disability – Page 2 – OLHI – Free, impartial help with your life & health insurance complaints

A key disclosure form (life)

Posted on: February 2, 2016

Mr. M. had a $25,000 term life insurance policy. As the premium rates were about to increase dramatically and affordability was an issue, his insurance agent, who had originally sold him the policy, offered to research more affordable options.

This search proved a challenge. Mr. M. had health issues and, given the risks, few insurers would offer alternative coverage on a single life basis – at least, none that the consumer found affordable. At the end of the exercise, the agent proposed a joint last-to-die policy and wrote up an application for Mr. M. and his common-law partner, Ms. L.

The new policy was delivered and Mr. M. cancelled the previous one. He paid the premiums for just over two years before passing away. Ms. L. made a claim in order to pay final expenses and was surprised to have the claim denied because it was a joint-last-to-die policy. In such a policy, no proceeds are paid out until the death of the second spouse.

Ms. L. followed the insurer’s complaint process, where the insurer upheld its decision to deny the claim. She then brought her complaint to OLHI.

The Dispute Resolution Officer (“DRO”) reviewed the consumers’ documents and found anomalies in the application. The consumers’ statements in the application clearly indicated their intent to use the coverage for final expenses upon Mr. M.’s death and they designated Ms. L. and their daughter as beneficiaries – requirements that could not be met under a joint-last-to-die policy. The DRO recommended that the complaint be escalated to an OmbudService Officer (“OSO”) for further investigation.

The OSO reviewed both the file documents and the analysis from the DRO, and concurred that there were discrepancies in the sales process. He noted a lengthy delay in issuing of the policy and that there was no copy of a Life Insurance Replacement Disclosure form in the file. This disclosure form is required to be provided whenever a consumer replaces one life insurance policy with another. It provides a side-by-side comparison between the old and the new policies and serves to demonstrate that consumers understand the differences between the two policies.

Since recollections from the consumers and the agent differed, this missing form proved to be the crux of the issue.

In his detailed submission to the insurer, the OSO suggested that the lack of a properly completed replacement declaration form deprived Ms. L. and Mr. M. of the full and plain disclosure they were entitled to, and that their decision to purchase the new policy and cancel the previous one was not a fully informed one.

The OSO recommended that the insurer compensate the consumer for the loss of the $25,000 coverage provided by the original policy.

The insurer agreed to do so and the proposed payment was issued to the consumer.

Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.

Arriving at a compromise (creditor)

Posted on: February 2, 2016

Mr. S. contacted OLHI seeking help with the approval of his disability benefits. The OLHI Dispute Resolution Officer (DRO) who took his call learned that he had purchased a vehicle some years before and financed the purchase with a loan. At that time, he signed up for group creditor insurance that would pay his monthly car loan payments in the event he became totally disabled. Thereafter, Mr. S. was diagnosed with a terminal condition. He applied for the disability benefits but his claim was denied on the basis that it was out of time.

Our DRO was able to determine during the call that Mr. S. had not received the insurer’s final position letter. He advised Mr. S. that he would need to complete his insurer’s internal complaints process before OLHI could review the complaint. Mr. S. was provided with the contact information for the insurer’s Ombudsman.

About a month later, Mr. S. called back upon receipt of his insurer’s final position letter. The DRO explained that OLHI would open a complaint file once Mr. S. signed and submitted OLHI’s Authorization Form and other relevant documents. Thereafter, OLHI would request documents from the insurer and both he and the insurer would be notified in writing that the complaint was under OLHI’s review.

Upon receipt of the documents from both parties, it appeared to our DRO that Mr. S. might have a reasonable case. She recommended that the complaint be transferred to an OmbudService Officer (OSO) for further investigation.

The OSO reviewed the sequence of events. Mr. S. last worked in October, 2010. In 2009, he had bought a new car and, through the dealership, purchased creditor life and disability insurance with a single premium that was spread over his monthly car payments. Following his disability diagnosis in the fall of 2010, he applied and was approved for CPP disability in June 2011. Mr. S. was under the mistaken impression that he had to apply for the CPP disability benefit before applying for any other benefits. His anxiety over his disability diagnosis and the consequent need for him to focus on daily living activities had caused him to lose track of the fact that he had creditor disability coverage.

Mr. S. filed his claim in August 2011. The insurance policy required him to provide his insurer with notice of the events giving rise to the disability within 30 days and to provide medical evidence establishing his claim within 90 days of onset of disability. As a result, the insurer’s final position letter denied his claim on the basis that it was filed too late.

