• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Blog

Logo 1 Created with Sketch.

  • About
  • Our Lawyers
    • Andrew Wray
    • Juan Echavarria
    • Salman Rana
  • Expertise
    • Employment Law
    • Civil Litigation
    • COVID-19 Resources
  • Blog
  • Contact Us
  • Book a Consultation
Misrepresentations-in-LTD-insurance-Benefits-Wray-Legal

Misrepresentations in LTD Insurance

March 4, 2021 Tags: Long-Term Disability Benefits, LTD Benefits, LTD Insurance Benefits

LTD insurance claim denied due to misrepresentation

Where the insurance provider takes the position that the policy holder misrepresented a fact, or lied, during the application process and there was a subsequent approval of LTD insurance, the insurer will deny benefits. Applicants for insurance coverage have a duty to disclose any material facts requested by the insurer throughout the process to evidence insurability. Where the insurer demonstrates that the policy holder misrepresented a material fact, it will be able to rescind the insurance contract, meaning the policy is voided and no coverage needs to be provided. This is so because the Court will not uphold a policy where the insurer was unable, due to the misrepresentation, to understand the risk undertaken.

A misrepresentation of a material fact is one which would cause a reasonable insurer to either decline coverage or request a higher premium to provide coverage, if the misrepresentation had been known at the time it was underwritten.

The insurer has the onus of proving that the applicant/policy holder misrepresented a material fact. The standard of proof required will depend on the time at which the insurance provider raises the issue. Generally, where the insurer alleges that there was a misrepresentation within the first 2 years of the policy being in effect, the insurance provider only needs to prove that the misrepresentation occurred by error, mistake, or forgetfulness.  However, if more than 2 years have passed, in order to rescind the policy, the insurer must prove that the insured intentionally, or at least recklessly, misrepresented a fact. The latter being a much stricter standard of proof.

Of course, the policy holder’s duty to disclose material facts extends only to facts he or she knows, or at least, should have known. Where the insured is not aware of a fact, even if material to the policy, there can be no misrepresentation. Whether the insured did or did not have knowledge of a material fact which was not disclosed is often the root of contention where the insurance provider wishes to rescind the policy coverage. Generally speaking, the duty to disclose extends to material facts that the applicant knows, or should know, that are actual facts rather than opinions or beliefs. For example, where the applicant suffers from symptoms such as pain and fatigue, it is a fact that the applicant suffers from these symptoms, and therefore he or she must disclose them. However, the applicant is not expected, or required, to self-diagnose or provide any opinion as to the cause of the symptoms, but can also not rely on the belief that he or she is in good health for not disclosing the symptoms. This is so because these are not facts, but only the subjective views of the applicant.

It is important to note that where the insurer establishes that the policy holder misrepresented a material fact, it will be able to rescind the policy, even if the material fact in question is unrelated to the source of the disability claim. For example, where a policy holder makes a claim for LTD benefits due to a physical injury or impairment, and the insurer proves that the policy holder failed to disclose that he or she sought treatment for a mental health condition, the Court may rescind the policy, even though the non-disclosed fact may be unrelated to the injury for which benefits are sought. This will be the case where the Court determines that, had the insurer known of the non-disclosed fact, it would have declined coverage or requested a higher premium. The Court will make this finding based on the objective standard of a reasonable insurer, based on the risk, rather than the specific insurer’s own statements as to whether it would or would not have granted coverage.

Given the high standard imposed by the duty to disclose on insurance applicants, it is important for those seeking LTD benefits to complete applications thoroughly and conduct a detailed review once finalized. This is so because the applicant will be deemed to have read the application and agreed to the truth of its contents.

Where the insurer attempts to rescind the policy due to an allege misrepresentation, the Court will consider the credibility of the parties as to what was and was not disclosed, whether there is a material fact involved, and if so, what a reasonable insurer would do, among other factors. Given the complexity of these inquiries, where coverage is denied on this basis, it is important to consult a lawyer.

As lawyers with extensive expertise in LTD litigation, we often advise our clients regarding their policy agreements, eligibility for benefits, and available remedies. You may contact us at any time with your LTD insurance questions.

