Active Employment and Long-Term Disability: What It Means for Your LTD Claim in Canada

What Does “Active Employment” Mean?

“Active employment” means you are currently working for your employer, performing the regular duties of your job, and earning wages.

Insurance companies use this term in almost every group disability policy because it determines whether your long-term disability coverage is active at the time you become sick or injured.

In simple terms:
You must be actively working — not laid off, not terminated, and not on unpaid leave — when your disability starts in order to qualify for LTD benefits.

Why Active Employment Matters for LTD Claims

Your insurer may deny or delay your claim if they believe:

• You stopped working before you became disabled
• You were on leave, laid off, or not performing regular duties
• You were working reduced hours or modified duties without their approval
• There is confusion about your last day of active work

For thousands of Canadians each year, disputes about “active employment” become a major roadblock — especially when the insurer tries to claim the disability began after the person stopped working.

How Insurers Use the Active Employment Clause to Deny Claims

Insurance companies often deny long-term disability claims in Canada by arguing:

1. “Your disability began after your last day worked.”

If they can pin your disability onset to a date after you stopped active work, they may say your coverage lapsed.

2. “You weren’t performing the essential duties of your job.”

Modified duties, reduced hours, or performance struggles caused by illness are often used to challenge eligibility.

3. “You were on leave — so you weren’t actively employed.”

This happens commonly to Canadians on:

• Early maternity leave
• Unpaid leave
• Administrative leave
• Medical leave without proper documentation

4. “You were terminated or laid off before the disability started.”

This is one of the most common — and most unfair — denial reasons.

If You Stopped Working Because of Your Health, You’re Likely Still Covered

Insurance companies often pretend that your disability began the day you handed in your resignation, started leave, or were fired. In reality:

➡️ If your medical condition forced you to stop working, the disability legally began while you were still actively employed, even if symptoms escalated afterward.

➡️ Courts in Canada routinely rule in favour of employees in these situations.

➡️ Your employer or insurer can’t erase your coverage simply because your condition pushed you out of work.

This is especially important for invisible disabilities like mental health conditions, chronic pain, fibromyalgia, or fatigue disorders — where symptoms worsen slowly over time.

What If You Were Working While Sick? (Presenteeism and LTD)

Many Canadians try to “push through” their condition for months — or even years — before finally stopping work.

You may still be covered even if you were struggling at work, including:

• Working reduced hours
• Missing shifts
• Taking sick days
• Needing accommodation
• Being unable to complete tasks
• Having performance issues tied to illness

If illness forced you to stop, you were still “actively employed” at the legal onset date of disability.

Does Active Employment Affect LTD After Two Years?

Most LTD policies change the definition of disability at the two-year mark — shifting from “own occupation” to “any occupation.”

This reassessment has nothing to do with active employment.
If you qualify for LTD, the insurer can’t cut off your benefits using the active employment clause after your claim has already been approved.

What If You Were Terminated Before Filing Your LTD Claim?

Being fired does not automatically end your right to long-term disability benefits in Canada.

You may still qualify if:

• Your illness or injury existed before your termination, and
• Medical evidence shows you were struggling while you were actively employed

Insurance companies frequently deny claims after termination — but we overturn these denials every week.

What To Do If Your Claim Is Denied Because of “Active Employment”

Here’s what to do right away:

1. Get your full LTD policy

Look specifically for:

• “Active employment” definition
• “Effective date of coverage”
• “Eligibility”
• “Termination of coverage”
• “Notice and proof of claim”

2. Gather medical documentation

Ask your doctor to clearly confirm:

• When your symptoms began
• When your condition started impacting your ability to work
• That illness, not choice, caused you to stop working

3. Don’t appeal internally

Insurance company appeals almost never work — and they delay real solutions.

4. Speak to a disability lawyer early

We’ve helped thousands of Canadians overturn denials involving active employment clauses.

Speak to a Disability Lawyer About Active Employment and LTD

If your LTD claim was denied, delayed, or challenged because of the active employment clause, we can help.

At Samfiru Tumarkin LLP, our disability lawyers have helped thousands of Canadians secure their long-term disability benefits — even after unfair denials based on technical policy wording.

There are no upfront fees, and you don’t pay unless we win.

📞 Call us at 1-855-821-5900, email help@disabilityrights.ca, or use our online form for a FREE consultation.