The OSO spoke to Mr. S. and explained the reasons why the insurer was within its rights to rely on the time limitations set out in the policy. However, he suggested that it might be possible to obtain a settlement whereby the loan payments would be covered from the date the insurer was provided with notice of the claim. Mr. S. readily agreed that this would be an acceptable resolution of his complaint.

The OSO subsequently made a detailed written submission to the insurer, suggesting it pay the benefits from August 2011 onwards. The basis for this suggestion was that the disability was clearly established and the insurer was not prejudiced if the claim was admitted on a “go forward” basis.

The insurer responded in short order, agreeing to allow the claim from the date it received notice. This resulted in Mr. S. receiving a reimbursement for the payments made by him while he disputed the claim with his insurer and during OLHI’s complaint process. The insurer also paid the loan instalment payments from that point forward.

Jogging some memories (life)

Posted on: February 2, 2016

Mr. T. contacted OLHI to seek assistance with reinstatement of his retirement group life insurance benefit. The Dispute Resolution Officer who took the call learned that this benefit had been allowed some years ago as part of an early retirement package negotiated with his employer. The employer was a life and health insurer, and OLHI Member Company.

OLHI learned that all had proceeded smoothly for several years until Mr. T.’s former employer sent him a letter which he did not receive because it was mailed to an out-dated postal address. This letter contained a notice advising the consumer that a medical certification of total disability was required to maintain his life insurance benefit. That letter was followed by another from his former employer, a month later, advising that his life insurance benefit had been cancelled for lack of the required medical certificate. This second letter was sent to Mr. T.’s current address.

OLHI was told that Mr. T. had immediately called his former employer to address the situation, at which point he learned that the letters had been sent to different addresses because separate databases had been used to locate his contact information. As it turns out, the database used to send the first notification letter had not been appropriately updated. Upon learning of this administrative glitch, Mr. T. sought written confirmation that his life insurance benefit would continue as part of his retirement package. Much to his dismay, several months later, the company confirmed that it would not continue the benefit on the basis that there was no commitment to do so.

Fortunately, Mr. T.’s former employer elected to treat the situation as an insurance matter, rather than an employment issue. As a result, it provided Mr. T. with a “final position letter,” inviting him to contact OLHI if he was dissatisfied. As is customary, the insurer’s final position letter provided OLHI’s contact details and a brief explanation of OLHI’s independent role in assisting life and health insurers and consumers to resolve their differences.

Following the conversation with Mr. T. and a review of the insurer’s final position letter, it was decided that the facts of the case warranted further investigation by an OLHI OmbudService Officer (OSO). The OSO reviewed the information collected to date and then spoke at length with the consumer. He ascertained that the agreement to provide Mr. T. with early group retirement benefits had indeed been made some years ago and that it was an oral commitment made with his employment superiors of the day. The consumer was very concerned because he now believed himself to be uninsurable and because some of the subscribers to the original agreement were no longer with the company.

Subsequently, the OSO prepared a written submission to the consumer’s employer, setting out the facts and issues as he understood them. He suggested that, although there was no written confirmation on the part of the company to provide Mr. T. with retirement group benefits, the fact that coverage had been provided for many years was evidence of that commitment. It was suggested that the commitment could not be voided by a notification error for which the consumer was not responsible.

In due course, the consumer’s employer replied, advising that it had reconsidered its original position and had arranged with the employer’s group benefits insurer to reinstate the consumer’s group life insurance benefit. As before, the life insurance benefit was subject to ongoing medical certification of total disability.

The employer thanked OLHI for bringing the issue of conflicting address databases to its attention and confirmed that it had undertaken an internal review of its employee address records. This review resulted in the company changing its policy on record keeping practices for employee addresses so that problems of this nature would not occur in the future with Mr. T. and other current or former employees.

Taking a good hard look at the evidence (disability)

Posted on: February 2, 2016

Ms. A. wrote to OLHI seeking assistance after she had unsuccessfully appealed her insurer’s decision to discontinue her disability benefits. Her group disability plan provided payments for a period of 24 months upon inability to perform her own occupation. In order to qualify for benefits after that period, she was required to provide evidence of inability to perform any occupation for which she was reasonably suited by education, training or experience.

