Disability Policies – Being Totally Disabled May Not Be Enough

In British Columbia, being totally disabled may not be enough to entitle you to benefits under a disability policy as a result of two common disability policy provisions.

First, the policy typically defines the policy term “totally disabled” as your being unable to perform substantially the “whole of the duties of your regular occupation” and being under the “regular care of a physician”. Even if you are “totally disabled” in terms of not being to perform your regular occupation, unless you are under the regular care of a physician, you are not considered to be totally disabled as defined in most disability policies and therefore not entitled to total disability benefits. In British Columbia, unlike other jurisdictions such as Ontario and the United States, you must be under the regular care of a physician even if you are permanently disabled and no useful purpose would be served by your regular attendance on a physician. This decision was reached in a British Columbia Court of Appeal decision, Andreychuk v RBC Life Insurance Co. 2008 BCCA 492 relying on an earlier decision of the Court of Appeal in Rose v. Paul Revere Life Insurance Co [1991], 85 D.L.R. [4^th] 433.

What does this mean as a practical matter? If you have a disability claim, you must ensure that you are under the care of a physician and attend upon their offices from time to time even in the event that “no useful purpose” is being served by your doing so. It is not unusual in the case of a total disability that after your condition plateaus that limited medical attention is required or there is no treatment required. While there is no timetable or a precise number of attendances that you have to have upon a physician, you want to ensure that you attend upon the offices of your doctor at reasonable intervals to ensure that you are considered to be undergoing treatment by a physician. This holds true as well for rehabilitation or treatment programs mandated by the insurer. If you do not participate in those programs, in our experience, some disability insurers will terminate your benefits fairly quickly.

The second typical disability policy provision that can result in your not obtaining total disability benefits even when you are totally disabled is called deductions for “Other Income Benefits” or “Basic Reductions to Monthly Disability Benefits” or “All Source Maximum for the Monthly Disabled Benefit”. You should consider whether the disability policy you might purchase contains such a provision if you have, or may have in the future, other insurance or other sources of income.

These types of provisions limiting payments under the policy can typically provide that any benefits you would otherwise be entitled to receive as a result of your total disability including monies that you receive from other sources are deductible on the benefits that you are entitled to receive under the disability policy and sometimes are more broadly worded to include monies received from a variety of sources including for example retirement income. Depending on the specifics of the terms in your policy, this can mean that because you have other income or qualify for other benefits, that you will not receive any disability payments under the policy or receive reduced payments. This can be true if you have other business or retirement income, government benefits or another insurance policy that entitles you to some sort of benefits. Cases in which these issues have been discussed include Milner v Manufacturers Life Insurance Co., 2006 BCSC 1571 and Dubasoff v. Mutual Life Assurance Co. of Canada [S.J. No. 171] (Sask. C.A.)