Denied Critical Illness – Should I call a Lawyer?

By Matt Lalande in Critical Illness, Hamilton Law Firm, Hamilton Lawyer on September 25, 2022

An unforeseen illness can have a significant financial impact on families. If a breadwinner is seriously ill – then bill payments, childcare cost, mortgage and insurance payments can get delayed and cash flow could suffer. Luckily, a critical illness policy can provide financial support during your period of recovery. Critical illness is a form of insurance that provides a lump sum payment if you suffer the sudden onset of a covered illness.

Critical illness is particularly significant because many people who develop a critical illness are still in the prime of their working lives. In fact, statistics show that Canadians are ten times more likely to be unable to work due to a critical illness than die before age 65. For example, over 50,000 Canadians have a stroke every year. Over 900,000 people living with cancer that accounts for 30% of all annual deaths in the country. In addition, the prevalence of Parkinson’s disease in Canada has been found to be one of the highest of any country in the world with approximately 5,500 new cases diagnosed each year in Canada.

Unfortunately, there are many valid cases of critical illness insurance claims that are denied by disability insurance companies. Insurance denials can come as a shock and create a great deal of stress for people with critical illnesses – who are suffering financially. If you’ve been denied critical illness insurance, call our critical illness lawyers at Lalande Personal Injury lawyers. We have experience with critical illness

What is critical illness?

Canadian statistics show that workers are likely to be unable to work due to a critical illness then die, before the age of 65. It’s estimated that one to heart attack victims is under the age of 65. Cancer rates have risen exponentially over the last decade, with a new diagnosis every 45 minutes. Thankfully, modern medicine has improved dramatically and has allowed people who are sick to make full recoveries. Since the 50s, there’s been a 50% decrease in the rate of fatalities from heart attack and stroke. It’s been reported that 75% of all stroke victims will survive. 85% of kidney transfers are now successful. There is now a 60% survival rate after five years for the 10 most common cancers. In addition, statistics show that the odds are that over 70% of people will be alive five years after their first heart attack. The problem is that the sudden onset of a serious illness could spin an individual or a family into financial crisis. Many insurance companies in Canada offer critical illness policies which provide a lump-sum benefit that can ease a person’s financial burden and that can be used for whichever way he or she sees fit.

What are Critical Illness “Insured Conditions”?

In Canada, virtually all critical illness policies refer to “the big four”: heart attack, stroke, cancer and coronary bypass surgery. Aside from these, some insurance companies do cover what are known as the top 10 conditions (although some offer much more comprehensive coverage, including hard to diagnose conditions) . The “Top 10” are set out below:

• heart attack
• cancer
• stroke
• coronary bypass surgery
• multiple sclerosis (MS)
• kidney failure
• organ transplant
• paralysis
• deafness
• visual impairment

Other conditions that may be covered are:

• terminal illness
• Parkinson’s disease
• Alzheimer’s disease
• motor neuron disease
• severe burns
• angioplasty
• occupationally acquired HIV
• severe mental illness

Is critical illness similar to long-term disability insurance?

Both long-term disability and critical illness insurance are types of life insurance but serve different purposes. Critical illness is payable as one lump sum to a policyholder in the event that he or she suffers a critical illness. In theory, a person could suffer a critical illness, such as cancer, and still be able to continue productive work throughout treatment and for years after. A critical illness payment would be made to the policyholder to assist him or her through difficult times. Disability insurance on the other hand, only pays in the event that the life insured is unable to work due to injury or illness and satisfies the definition of total disability as set out in his or her long-term disability policy. Once a person or disabled party resumes to work, long-term disability benefits are not payable.

Other differences are that with disability benefits there may be a substantial waiting period before long-term disability benefits commence. Long-term disability benefits are capped at a maximum of 65 to 70% of a person’s earnings (generally) and are designed to replace his or her income, not to provide for additional expenses incurred as a result of the affliction. Critical illness policies fill that gap. They provide a lump sum of cash to a living person to be used for whatever purpose the insured deems to be appropriate, in the event of diagnosis of a covered critical illness.

Why do insurance companies deny Critical Illness Claims?

Critical illness claims, like other insurance claims, can be denied for many reasons – reasons which are wrongful or in some cases – justified. If you’ve been denied a critical illness payment, it’s important that you get legal advice to determine your legal options. Below are a few common reasons for critical illness claims being denied:

The policyholder did not meet the “survival period” – in critical illness insurance policies, “survival period” is a term used to refer to the period between the diagnosis of a critical illness and the payment of benefits by the insurance company. The survival period is typically 30 days, but it can vary depending on the insurer and the policy.

The policyholder’s claim is denied due to a misrepresentation or non-disclosure in the application for insurance coverage – in order to be eligible for critical illness insurance, policyholders are typically required to undergo a medical exam and disclose any pre-existing conditions. If a policyholder does not disclose a pre-existing condition and is later diagnosed with a critical illness, the insurance company may deny the claim on the grounds that the policyholder misrepresented their health status.