This matter was directed to an OLHI Dispute Resolution Officer (DRO) experienced in disability claims. He followed up with Ms. A. and learned that she was a physiotherapy assistant, a highly physical job. Several years before, she had sustained a leg fracture requiring surgery. She had submitted a claim for disability payments under her group disability program and was granted benefits. He also learned that Ms. A. had cooperated with the insurer’s efforts to get her back to work by actively participating in a prescribed rehabilitation plan and by undergoing a functional capacities evaluation (FCE) to determine her capacity to work. Following the FCE, Ms. A. received a letter from her insurer advising that her benefits would terminate in six months’ time, upon conclusion of the “own occupation” period. Ms. A. appealed her insurer’s decision to terminate benefits on several occasions without success.

Following their conversation, our DRO reviewed the documentation that he had requested from her. This included correspondence with her insurer, medical reports, the FCE, and materials she had submitted to CPP in support of a claim for disability benefits. He noted that although the insurer had concluded from the FCE that Ms. A. could do “sedentary work”, the report itself indicated only “perceived ability at sedentary, tolerated light capacities.” No Transferable Skills Analysis (TSA) had been undertaken by the insurer to support a conclusion that Ms. A. had the skills and capacity to transition to a sedentary occupation, such as secretarial or receptionist duties.

He also observed that the insurer, in making its decision to end benefits, appeared to give significant weight to the fact that during the initial benefit period, Ms. A. had excelled in a six week training course in medical terminology and had also responded to job advertisements in which she might apply these skills. In addition, it was noted that there was clear and credible evidence of deterioration in her medical condition in the two years following the termination of her benefits.

All of these factors were instrumental in our DRO concluding that there were grounds to refer this complaint to an OLHI OmbudService Officer (OSO) for a more thorough review.

The OSO reviewed the file, spoke at length with Ms. A., and determined that the next step should be a review of the insurer’s claim file. In accordance with OLHI’s procedures, the insurer readily produced this file upon request.

Upon reviewing the insurer’s file, it appeared that the denial of Ms. A.’s disability claim was based on an apparently successful vocational rehabilitation program and the FCE performed 18 months into her 24-month initial claim period.

On the other hand, the insured’s physical and mental condition had been deteriorating and she had clearly struggled to complete her rehabilitation program to prevent loss of her benefits. Also noted were conflicting views in the insurer’s own file as to the likelihood of her ability to function in any kind of work setting. Moreover, while Ms. A.’s original application for CPP disability benefits had been initially denied, her claim was subsequently approved.

Upon conclusion of his review, the OSO made a detailed written submission to the insurer with a recommendation that the insurer review its decision.

In due course, the insurer responded with an offer to have Ms. A. submit to an independent medical examination. This examination determined that she was, indeed, unable to function in any occupation for which she might be reasonably suited by education, training, or experience.

The insurer accepted the independent medical examiner’s assessment and promptly agreed to allow benefits on a continuing basis, subject to an appropriate adjustment with respect to the CPP benefits already received.

Clearing away the doubts (disability)

Posted on: February 2, 2016

Ms. F. called OLHI on behalf of a member of her family, Mr. L., to seek assistance with reinstatement of disability benefits that had been discontinued under his group policy. Mr. L. could not act for himself due to his state of disability. The OLHI Dispute Resolution Officer (DRO) learned that short-term disability benefits had been paid for a period of six months. Long term disability benefits were paid, on a trial basis, for a year and were then discontinued following an independent medical examination conducted on behalf of the insurer.

In sum, based on the medical examination, the insurer suspected that the insured was feigning his disability. The insurer also queried whether Mr. L. met the condition of “total disability” as per his insurance contract. Ms. F. called OLHI seeking assistance with the reinstatement of benefits. The complaint was initially reviewed by a DRO and was then referred to an OmbudService Officer (OSO) for a more detailed examination.

As is usual, Mr. L.’s group disability plan provided benefits for a period of 24 months if a claimant can demonstrate disability from his or her own pre-disability occupation. In order to qualify for benefits after that period, the claimant must provide evidence to support his or her inability to perform any occupation for which he is reasonably suited by education, training or experience.

OLHI’s OSO reviewed the extracted documents from the claims file previously provided to Ms. F. by the insurer. He then spoke at length with her to ascertain the chronology of events and the extent of her involvement to date. Taking into account the information already available, he determined that this case would best be served by a review of the insurer’s claim file. The insurer readily agreed and cooperatively provided the complete claim file.

