Your insurer denied your long-term disability claim. You're not alone — and you may not have to accept it

Whether you have been denied outright or had your benefits abruptly cut off, understanding why denials happen — and where your legal leverage actually lies — can make a material difference to your financial stability. Here is what you need to know.

Why insurers deny valid disability claims

Most denials are not decisions that your condition is fabricated or insignificant. They are driven by policy interpretation, missing paperwork and the absence of what insurers call “objective” medical evidence.The most common denial reasons include:

• Insufficient medical documentation: A diagnosis alone is rarely enough; insurers want functional assessments, treatment records and physician notes that quantify how your condition limits your ability to work
• Missed filing deadlines: Most LTD policies require you to apply within 90 days of the end of your elimination period; late applications can be denied regardless of medical merit
• Policy language disputes: Insurers interpret terms like “totally disabled” or “unable to perform the essential duties of your own occupation” narrowly and in ways that frequently disadvantage claimants
• Surveillance and inconsistency: Insurers may monitor social media or hire investigators; any apparent gap between stated limitations and observed activity can result in denial or termination
• Independent Medical Examination (IME) findings: An insurer-appointed doctor may reach a different conclusion than your own physician; their report often carries significant weight in the insurer’s decision

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The 24-month trap: When the definition changes

Even Canadians whose claims are initially approved can find themselves cut off two years into receiving benefits. This is because most LTD policies contain what is known as a “change of definition” clause.

In the first two years, the standard is typically whether you are unable to perform the essential duties of your own occupation. After 24 months, it shifts: You must now prove you cannot perform the duties of any occupation for which you are reasonably suited by education, training or experience.

This is a deliberately higher bar. A person living with severe depression who previously worked as a nurse may be told they can perform some form of sedentary clerical work — and lose their benefits on that basis, even if their condition has not improved.

The result is that for some people, terminations may happen at the two-year mark, not because of genuine recovery but because of a policy shift that claimants were never clearly warned about.

Mental health claims face the highest barrier

Mental illness now accounts for nearly 40% of all LTD claims in Canada, according to Sun Life’s 2025 group benefits report. Yet mental health conditions are among the most frequently denied.

The core problem is evidentiary: Insurers demand what they describe as objective medical evidence — physical test results, imaging, lab work. Depression, anxiety, post-traumatic stress disorder (PTSD) and burnout do not typically generate that kind of documentation. A psychiatrist’s detailed clinical notes carry weight, but they do not have the same institutional standing as an MRI.

Claimants with mental health conditions often find they must work harder to build their file — consistent treatment records spanning months or years, functional impact assessments from multiple providers and clear written documentation of how their condition prevents them from working.

What not to do after a denial

The instinct after receiving a denial is to comply with the insurer’s internal appeal process. It may be advisable to resist that instinct — at least until you understand what you are agreeing to.

Internal appeals are managed by the same company that denied your claim. They are not neutral. It’s important to note that internal appeals may fail and pursuing them can consume the time you have to file a legal claim.