There are various reasons for which insurance providers may deny LTD benefits to a policy holder even though he or she has become unable to work due to a medical condition. These reasons may be found in the policy in the form of exclusion clauses or in the common law, that is, the Courts’ interpretation with regards to policy holders’ obligations to be eligible for LTD benefits. The insured’s obligation to seek and follow medical treatment may fall under both categories.
It is common for policies to include provisions that require the policy holder to receive ongoing care and treatment that is appropriate for the specific disabling condition. Similarly, policies often indicate that where the insured fails to receive such treatment or provide evidence that he or she is undergoing treatment, they will not be eligible to receive benefits for the period of time for which treatment was not provided or benefits may be terminated. These provisions work to impose an ongoing obligation on the policy holder to prove that he or she is unable to work due to a medical condition.
At common law, the obligation to receive treatment comes from the insured’s duty to mitigate. Generally speaking, the duty to mitigate requires a party to take reasonable steps to reduce his or her loses, as this would allow the Court to determine actual loses, without accounting for those that could, and should have been avoided. In the LTD context, the Courts have found that a policy holder may fail to mitigate his or her damages where they have failed to follow medical advice or refused treatment. Where the Court finds that a policy holder has failed to mitigate damages in this way, it may reduce any amounts recovered by the insured by what it considers could have been reasonably avoided. For example, where the Court finds that treatment was available, that could have reasonably allowed the policy holder to return to work after a certain period of time, but was refused, the Court may decide that the insured is only eligible for LTD benefits until the date in which they could have reasonably returned to work, had treatment not been refused. In the context of a trial, this would result in the Court reducing the damages award granted to the policy holder.
Whether the insured has fulfilled their obligations pursuant to the policy or their duty to mitigate can be difficult to determine. Insurance policies often include language requiring the policy holder to submit “appropriate medical evidence” or seek “appropriate treatment”. However, what is “appropriate” for each circumstance cannot generally be outlined, often resulting in a disagreement between the insurance provider and the policy holder as to whether the “appropriate” steps have been taken or as to the effectiveness of treatment, leading to a denial or discontinuation of benefits.
Policy holders often find that LTD benefits are denied or suspended due to an alleged failure to seek or follow medical treatment, even where they have made efforts to follow the advice of their treating physician. As lawyers with expertise in LTD litigation, we often advise our clients with regards to their rights and obligations under their respective policies and the common law. You may contact us if you require assistance.
