How Disability Insurance Claims Work

A disability insurance claim in Canada follows a fairly predictable path: you notify the insurer, you and your doctor complete claim forms, the insurer decides whether you meet the policy’s definition of disability, the elimination period runs, and then monthly benefits begin. What surprises most people is how long the gap between stopping work and receiving the first payment can be, and how much the outcome depends on paperwork done in the first few weeks.

This guide walks through the process step by step, for both group long-term disability plans and individual disability insurance policies. It’s written for Ontarians who are about to claim, are partway through one, or want to understand the process before they buy.

Step 1: Notify the insurer early

Almost every disability policy has two deadlines: a notice of claim deadline (commonly within 30 days of the disability starting, or as soon as reasonably possible) and a proof of claim deadline (commonly within 90 days after the elimination period ends, though the exact terms vary). Missing them doesn’t automatically kill a claim, but it gives the insurer a reason to push back, and it delays everything.

Our advice is simple: the day you and your doctor agree you can’t work, tell the insurer. For a group plan, that usually means telling your employer’s HR or benefits contact, who will start the process with the insurer. For an individual policy, you call the insurer’s claims line or your broker. At Hayes we open the claim with the insurer and send you the forms the same day.

There’s no penalty for notifying and then recovering before the elimination period ends. There is a real cost to waiting.

Step 2: The three claim forms

The insurer will send a claim package. Whatever the branding, it contains the same three pieces.

Form	Who completes it	What it covers
Claimant (or employee) statement	You	Your condition, when you stopped work, your job duties, treating doctors, other income sources, and consent for the insurer to obtain medical and employment records
Attending physician statement	Your doctor (and sometimes a specialist)	Diagnosis, date of onset, treatment plan, medications, objective findings, functional restrictions and limitations, and expected duration
Employer statement (group plans only)	Your employer	Your occupation, duties, hours, salary, last day worked, sick leave used, and whether modified work is available

The attending physician statement is the one that carries the most weight. A few practical points:

• Restrictions and limitations matter more than the diagnosis. The insurer isn’t asking “what does this person have?” but “what can’t this person do, and for how long?” A form that says “lower back pain” and nothing else is weak. One that says “cannot sit more than 20 minutes, cannot lift more than 5 kg, cannot drive, expected duration 4–6 months pending surgical consult” is a claim.
• Book a proper appointment. Ask your doctor for time to complete the form carefully, and offer to walk through your job duties so the restrictions can be tied to them.
• Specialists strengthen the file. If you’re seeing a specialist, ask for their report to be included or for them to complete a separate statement.

The claimant statement asks about your duties in detail. Be specific and honest. Under an own-occupation policy, the insurer compares your restrictions against your job; under an any-occupation definition, against any job you’re reasonably suited for. Our guide to own-occupation vs. any-occupation explains why that wording drives the whole decision.

Step 3: The elimination period runs

The elimination period is the waiting period between the start of your disability and the day benefits begin accruing. Common options are 30, 60, 90, 120 and 180 days, with 90 the most common on individual policies. Group LTD plans often set it to match the end of short-term disability or sick leave, frequently 17 to 26 weeks.

Two things people get wrong:

• Benefits accrue after the elimination period and are paid in arrears. On a 90-day policy, day 91 is the first day that counts toward a benefit, and the first monthly payment covers days 91 to 120, arriving after that. So even a smoothly approved claim often produces its first cheque four to five months after your last day of work.
• The claim can be assessed during the elimination period. Submit your forms as early as possible so the decision is made before the waiting period ends, not after.

We’ve written a separate explainer on how the elimination period works, including how to bridge it with EI sickness benefits, sick leave and savings.

Step 4: The insurer assesses the claim

A claims adjudicator or case manager reviews the forms, requests medical records from your doctors, and may ask for additional information. Common requests include:

• Clinical notes and test results from your family doctor and specialists
• A functional abilities form or a detailed job description from your employer
• A telephone interview with you about your condition, daily activities and treatment
• An independent medical examination (IME) by a doctor the insurer selects, or a paper review by an in-house medical consultant
• For mental-health claims, records from a psychiatrist, psychologist or counsellor, and evidence of an active treatment plan

Most policies require you to be under the regular and appropriate care of a physician for the condition. Gaps in treatment, unfilled prescriptions or declined referrals are used against claimants. If you disagree with a recommended treatment, tell your doctor and have the reasoning noted in your chart.