The policyholder did not have a condition (or the condition is debatable) that is considered a “covered critical illness” under the policy – coverage for critical illnesses can vary depending on the insurer and the policy. It is important to review your policy carefully to ensure that you are aware of what is and is not covered. Illnesses that are considered “covered” or not are regularly reviewed, as a result of new medical research, and policies are updated accordingly. If someone has had a critical illness insurance policy for many years, for instance, it would be a good idea to have the policy reviewed by a medical expert and legal professional to ensure that you are still eligible for coverage under the critical illness policy originally purchased.

Exclusion Clauses – in insurance law, exclusion causes are clauses in an insurance policy that specifically exclude certain types of risks, events, or damages from being covered by the policy. For critical illness policies, common exclusion clauses might exclude coverage for illnesses caused by drug or alcohol abuse, self-inflicted injuries, or pre-existing conditions.

The two most common cases of critical illness insurance claims being denied as a result of the “exclusion clause are related to the “pre-existing condition” exclusion and the “90 day” exclusion:

Pre-existing condition exclusion: if a policyholder does not disclose a pre-existing condition and is later diagnosed with a critical illness, the insurance company may deny the claim on the grounds that the policyholder misrepresented their health status. Pre-existing conditions are typically defined as any illness or condition that the policyholder was aware of prior to the purchase of the critical illness insurance policy, which can include conditions like diabetes, cancer, or heart disease.

90-day exclusion: any illnesses or injuries that occur within the first 90 days of the policy being in effect may not be covered.

Other exclusions that are noted to be quite common are if the critical illness results directly or indirectly from or associated with any of the following:

• intentionally self-inflicted injury, or attempt at suicide, while sane or insane
• war, insurrection or voluntary participation in a riot
• participation in a criminal offence or provoking an assault
• use of any drug, poisonous substance, intoxicant, or narcotic, unless prescribed for the person by
  a licensed physician and taken in accordance with directions given by the licensed physician
• drinking and driving.

While it is important to be aware of these common exclusion clauses, it is also important to remember that insurance policies are contracts and, as such, are subject to interpretation by insurance companies and the court system. It’s vital that you speak with a critical illness lawyer if your critical illness insurance company has denied you a critical illness payment.

Mistakes in critical illness benefit claims application – disability companies are well-known for their stringent standards when approving critical illness insurance claims. Many legitimate cases of individuals with a proven critical illness have been denied their benefit claims. It’s important to remember that disability insurance companies are profit-driven organizations prioritizing maintaining a healthy profit margin by denying any critical illness insurance benefit claims they feel they can find any errors in, from the initial application process to the way an individual files their claim:

• failing to disclose pre-existing conditions
• inaccurate or incomplete information on the application form
• misrepresenting or lying about personal health history
• not following the application instructions to the letter
• receiving medical treatment or taking medication that was not disclosed on the application form
• making a false statement on the application form
• not disclosing all relevant medical information
• failing to have the required documentation when filing a claim
• submitting a claim that is outside of the time limit set by the policy

If you have been denied critical illness insurance coverage, it is important to understand your options and rights. A personal injury lawyer with experience in critical illness insurance law like Lalande Personal Injury Lawyers can help you understand your policy and the appeals process. If you have been denied coverage, do not hesitate to contact Lalande Personal Injury Lawyers to discuss your case.

What to do if your critical illness benefit claim has been denied

Insurance companies will encourage you to appeal the decision through their internal systems when your critical illness benefit claims are denied. Our critical illness lawyers we do not recommend you waste your time by going through the appeals process set up and run by the same insurance companies that have turned down your initial application for disability benefits. There is no reason to expect that your appeal will have a more positive result than the first denied decision.

If your critical illness benefit claims have been denied, there are a few steps that you can immediately take:

Don’t hesitate to contact a critical – the more time that is spent worrying or Googling about the options that you might have, the more difficult it becomes to overturn a denied insurance claim. Understanding insurance law (and especially how to go up against the experience of well-trained disability insurance companies) is a huge undertaking. Reach out to an experienced insurance lawyer who will stand with you and genuinely cares that you get the financial resources needed to resume your life.

Organize your information – keep a detailed account of all the information that you have regarding your critical illness, including any medical treatments you’ve undertaken, communications about your condition with your company, and communications with your insurance company. Presenting a verified timeline of events that can prove that you’ve taken reasonable steps toward satisfying the conditions of your critical illness insurance policy is an important first step toward restoring your insurance benefits.

Speak a critical illness lawyer sooner rather than later: since 2003, Lalande Personal Injury Lawyers has been successfully helping people with critical illness regain their denied insurance benefits. We understand the stress and frustration that dealing with a denied insurance claim can have and we’re also experienced in dealing with insurance companies. We know the kind of techniques that they will use to try and deny critical illness insurance claims and are prepared to stand with you and ensure that you are granted your rightful insurance benefits.

Have you been denied a critical illness benefit payment?

Living with a critical illness is stressful enough without having to deal with the burden of going through the tiring process of dealing with unsympathetic insurance companies. Lalande Personal Injury Lawyers have been successful in fighting and winning critical illness insurance claims for critical illness clients and are prepared to stand with you. If you have been denied critical illness insurance, contact our critical illness law firm today to learn more about your rights. You can reach us no matter where you are in Ontario by calling 1-844-LALANDE or local throughout Southern Ontario by calling 905-333-8888. Alternatively, you can fill in a contact form and one of our staff will get back to you within a very short period of time.

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