Disability, Critical Illness and Life Insurance Claims

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Disability, Critical Illness and Life Insurance Claims

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Insurers have sold disability, critical illness and life insurance to residents of Ontario for many years. These policies can be provided through “Group Insurance Programs.” These policies are governed by the terms of the Policy (so long as these terms were delivered). Insurers require that premiums be paid; however, when a claim is made the application, the policy and the claim will be reviewed by the Insurance Company.

In some cases, the claims made will be denied by the Insurance Company based on its allegation of misrepresentation in the application. Further, the claim could be denied by the Insurance Company alleging you failed to meet the terms of the policy or failed to provide the necessary details in the claim. A denial by the Insurance Company can be reviewed by the Courts if a legal proceeding is commenced within the prescribed time period.

Insurance Companies may discontinue benefits under a long term disability policy after it has started to make payments. Many disability insurance policies will change the definition for disability after two years. Often the Policy will provide you must be disabled from your own occupation during the first two years. After two years, the Policy may require that you must be disabled from “any occupation” for which you are reasonably suited. Again, any denial by the Insurance Company is reviewable by the Courts to ensure it complies with the laws of Ontario.

The Courts here also found that Insurance Companies who sell disability, critical illness or life insurance policies owe a duty of good faith and specifically not to act in bad faith. The Courts have described the obligations of good faith as follows:

“The relationship between an insurer and an insured is contractual in nature. The contract is one of utmost good faith. In addition to the express provisions in the policy and the statutorily mandated conditions, there is an implied obligation in every insurance contract that the insurer will deal with claims from its insured in good faith: Whiten v. Pilot Insurance Co. (1999), 42 O.R. (3d) 641 ... (Ont. C.A.).”

...The duty of good faith requires an insurer to act both promptly and fairly when investigating, assessing and attempting to resolve claims made by its insureds.

The first part of this duty speaks to the timeliness in which a claim is processed by the insurer. Although an insurer may be responsible to pay interest on a claim paid after delay, delay in payment may nevertheless operate to the disadvantage of an insured. The insured, having suffered a loss, will frequently be under financial pressure to settle the claim as soon as possible in order to redress the situation that underlies the claim. The duty of good faith obliges the insurer to act with reasonable promptness during each step of the claims process. Included in this duty is the obligation to pay a claim in a timely manner when there is no reasonable basis to contest coverage or to withhold payment. ...

The duty of good faith also requires an insurer to deal with its insured’s claim fairly. The duty to act fairly applies both to the manner in which the insurer investigates and assesses the claim and to the decision whether or not to pay the claim. In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced and reasonable manner. It must not deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy....”

702535 Ontario Inc. v. Lloyd’s London (2000), 184 D.L.R. (4th) 687 (Ont. C.A.) at 694-5

Free 30 Minute Consultation

If you have a question related to a disability insurance claim, please contact us at (613) 544-1482 to set up a 30 minute free consultation. This 30 minute free consultation, either by phone or in person, will provide you with valuable legal information related to your ability to make a successful claim for compensation.

 Contingency Fee Agreement

If we decide, after a review of your case, that you will likely be successful in obtaining compensation, a Contingency Fee Agreement will be offered to you. The Contingency Agreement has been used for decades by lawyers in the United States and Canada to ensure holders of insurance policies can have access to legal services. Traditionally, lawyers are hired by payment for services, as they are received. This is normally based on an hourly rate and reimbursement for expenses incurred on your behalf. A Contingency Fee Agreement permits the client to have the services of a solicitor and defer payment until a settlement or Court ordered compensation is awarded. As well, since we have evaluated your case, no fee will be charged if no compensation is offered or no Court awarded settlement is made.



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Read 6840 times Last modified on Wednesday, 14 January 2015 22:03

Tips to prepare for your legal suit

Tips to Aid your Disability, Critical Illness and Life Insurance Claims

 Each case turns on its individual facts and the facts that can be established or proven. It is important when dealing with disability claims in critical illness insurance claims to do the following:        

1.  Policy Received:
Determine if a copy of the Policy (with all the exceptions) was ever delivered to you prior to the claim being made. If not it is important to write to the Insurance Company or agent stating you never received a copy of the Policy.

2.  Medical Condition:
It is important that your medical condition is properly described and the limitations of such condition are established.

3.  Medical Treatments:
It is important that any medical treatments are understood by you as potential “cures” of the medical condition or potential “management” of the medical condition. If the treatments are not curing or managing the condition, it is important to report those immediately to the health practitioner overseeing your medical treatment.

4.  Journal:
It is important to keep a journal or record of the impact of your condition on your ability to function. It is difficult for the Court to understand your restrictions. A video or written record of the days when you are limited in your ability to function can be very important.

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