While your disability benefits insurance companies are to pay your short-term and long-term disability benefits until you cease to be disabled, your policy contains the definition of disability and duration of your benefits. Here are examples of how the policy of disability benefits insurer is laid out:
- CIGNA Life Insurance Company of Canada (from Moore v. Haw, 1997 CanLII 12295 (ON SC))
DISABILITY
An insured employee in Class II or III will be considered Disabled if because of Injury or Sickness:
He is unable to perform all of the material duties of his regular occupation; and after Monthly Benefits have been payable for 24 months, he is unable to perform all the material duties of any occupation for which he is or may reasonably become qualified based on his education, training or experience.
Proof of Disability
Written proof of disability must be given to the Insurance Company within 90 days after the date of the disability for which claim is made. If written proof of disability is not given in that time, the claim will not be invalidated or reduced if it is shown that written proof of disability was given as was reasonably possible. Upon request, written proof of continued Disability and of regular attendance of a physician must be given to the Insurance Company within 30 days of such request.
RESIDUAL DISABILITY
An Insured Employee will be considered Residually Disabled if, while he is Disabled, he returns to any work for wage or profit.
RESIDUAL DISABILITY BENEFIT
The Monthly Benefit for any month during which the Insured Employee is Residually Disabled will be:
(1) The Monthly Benefit as figured above for the first 12 months Residual Disability Benefits are payable; and
(2) The Monthly Benefit as figured above minus 50% of the Employee’s monthly earnings received while he is Residually Disabled after the first 12 months Residual Disability Benefits are payable.
DURATION OF BENEFITS
The Insurance Company will stop paying Monthly Benefits on the earlier of the following dates:
(1) The date the Insured Employee ceases to be Disabled;
(2) The date the insured Employee reaches age 65.
2. London Life Insurance Company (from London Life Insurance Company v. Forget (Gen. Div.), 1991 CanLII 7213 (ON SC))
Short Term Disability Insurance
(1) Benefit
If an insured person becomes totally disabled and is continuously so disabled for the waiting period shown on the data page, London Life will pay the short term disability benefit for which the person was insured at the commencement of total disability. Payment will accrue from and be paid on the dates shown on the data page and will continue during the continuance of total disability but not longer than the period shown on the data page.
(2) Total Disability
A person will be totally disabled if unable, because of injury or disease, to perform substantially all of the duties of his occupation.
(3) Reduction of Benefit
The short-term disability benefit will be reduced by:
(1) an amount so that the benefit hereunder will not exceed:
(a) if the payment is taxable, 80 percent, or
(b)if the payment is not taxable, 70% of the average weekly earnings of the person during the three months immediately before the commencement of total disability; and
(2) any income replacement benefit to which the disabled person is entitled under any provincial automobile insurance plan which is the primary payor.
Long Term Disability Insurance
(1) Benefit
If an insured person becomes totally disabled and is continuously so disabled for the waiting period shown on the data page, London Life will pay the monthly benefit for which the person was insured at the commencement of total disability. Payment will accrue from the end of the waiting period and will be payable monthly thereafter during the continuance of total disability but not beyond the death of an insured person or his 65th birthday. The long term disability premium for an insured person will be waived while he is receiving such benefits.
(2) Total Disability
An insured person will be totally disabled if
- during the waiting period and the next 24 months he is unable, because of injury or disease, to perform substantially all of the duties of his occupation and
- thereafter, is unable, because of injury or disease, to do any work for which he is or becomes reasonably qualified by education, training or experience.
(3) Reduction of Benefit
The monthly long term disability benefit will be reduced by
- any amount of income for the month to which the insured person is entitled under any Workers’ Compensation or similar coverage;
- any amount payable for the month on account of the disability of the insured person under the Canada Pension Plan or a similar provincial plan excluding any benefit that the insured person is entitled to receive for children; and
- an amount so that the benefit hereunder together with all other benefits for the month payable on account of the disability of the insured person under any other sick leave plan, association or group insurance plan, employee retirement plan, or government plan will not exceed:
(a) if the payment is taxable, 85 percent of monthly basic earnings, or
(b) if the payment is not taxable, 85 percent of monthly basic earnings less income tax and pension plan deductions.
3. Manulife Financial (“Manulife”) (from Hutton v. The Manufacturers Life Insurance Company, 2019 ONSC 279)
The definition of total disability under the terms of the Manulife policy required the following:
-Restriction or lack of ability due to an illness or injury which prevents an employee from performing the essential duties of:
(a) his own occupation, during the 2 years immediately following the date of disability; and
(b) any occupation for which the employee is qualified, or may reasonably become qualified, by training, education or experience, after the 2 years specified in Part a) of this provision.