A review of the insurer’s claim file and the additional information provided by the insured’s representative disclosed that Mr. L. had subsequently left his minimum wage-type work in the hospitality industry in order to be closer to his family. The file also revealed a history of progressively worsening mental health, culminating in Mr. L.’s hospitalization by the time of the OSO’s review.

The OSO appreciated the reasons for the insurer’s concerns about proof of disability, which were based on anecdotal evidence that suggested Mr. L. was physically active and had made some efforts to find a job. However, our Officer’s review of the claim history led him to conclude that the insured was indeed suffering from a serious deteriorating mental disability. This disability had not been clearly diagnosed at the time of the insurer’s decision to terminate benefits but had been conclusively diagnosed by the time OLHI’s Officer was reviewing the case.

Upon conclusion of his review, the OSO made a detailed written submission to the insurer. He acknowledged the insurer’s concerns and the fact that this was a challenging and complex claim. However, his view was that the evidence did not support a conclusion of feigning on the part of the insured. He suggested that the totality of the subsequent circumstances, which indicated a progressive deterioration in mental health, also be taken into account.

Upon receipt of our Officer’s analysis, the insurer referred the case back to its business unit for further consideration. In due course, the insurance company offered Mr. L. a lump sum settlement or reinstatement of the claim back to a point in time where the insurer accepted that Mr. L. was unquestionably totally disabled from any occupation. This offer was considered fair by OLHI’s OSO and the reinstatement of claim option was eventually accepted.

Re-opening the lines of communication (disability)

Posted on: February 2, 2016

Ms. M. called OLHI to seek assistance with reinstatement of her disability benefits. Initial discussions with one of our Dispute Resolution Officers revealed that she had received long-term disability benefits for a period of well over two years. Payments were stopped on the basis that she was not cooperating with the rehabilitation program arranged by her insurance company, as evidenced by several missed treatment sessions. There was also an underlying suspicion by the insurance company that Ms. M. may have been “malingering.” Accordingly, the complaint was referred to one of our OmbudService Officers (OSO) for a more detailed examination.

As is the norm, Ms. M.’s group disability plan provided benefits for a 24-month period upon satisfactory proof that she was unable to perform the duties of her own pre-disability occupation. To qualify for benefits after that period, she was required to provide satisfactory evidence that she was unable to perform any occupation for which she was “reasonably suited” by education, training or experience.

The OSO assigned to the case noted that the insurer had continued to accept Ms. M.’s disability beyond the initial 24-month period but had apparently become concerned about the potential duration of the claim due to Ms. M.’s relatively young age. As a result, Ms. M.’s insurer prescribed a rehabilitation program with a view to assessing her ability to return to the work force.

Our Officer spoke at length with the insured and determined that this case would best be served by his independent review of the insurer’s claim file. The insurer readily agreed.

Through the course of his investigation and analysis, our OSO noted that there were conflicting issues and points of view. The insurer’s concern about the claim was perfectly understandable. To its’ credit, the insurance company had continued the claim well beyond the 24-month initial period and had decided to invest in Ms. M.’s rehabilitation. On the other hand, our Officer’s review suggested that the design of the insurer’s rehabilitation program may have been ill suited to Ms. M.’s disability.

He was also concerned about the insurer’s deeply engrained suspicion of malingering, which did not seem to be firmly grounded in the facts. Specifically, a conclusion of malingering was not supported by the observations of the attending physician nor by Ms. M.’s willing participation in various other alternative treatments designed to alleviate her disability.

Upon conclusion of his review, the OSO prepared a detailed written submission to the insurer. He acknowledged the insurer’s support of the claim and decision to invest in Ms. M.’s rehabilitation. On the other hand, he pointed out that Ms. M.’s disability under the policy was not in dispute and that her inability to consistently attend all rehabilitation sessions was likely explained by the unsuitability of the rehabilitation program, rather than a lack of desire to “cooperate” with a suitable program.

With the benefit of having reviewed this complaint from an independent perspective, the Officer also suggested that the insurer’s suspicion of malingering was not supported by the facts.

The insurance company agreed to consider our OSO’s perspective and quickly responded with an offer that resolved the complaint to the satisfaction of both parties. In sum, the insurer agreed to reinstate Ms. M.’s claim retroactively on the understanding that she would follow a new rehabilitation program suitable for her medical condition, developed in consultation with her attending physician. Both parties were satisfied with the result and we understand that Ms. M. is now successfully following her new rehabilitation program.

