If your long-term disability (LTD) claim has been denied — or your insurance company has terminated benefits you were already receiving — your denial letter will probably tell you that you have the right to appeal.

But does that mean you should appeal?

Not necessarily.

For many people with denied long-term disability claims in Ontario, there may be two potential paths:

1. Appeal the denial or termination to the insurance company; or
2. Start a court action against the insurance company.

You generally do not have to exhaust the insurer’s internal appeal process before starting a lawsuit. More importantly, choosing to appeal does not necessarily stop the clock on the limitation period for commencing a court action.

That’s why the decision to appeal or sue should be made carefully — and as early as possible.

What Is an LTD Appeal?

An LTD appeal asks the insurance company to reconsider its decision to deny or terminate your benefits.

Your denial letter will usually explain the insurer’s appeal process and may identify additional information it wants to receive.

That could include:

• Updated medical records;
• Reports from treating physicians or specialists;
• Test results;
• Information about your symptoms and functional limitations;
• Information about your treatment; or
• Evidence addressing your ability to perform the duties of your occupation.

The insurance company then reviews the additional evidence and decides whether to reverse its original decision.

If the appeal is successful, your LTD benefits may be approved or reinstated, subject to the terms of your policy.

Do I Have to Appeal an LTD Denial Before I Can Sue?

Generally, no.

In many LTD cases, you are not required to complete the insurance company’s internal appeal process before starting a court action.

This is an important distinction because an insurer’s denial letter can sometimes leave claimants with the impression that appealing is simply the next required step.

It may not be.

Depending on the circumstances, starting a court action may be an available alternative.

When Does Appealing an LTD Denial Make Sense?

An appeal may be worth considering when there is important new evidence capable of addressing the reason your claim was denied.

For example, imagine your insurer denied your claim because there was insufficient medical evidence explaining why your condition prevented you from performing your occupation.

After the LTD denial, your treating specialist provides a detailed report explaining:

• Your diagnosis;
• Your symptoms;
• The severity and frequency of those symptoms;
• Your functional limitations;
• Your treatment and response to treatment; and
• Why those limitations prevent you from performing the essential duties of your occupation.

That evidence may materially change the insurer’s assessment.

An appeal may also make sense where relevant medical records were missing from the original claim, your medical condition has materially changed, or another piece of persuasive evidence can directly address the insurer’s stated reason for denying your benefits.

The important question isn’t simply whether you can provide more evidence.

It is whether you can provide better or new evidence that addresses the reason for the denial.

When Might an LTD Appeal Not Be the Best Option?

An appeal may be less attractive when the insurer already has substantial medical evidence supporting your disability but has nevertheless concluded that you don’t satisfy the policy’s definition of disability.

Simply resubmitting essentially the same evidence may produce essentially the same result.

There may also be cases where the dispute is based on:

• Surveillance;
• The insurer’s interpretation of your medical evidence;
• A disagreement about your functional abilities;
• The definition of disability under the policy;
• The duties of your occupation;
• A contractual or policy issue; or
• Another issue unlikely to be resolved by obtaining additional medical records.

In these situations, it may be appropriate to consider whether litigation is a better way to challenge the insurer’s decision.

What Happens If You Sue Your LTD Insurance Company?

A court action changes the nature of the dispute.

Instead of continuing to ask the insurance company to reconsider its own decision through its internal process, you are challenging the denial through the legal system.

Depending on the facts of the case, an LTD lawsuit may ultimately resolve through a negotiated settlement, reinstatement of benefits or, if the parties cannot resolve the dispute, a trial.

Many LTD lawsuits resolve through negotiation or mediation without going to trial.

How Do I Decide Whether to Appeal or Sue?

There is no single answer that applies to every denied LTD claim.

At Mulqueen Disability Law, three of the most important factors we consider are:

1. Why Did the Insurance Company Deny Your LTD Claim?

Start with the denial letter.

An insurer may deny or terminate LTD benefits because it believes:

• There isn’t enough medical evidence;
• Your medical information doesn’t support total disability;
• You can perform your own occupation;
• You can perform another occupation;
• Surveillance or other evidence is inconsistent with your reported limitations;
• You haven’t complied with treatment requirements; or
• A provision or exclusion in the policy applies.

Understanding the insurer’s reasoning is essential because it helps determine whether additional evidence could realistically change the decision.

2. What Evidence Is Available?

Next, consider what evidence the insurer already has and what additional evidence could reasonably be obtained.

A diagnosis by itself doesn’t necessarily establish entitlement to LTD benefits.

The evidence often needs to explain how your medical condition affects your ability to function and, specifically, how those limitations affect your ability to work.