The insurer then decides: approved, denied, or pending more information. Ask for the decision in writing, with reasons.

Step 5: Approval and ongoing payments

Once approved, benefits are paid monthly. Whether they’re taxable depends on who paid the premiums: benefits from an individual policy you paid for with after-tax dollars are received tax-free; benefits from a group plan where your employer paid the premium are generally taxable.

Approval is not permanent. Expect:

• Periodic updates. Insurers request updated physician statements and progress reports, sometimes every few months early in a claim and less often later.
• Change of definition. Many group plans pay for two years under an own-occupation definition and then switch to any-occupation. The insurer will reassess at that point, and many claims end there. Individual policies with own-occupation to age 65 don’t have this cliff.
• Rehabilitation and return-to-work programs. Group insurers often offer or require participation in rehabilitation, retraining or graduated return-to-work plans. Cooperating is generally a condition of continued benefits.
• Surveillance. It happens, particularly on large or long claims. Your activities and social media should be consistent with your reported restrictions.

Offsets: what gets deducted from your benefit

Group LTD benefits are usually reduced by other income you receive for the same disability. The most common offsets:

• CPP Disability. Most group plans require you to apply and deduct the amount CPP pays. See CPP Disability vs. private disability insurance.
• Workers’ compensation (WSIB in Ontario) for work-related injuries.
• Employer sick pay, severance or other disability income.
• Sometimes retirement pension or earnings from part-time work.

Individual policies you buy yourself are generally not reduced by CPP or other sources unless you specifically chose a cheaper integrated version. This is one of the reasons an individual policy on top of a group plan is worth having: it’s the layer that doesn’t shrink.

EI sickness benefits, which pay 55% of average insurable earnings for up to 26 weeks, are usually claimed during the elimination period rather than alongside LTD; our explainer on whether EI covers you if you can’t work covers how they interact.

If the claim is denied

Denials happen, and they’re not the end of the road. In rough order:

1. Get the reasons in writing. The letter should say which policy provision the insurer relied on and what evidence was lacking.
2. Fix the gap. Most denials cite insufficient medical evidence. A more detailed physician statement, a specialist report, updated test results or a functional capacity evaluation can change the outcome.
3. Appeal internally. Insurers have an internal appeal process, usually with a deadline stated in the denial letter. Submit new evidence, not just a letter of disagreement.
4. Escalate. If the internal appeal fails, options include the insurer’s ombudsman, the OmbudService for Life & Health Insurance (OLHI), and a lawyer who handles disability claims. Many offer a free initial consultation and work on contingency.
5. Watch the limitation period. In Ontario, the general limitation period for starting a lawsuit is two years from the day you discovered (or ought to have discovered) the claim, which insurers often argue runs from the denial. Internal appeals do not necessarily pause that clock. This is general information, not legal advice; talk to a lawyer well before two years have passed.

Your broker should be involved throughout. We can’t adjudicate a claim, but we can explain the policy wording, chase the insurer, and make sure the file is complete. Life insurance claims follow a different and usually simpler path, which we cover in how life insurance claims work in Canada; critical illness claims are different again, and lump-sum rather than monthly, as explained in how critical illness claims work.

Six things that make a claim go smoothly

• Notify early, even if you might recover.
• Keep seeing your doctor on a regular schedule and follow the treatment plan.
• Keep copies of every form, letter and email, and note the date and name for every phone call.
• Describe your restrictions in terms of what you can’t do, tied to your job duties.
• Tell the insurer before any change: returning to work, starting part-time, moving, or a new diagnosis.
• Read the policy’s definition of disability before you fill in anything, so your evidence answers the right question.

Buying with the claim in mind

The best time to influence a claim is when you buy the policy. The wording you choose then decides how the claim goes years later. If you’re comparing coverage now, prioritise an own-occupation definition, a residual benefit, and a non-cancellable contract, and buy from an insurer with a reputation for handling claims professionally.

Hayes Family Insurance is an independent brokerage in Ottawa serving all of Ontario. We compare disability insurance from 30+ Canadian insurers, explain the claim provisions in plain English before you sign, and stay in your corner if you ever need to claim. Our advice is free; the insurer pays us.

Next step: get a free quote and we’ll show you how the claim wording differs between the policies you’re considering.