Can my Long Term Disability Insurer force me to apply for Canada Pension Plan Disability Benefits?
Can a LTD Insurer force a clamant to apply for CPP-D benefits? The answer to that question isn’t very straightforward. So today we are going to run through a few different scenarios to better illustrate the answer!
Example A: My LTD Insurer has approved my application and I am receiving benefits
Yes! Apply for CPP-D, even if the contract doesn’t explicitly require you to do so. Why? Because if you do not, the claims handler is much more likely to terminate your benefits. If approved for CPP-D, your insurer is less likely to cut benefits with its risk reduced.
Example B: My LTD Insurer has denied my application for benefits
If your LTD insurer is not paying you benefits, then they cannot force you to do anything as the contract has no application. But you should do so anyway. It currently takes about 6 months to process the application. Should you have to undergo one or more appeals, you could wait over a year for benefits. When disabled and unable to work, there is no reason to hold off in applying for CPP-D benefits. Remember that if you get better, or want to re-enter the workforce, Service Canada will gladly work with you in an open and fair manner.
Example C: I’m suing my LTD Insurer and they are asking me to apply
In some cases, the LTD insurer may ask you to apply for CPP-D even within active litigation against you. You should apply regardless for three important reasons: (1) you have a duty to mitigate the harm that the LTD insurer is causing you. This includes applying for other benefits that you may be entitled to; (2) the definition for disability for CPP-D benefits is more onerous than most group and individual policies. If you succeed in obtaining CPP-D benefits, it strengthens your civil claim against the LTD Insurer; (3) Because CPP-D benefits are almost always offset against the LTD Insurer’s monthly benefit, it makes it much easier to resolve the litigation once CPP-D benefits are secured. It is common for LTD litigation to settle a few weeks after the CPP-D application has been resolved.
There are many LTD lawyers who will draft a client’s CPP-D application for a very reasonable fee that is only payable once you are approved. Preparing an application for CPP-D benefits is a skill, and your chances of success increase dramatically if you have an experienced lawyer on your side.