The right medical evidence can make an enormous difference.

But if the insurer already has strong supporting evidence and has chosen to deny the claim anyway, another appeal may not accomplish very much.

3. How Much Time Do You Have?

This can be the most important question of all.

In Ontario, there is generally a two-year limitation period for starting a court action involving a denied LTD claim.

However, determining exactly when a limitation period begins — and whether a particular situation creates an exception — can be legally complicated.

For that reason, it is safest not to assume you have two years from the date of your latest appeal decision.

An internal appeal may not stop the limitation period from running.

If your LTD claim has been denied or terminated, obtaining legal advice promptly can help you understand the deadline that may apply to your particular claim.

Can I Appeal My LTD Denial Without a Lawyer?

Yes. Some people choose to prepare their own LTD appeal.

That may be reasonable where the reason for the denial is clear and strong new evidence is available to address it.

But an effective appeal should do more than send the insurer another stack of medical records.

Ideally, you should understand:

• Exactly why your claim was denied;
• What evidence the insurer says is missing;
• Whether that evidence can be obtained;
• Whether the new evidence actually answers the insurer’s concerns;
• The deadline for submitting an appeal; and
• The limitation period that may apply to a court action.

If you aren’t sure, consider speaking with an experienced long-term disability lawyer before submitting your appeal.

Does Appealing an LTD Denial Extend the Deadline to Sue?

You should not assume that it does.

This is one of the most important points for someone considering an LTD appeal.

An insurance company may continue communicating with you and reviewing appeal materials while a legal limitation period continues to run.

The existence of an ongoing appeal process therefore should not be treated as proof that you still have plenty of time to start a lawsuit.

If you are unsure about your limitation period, seek legal advice promptly.

What If My LTD Benefits Were Terminated Rather Than Initially Denied?

The same basic considerations can apply.

Someone who received LTD benefits for months or years before the insurer terminated the claim may still need to decide whether to appeal the termination or challenge it through litigation.

In fact, a termination can raise additional questions.

Why did the insurer change its position?

Did your medical condition actually improve?

Did the definition of disability under the policy change?

Is the insurer relying on surveillance?

Was there an insurer medical examination?

Did the insurer conclude that you can perform another occupation?

The answers can help determine the appropriate strategy.

What If I’m Unionized?

Unionized employees can present additional legal issues.

Depending on the wording of the collective agreement, an employee may be required to challenge an LTD denial through the grievance and arbitration process rather than through a court action.

There may also be different deadlines.

If you’re unionized, consider obtaining advice from both your union and a disability lawyer about the appropriate process.

Frequently Asked Questions About Appealing or Suing After an LTD Denial

Should I appeal my LTD denial?

It depends on why your claim was denied, whether useful new evidence is available and how much time you have to protect your right to start a court action. An appeal can make sense where persuasive new evidence directly addresses the reason for the denial.

Can I sue my LTD insurance company without appealing first?

In many cases, yes. There is generally no requirement that you exhaust the insurer’s internal appeal process before commencing a court action. Your particular policy and circumstances should still be reviewed.

How long do I have to sue an LTD insurance company in Ontario?

Ontario generally has a two-year limitation period for commencing a court action, but determining exactly when that period begins can be complicated. Don’t assume it runs from the date of your final appeal. Obtain legal advice about the deadline applicable to your particular claim.

Will submitting an appeal stop the two-year limitation period?

Do not assume that an internal appeal stops or extends the limitation period for starting a lawsuit.

What evidence should I include in an LTD appeal?

The most useful evidence will depend on why your claim was denied. Medical evidence that clearly explains your symptoms, treatment, functional limitations and why those limitations prevent you from performing the relevant occupational duties can be particularly important.

Should I hire a long-term disability lawyer before appealing?

Not every appeal requires a lawyer, but obtaining advice before appealing can help you understand the insurer’s reason for denial, the strength of the available evidence, the applicable limitation period and whether an appeal or litigation is likely to be the better strategy.

Your LTD Claim Was Denied. What Should You Do Next?

A denial letter isn’t necessarily the end of your LTD claim.

But it also doesn’t mean you should automatically follow the insurer’s appeal process.

The decision between an LTD appeal and a court action should be based on the particular facts of your claim — especially:

Why your benefits were denied.

What evidence is available.

How much time you have to protect your legal rights.

At Mulqueen Disability Law, we focus on disability insurance claims and represent clients with denied and terminated LTD claims throughout Ontario.

If your long-term disability benefits have been denied or terminated, contact us to discuss your situation and the options available to you.

This article provides general information only and is not legal advice. Every LTD claim is different. Speak with a lawyer about your individual circumstances.