Primary Sidebar

Recent Posts

  • Does My Original Contract Still Apply After 15 Years of Employment?
  • Mass Layoffs: Know the Law, Know your Rights
  • Severance pay in Ontario: What if I am fired for cause?
  • Should Companies update their Employment Contracts?
  • Non-competition Agreements Restricted under the Employment Standards Act

Tags

Blog Civil Litigation Constructive Dismissal Covid Employment Law Covid Mental Health Covid Wrongful Termination Employment Employment Contract Employment Law Health and Safety Human Rights Juan Echavarria Just Cause Termination Limitation Period Long-Term Disability Benefits LTD Benefits LTD Insurance Benefits Mechanical Business News Resignation Sale of Business Severance Pay Stock Options Termination Law termination notice Termination rights Total Disability wrongful dismissal

Footer

Contact Us

181 University Avenue, Suite 2200 Toronto, Ontario Canada M5H 3M7

T 416-642-0460
F 416-363-7875

Contact Page LinkedIn
Book a Consultation





    Please note that contact through our website is for informational purpose only and does not create a lawyer-client relationship.

    * Required

    [anr_nocaptcha g-recaptcha-response]

    Reviews

    Clecia Louzado
    Clecia Louzado
    2021-05-10
    Andrew is very professional, knowledgeable, fair and straightforward. I was grateful for his ability to outline all my options clearly and also his professionalism during a difficult time in his personal life. He did not let his personal life affect any time sensitive needs of my case, which didn’t go unnoticed. Highly recommend Andrew!
    Anton Koschany
    Anton Koschany
    2021-02-21
    Andrew Wray provided thorough analysis of my circumstances and provided sound advice. He is personable, knowledgeable and took the stress out of a stressful situation. In my professional career I have had occasion to work with many lawyers and I can easily say that Andrew meets and exceeds the bar (pardon the pun). Anton K.
    Lamrana Bah
    Lamrana Bah
    2021-02-02
    I had a very positive experience with the staff at Wray Legal LLP. Andrew Wray is a very brilliant bilingual lawyer. I was in search of a French Speaking lawyer and I came across him. He is a good listener, very professional with patience and passion for his job. I am grateful I met you. Thanks to you and your staff for your exceptional services 🙂
    Jamie Saunders
    Jamie Saunders
    2021-01-21
    Andrew Wray came highly recommended and now I know why! Andrew took a personal and very supportive approach as he helped to guide me through a long and challenging labour hearing process that had already cost me too many sleepless nights. His demonstrated understanding of the complex legal and procedural issues gave me tremendous confidence. Having never previously testified or given evidence, his advice on what I could expect on the stand was worth its weight in gold. I was kept completely in the loop with regard to strategies and next steps, and was always made to feel like I was steering the ship - with Andrew as my formidable engine. Oh, and by the way, we won the case! 🙂
    Mark Cuff
    Mark Cuff
    2020-12-19
    I am also highly recommending Wray Legal. Andrew represented me in a complicated employment matter - he was extremely responsive, and knowledgable in offering excellent legal advice. Andrew explained/outlined thoroughly what to expect and worked to make sure I was getting the very best outcome. I really liked how very realistic he was about my options and which would be the most beneficial to my specific situation. Wray Legal came highly recommended from friends and I can see why. Excellent experience
    Jennifer Morrison
    Jennifer Morrison
    2020-12-18
    Andrew and his team were there for me at a very difficult time. Andrew is always kind and compassionate, while understanding the job that needs to be done. I was very pleased with the outcome of my case. When it comes to a legal team, you want the best in your corner and Andrew is the best! I would highly recommend calling Andrew to see how his team can get the best settlement for you, I’m glad I did!
    Richard Goodman
    Richard Goodman
    2020-12-18
    Andrew helped me to resolve a complicated legal dispute with a former employer. Andrew was extremely professional is all of his dealings with me and opposing counsel. Andrew treated me as a partner, not just a client. It was an extremely positive experience and outcome, especially considering the difficult nature of the dispute. Thanks for all your help, Andrew!
    Tamara Roitman
    Tamara Roitman
    2020-12-11
    Andrew represented me through a workplace issue during a very low point in my life. From a legal standpoint he was extremely knowledgeable and professional. More than that, however, he was kind, gentle and understanding.  Having a lawyer that not only knew what he was doing, but who is also a good human being who went above and beyond to communicate and offer emotional support was the best possible thing both for the outcome of my case as well as for my mental health. I will always feel grateful to Andrew and his firm.
    © 2023 Wray Legal