Common Disability Insurance Clauses

In this area, we want to explain and show some common insurance clauses. Please note that these clauses do not appear in every insurance contract but are usually present in some form or another. You must remember that private disability insurance in Canada is a matter of contract and every claim is reviewed in light of the specific clauses present in your insurance contract. Your rights and obligations and the insurance company’s rights and obligations are set out in writing in a written contract. In cases of private insurance this contract is the insurance policy that you are provided with when you apply for insurance. In cases of group insurance, the insurance contract is usually negotiated by your employer or union and they enter into the contract with the insurance company on your behalf. The insurance policy that is issued by the insurance company is the official legal wording that a court will look at in determining your entitlement to benefits. Some companies have an “easy read” interpretation of the official insurance policy. This “easy read” interpretation is, however written by the employer and is not the official contract and is not necessarily enforceable against the insurance company as they did not have any part in the language that was chosen or in how the employer interpreted the contract.

Here are some common insurance clauses that may appear in your policy:

  • You must be under the regular care of a doctor.
  • You must apply for disability insurance within . . .
  • You have a duty to follow reasonable medical advice to try to get better.
  • You are entitled to benefits when you are totally disabled.
  • Total disability is defined in most insurance contracts as . . .
  • The insurance company is entitled to an offset for any amounts that you are entitled to from Canada Pension Plan whether you apply or not. . .
  • Any legal action against the insurance company must be commenced within . . .