Who’s on first? (creditor)

Posted on: February 2, 2016

When Mr. G. purchased a trailer, he enrolled in the group creditor insurance plan offered by the dealership. His paperwork confirmed he had requested both life and disability insurance in connection with the financing on his trailer.

He subsequently became disabled and contacted the dealership about submitting a disability claim to cover his loan payments while he was unable to work. It was then that he learned the loan on his trailer carried life insurance only, despite the paperwork he had in his possession.

Mr. G. confronted the dealership representative about the problem with his coverage. The representative admitted responsibility and confirmed he had made a mistake. At one point, the dealer even offered to pay the disability premium on Mr. G.’s behalf but subsequently reneged on the offer.

By the time he called OLHI, Mr. G. had made numerous attempts to resolve the problem on his own, to no avail. He was very frustrated, particularly because it was not clear with whom he should be dealing. Should he pursue his complaint with the dealership, the insurer’s third party administrator, or the insurance company itself? On the surface, it appeared that he had been disadvantaged as a result of the actions of the dealership, not the insurer nor its administrator. However, additional fact finding would be required to determine the best course of action to resolve the situation.

As a first step, an OLHI Dispute Resolution Officer (DRO) called the third party administrator, whose role it is to administer the insurance plan on behalf of the insurer. It was confirmed that only a life insurance certificate had been issued for Mr. G. and that he had no disability coverage in place. At this point, our DRO became concerned that even if Mr. G. or the dealership would agree to pay the premium for the disability insurance, the insurer would not agree to entertain Mr. G.’s disability claim. Accordingly, our DRO wrote to the insurer’s Ombuds Officer, apprising him of the situation and enquiring whether the insurer would consider Mr. G.’s disability claim if it received payment of the premium.

The insurer’s representative advised OLHI that it was conducting an investigation into the matter. They had already spoken with the dealership and were in the process of contacting Mr. G. to obtain his side of the story. Our DRO subsequently followed up and inquired, once again, if the insurer would accept responsibility for the claim if its’ investigation showed that the dealership was at fault and the premium was subsequently paid. She was advised that the insurer’s Ombuds would confer with senior management.

Eventually, a settlement was reached whereby the dealership agreed to pay half of the disability premium, Mr. G. agreed to pay the other half and the insurer agreed it would consider the disability claim upon receipt of the full premium.

Mr. G. expressed his gratitude for OLHI’s assistance in concluding a settlement that ensured his disability claim would be considered, thus satisfying his original expectation that he was insured in the event of disability.

Was he ready to return to work? (disability)

Posted on: February 1, 2016

Mr. G. went on a medical leave from work for a year, due to a mood disorder that included depression. During this time, through his group insurance plan, his employer covered his disability benefits. But after a year, the insurer terminated benefits upon receiving information from Mr. G.’s doctor that he was planning on returning to work. He did not, though, as his psychiatrist stated that he was unable to. The insurer completed a medical investigation and, in its final position letter, wrote that Mr. G. was not completely disabled and could return to work.

Mr. G. contacted a Dispute Resolution Officer (DRO) at OLHI. The DRO discovered that while Mr. G’s doctor had recommended he return to work, his psychiatrist did not support the finding and felt that Mr. G. was still suffering from a severe disorder. For this reason, the DRO recommended the complaint be escalated to an OmbudService Officer (OSO) for investigation.

As a part of his review, the OSO spoke with the consumer as well as the insurer and went through all the documents that both parties shared with him. The medical reports revealed that even after his disability payments stopped, his psychiatrist continued to treat Mr. G. for his illness. The OSO also discovered a crucial detail: that the insurer’s decision to stop disability payments was based on a conversation with Mr. G.’s psychiatrist, where he said Mr. G. had quit his job. However, the transcript of this telephone conversation did not match formal reports. Mr. G. explained to the OSO that his psychiatrist may have confused the fact that he quit another job many years earlier.

The OSO reached out to the insurer, requesting they confirm with the employer whether Mr. G. had in fact quit or was still employed and on leave. The employer was able to confirm that he had not quit his job. After some further discussion, the insurer agreed to reconsider and made a settlement offer. Mr. G. was thrilled to reach a settlement and was also very appreciative of the way the OSO was able to explain his case in plain language to him so that he could better understand how the insurer reached their initial decision.

Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.