantially gainful occupation.

This is a significantly higher threshold than most LTD policies during the own occupation period.

In practical terms:

You can qualify for LTD and still not qualify for CPP-D.

The Problem We Are Seeing in LTD Litigation

Despite this difference, insurers are increasingly taking inconsistent positions.

We frequently see situations where:

• The insurer denies long term disability during the own occupation period, arguing the claimant is not disabled
• But later, during litigation or settlement discussions,
• The insurer argues the claimant should have applied for CPP-D
• And reduces the value of the claim based on CPP-D benefits that were never received

In some cases, insurers argue that failure to apply for CPP-D defeats the claim entirely.

This creates a fundamental contradiction.

If the insurer’s position is that you were not disabled enough for LTD, it is difficult to reconcile that with an argument that you were required to pursue CPP-D—which requires a higher level of disability.

Is Applying for CPP-D a Condition Precedent?

Many LTD policies contain provisions requiring claimants to apply for CPP-D.

Insurers often rely on this wording.

However, Canadian courts have repeatedly emphasized that conditions precedent must be clearly expressed in the policy, and not every obligation rises to that level.

Courts distinguish between:

• Entitlement to benefits (meeting the definition of disability), and
• Ongoing obligations (such as treatment, cooperation, or applying for other benefits)

For example, courts have held that policy provisions must be interpreted carefully and in context, and not every requirement will bar entitlement unless clearly stated (see Prystupa v. Desjardins Financial Security Life Assurance Company, 2018 ONCA 224).

In our view, and depending on the policy wording, a requirement to apply for CPP-D is not always a condition precedent—particularly where the insurer has already denied the claim.

The “Appropriate Treatment” Analogy

This distinction is reflected in how courts approach “appropriate treatment” provisions.

Insurers often argue that claimants must pursue treatment to remain eligible for LTD benefits.

However, courts have generally treated this as a reasonableness issue, not an automatic bar to entitlement. The focus is on whether treatment was reasonable, accessible, and likely to improve function—not strict compliance at all costs.

The same reasoning applies here.

If treatment provisions are not automatically conditions precedent, it is difficult to justify treating a CPP-D application requirement as one—especially after benefits have been denied.

What Happens When the Insurer Denies the Claim?

When an insurer denies LTD benefits, it is taking the position that:

You are not entitled to benefits under the policy.

Canadian courts have recognized that a party cannot always both deny liability and insist on strict compliance with contractual conditions. In some circumstances, this may amount to a waiver of those rights.

In practical terms:

An insurer cannot always rely on policy conditions after it has refused to pay the claim.

This is particularly relevant where the obligation—such as applying for CPP-D—is tied to the ongoing administration of benefits that were never paid.

The Practical Reality for Claimants

There is also a real-world problem with the insurer’s position.

Applying for CPP-D requires:

• Medical support
• Ongoing treatment
• Time and resources

But when LTD benefits are denied:

• Claimants may not be able to afford treatment
• Access to care may be limited
• They may not meet the stricter CPP-D test during the own occupation period

Requiring a claimant to apply for CPP-D in these circumstances is not always reasonable.

CPP-D Arguments Are Often Raised Too Late

We often see CPP-D issues raised only after the claim has been denied and litigation has begun.

At that stage, insurers attempt to:

• Reduce their financial exposure
• Assume CPP-D entitlement
• Argue failure to mitigate

If accepted, these arguments can significantly reduce the value of a claim.

However, they are not always supported by the policy or the law.

View a related issue involving how insurers misuse CPP-D in LTD claims.

Why This Matters for LTD Claims in Ontario

These arguments can have a significant financial impact.

They can:

• Reduce settlement values
• Shift responsibility onto the claimant
• Undermine otherwise valid disability claims

But in many cases, these positions are open to challenge.

You should not lose your LTD benefits because an insurer denied your claim and then imposed additional requirements after the fact.

What You Should Do If This Applies to You

If your LTD claim has been denied and your insurer is now raising CPP-D issues, it is important to take a closer look.

You should:

• Review your policy wording carefully
• Consider whether CPP-D was realistically available during the own occupation period
• Assess whether the insurer is taking inconsistent positions
• Be cautious about accepting reductions based on CPP-D

If your claim has been denied or your benefits reduced, you can learn more here.

Most importantly, do not assume the insurer’s position is correct.

Speak With an Ontario Disability Lawyer

At Mulqueen Disability Law, we focus exclusively on long-term disability claims in Ontario, including:

• Wrongful LTD denials
• CPP-D disputes
• Litigation and settlement negotiations

We regularly challenge insurer arguments that improperly reduce or deny benefits.

Contact a disability lawyer in Ontario today.

Further Information

For more information about CPP disability benefits:

• CPP disability benefits (Service Canada)
• CPP benefit details and indexing
• Long-term disability benefits in Ontario

Disclaimer

This article is for general informational purposes only and does not constitute legal advice. Every long-term disability claim is unique, and your entitlement depends on your specific policy and circumstances. You should seek legal advice tailored to your situation.

Frequently Asked Questions About LTD Denials and CPP-D

Can my LTD insurer deny my claim and still require me to apply for CPP-D?

Not necessarily. This depends on the policy wording and the circumstances. If the insurer has denied your claim, it may not be reasonable for them to insist on compliance with certain policy terms.

Is applying for CPP-D always required under an LTD policy?

Some policies include this requirement, but it is not always a condition precedent to entitlement—especially where the claim has been denied.

Can my insurer reduce my LTD claim because I didn’t apply for CPP-D?

They may try to, particularly in litigation. However, this position can often be challenged, especially during the own occupation period.

Do I have to apply for CPP-D during the own occupation period?

Not always. The CPP-D test is stricter than the LTD test during this period, and you may not qualify.

What should I do if my insurer is raising CPP-D issues after denying my claim?

You should seek legal advice before accepting any reduction or settlement based on CPP-D assumptions.