Navigating a long-term disability claim in Ontario is stressful enough. If your benefits have suddenly been denied, you are not alone — and you are not out of options.
Insurance companies deny valid claims every single day. In many cases, the issue is not whether you are actually disabled, but how your claim was assessed, presented, or interpreted by the insurer. A denial letter can be incredibly stressful and financially overwhelming, especially when you are unable to work, but a denial does not mean you are defeated.
What matters most is what you do next. Taking the wrong step can delay your recovery or severely weaken your legal position.
What to Do Immediately After Your LTD Claim Is Denied
If your benefits have been denied or suddenly cut off, you need to protect yourself immediately. Take the following steps to secure your position:
- Read the denial letter carefully: Identify the exact reasons the insurer is citing for denying or terminating your benefits.
- Do NOT accept the insurer’s decision as final: Insurance companies are businesses focused on their bottom line, not neutral decision-makers.
- Request your complete file: Ask the insurer for a full copy of your claim file and your specific policy or benefits booklet.
- Gather updated medical evidence: Work with your treating doctors to secure updated reports that focus heavily on your specific limitations and inability to perform your job duties, not just your diagnosis.
- Track your deadlines: Ontario law imposes strict limitation periods on how long you have to file a legal claim.
The Trap of Internal Appeals
Your denial letter will almost certainly offer you the chance to file an “internal appeal” with the insurance company. While this sounds like a logical next step, internal appeals are often a trap.
You do NOT have to appeal internally first before taking legal action in Ontario. In many situations, an internal appeal is simply an opportunity for the insurance company to review its own homework. This process rarely results in a reversed decision. Instead, it frequently achieves two things that benefit the insurer:
- It forces you to wait months without income.
- It runs down the clock on your two-year legal limitation period.
Rather than wasting time in the insurer’s internal maze, your strongest option is often to start a formal legal claim to recover your unpaid benefits.
Why Long-Term Disability Claims Are Denied in Ontario
While every case is unique, insurance companies typically rely on a few common arguments to deny or terminate LTD claims in Ontario:
1. You Don’t Meet the Definition of “Totally Disabled”
Insurers frequently argue that you do not meet the strict policy definition of disability. However, under Ontario law, being “totally disabled” does not mean you must be completely helpless or unable to function. It simply means your condition prevents you from performing the essential duties of your occupation.
2. The Shift from “Own Occupation” to “Any Occupation”
After you have received benefits for two years, most LTD policies change their definition of disability.
- Own Occupation (First 2 years): Can you perform your specific job?
- Any Occupation (After 2 years): Can you perform any job for which you are reasonably suited by education, training, or experience?
Insurers routinely cut off claimants at the two-year mark, arguing that even if you can’t do your old job, you could do something else.
3. “Insufficient” Medical Evidence
Even when your own treating physician fully supports your inability to work, insurers may claim your file lacks “objective” medical evidence, that your limitations are too vague, or that your condition simply isn’t severe enough.
4. Conflicting Independent Medical Exams (IMEs)
Insurance companies often send claimants to their own hired doctors for an “Independent” Medical Exam. Unsurprisingly, these reviewers frequently disagree with your treating doctor and conclude that you are capable of returning to work.
Suing for Bad Faith in Ontario: Your Legal Rights
If your long-term disability benefits were wrongfully denied or improperly terminated, you have the right to sue your insurance company for your unpaid benefits, future benefits, and in some cases, additional legal damages.
The Duty of Good Faith
Under the Ontario Insurance Act and common law, insurance companies owe you a Duty of Good Faith. This means they are legally required to handle your claim fairly, honestly, and promptly. They must assess your claim with proper regard for your interests, not just their own. When an insurer unreasonably denies benefits, delays payment, or fails to properly investigate your medical evidence, they may be acting in “bad faith.”
Aggravated and Punitive Damages
Ontario courts take the wrongful denial of peace-of-mind contracts like LTD policies very seriously. If an insurer acts in bad faith, you may be entitled to:
- Aggravated Damages (Mental Distress): As established in landmark Supreme Court of Canada cases like F. v. Sun Life Assurance Company of Canada, compensation may be awarded if the insurer’s wrongful denial caused you severe, compensable mental distress beyond your financial losses.
- Punitive Damages: If the insurance company’s conduct was malicious, oppressive, or represented a marked departure from standard industry practices (as seen in cases like W. v. Pilot Insurance Co.), Ontario courts can award punitive damages to punish the insurer.
Why Choose Samfiru Tumarkin LLP?
When you are fighting a massive insurance company, you need a firm that actually tilts the playing field in your favour.
We only represent employees and claimants — never the insurance companies. At Samfiru Tumarkin LLP, our disability lawyers have extensive experience navigating the Ontario court system, aggressively challenging denied, delayed, and terminated LTD benefits. We know the tactics insurers use to exhaust claimants, and we know exactly how to counter them under Ontario law.
If you are outside of the province and need a broader overview of how claims are handled across the country, read our comprehensive guide on National Long-Term Disability Denials.
Do Not Wait to Get Legal Advice
In Ontario, you generally have exactly two years from the date of your denial to file a legal claim against your insurance company. If you miss this limitation period, you may lose your right to claim your benefits forever.