This week’s entry comes straight from the Toronto Injury Lawyer Blog reader mailbag.
Question: Goldfinger: Love the Blog. Hate the new head shots. But seriously, my wife and I are looking at getting insurance. You know. We were curious about life, disability, critical illness etc. You see it all. What should we be looking out for when buying our insurance. Best Regards JJ + PJ
Well JJ and PJ, thanks for your question. Always nice to hear from our readers.
NOTE: Lawyers don’t sell insurance. We sue insurers after they’ve denied your claim.
For starters, buying insurance is not an easy decision. For starters, I could count of a million things more exciting than insurance to spend your hard earned dollars on. On top of that, insurance can be expensive.
Secondly, have you ever read an insurance policy? They’re long, boring, and very difficult to understand. You really need to be a lawyer to truly understand what they’re trying to say. And even then, some clauses and and definitions contained in those policies are subject to one’s interpretation. Any ambiguity contained in a policy will be interpreted in your favour: BUT: do you really want to have to retain a lawyer and fight in Court for years and years over benefits, when you could have just saved the trouble and hassle and received them now? That’s just a big pain in the you know what; not to mention all of the unnecessary stress and anxiety which might come with involved in being in litigation with a large deep pocketed insurance company. Hey: sometimes it’s necessary. That’s what we’re here for.
Here are a few tips I’ve learned from litigating life insurance, disability insurance and critical illness insurance policies throughout the years.
1. Don’t trust what your broker says. Trust what the policy reads. Some brokers will do or say just about anything to sell you on an insurance policy. A sale is a sale is a sale. A broker may tell you that the policy works one way; when in reality it works a completely different way. At the end of the day, what’s contained within the four corners of the policy is ultimately going to trump what any broker allegedly told you years ago to get you to sign up for the insurance. Establishing a broker’s negligence claim is certainly a possibility, but they are more difficult to establish than a straight claim on the policy itself. A lawyer cannot got back in time and change the wording of your policy. Do your best to understand what you’re signing up for.
2. Find out how the exclusions on your policy work. It doesn’t matter if it’s a life, critical illness or disability insurance. All policies will contain exclusions which are there to kill your claim. Understand what these exclusions are by reading them and asking questions about them. Example: Many Life Insurance and Critical Illness Policies contain exclusions when dealing with a medical test undertaken in the 90 days before entering a policy, that ultimately lead to a diagnosis leading to death or illness. IE: You have a medical test on May 1st. You sign up for Critical Illness on June 1st. On July 1st your family doctor calls you in and tells you that the test results have come back, and you’ve tested positive for (insert disease/critical illness here).
3. When dealing with Long Term Disability Policies, understand the difference between an “own occupation rider” vs. “any occupation rider”. This is a significant difference which everyone in the market for long term disability insurance, or who already has LTD insurance should understand. The test for disability under a majority of policies changes at the 2 year mark from your ability to perform your “own occupation” to “any occupation”. Any occupation will mean the EASIEST job you can think of. Think of working at a seated position at a pillow factory, or in a toll booth, or as a parking lot attendant. So long as you can perform the essential tasks of that easy occupation, then you won’t meet the definition of disability under the “any occupation” rider of the LTD policy. How do you get around this? Ask that your policy contain an “own occupation” rider throughout the course of your policy. That way, if you’re a brick layer, and you can no longer perform your job as a brick layer on account of back pain, you will be covered for benefits for the duration of your policy.
4. Find out the duration of your policy, duration of benefits, premiums owing over the lifetime of the policy and the quantum of benefits. It amazes me how many people pay blindly in to policies without understanding how much they stand to get out of their policy if they need to make a claim. Some long term disability policies aren’t as long term as you think they are. They might only last for a maximum of 5 years. Others have waiting periods of up to a year or so before you can even start receiving benefits. Other policies state that they will pay out to a maximum of $5,000/month, only if it’s supported by your income. Then when an accountant looks at your income, it turns out that the $5,000 monthly benefit you expected to receive is really only $750/month.
5. Planning on retiring later in life, like at age 67 or 70? Request that your policy cover you for that long, and not just until the age of 65.
6. Carefully review the heart attack, cardiac arrest and cancer exclusions contained in Critical Illness Policies. This is where insurers really pack in the exclusions. I’ve seen countless claims fail on account of these onerous exclusions.
7. Canadian insurers do business differently than American Insurers. American Insurers litigate everything and act accordingly. They will be very aggressive in referring you to medical appointments with their quack doctors, conducting surveillance, hounding you with phone calls etc. While Canadian Insurers don’t approve EVERYTHING, in my experience, they are certainly less nasty than the large American Insurers I’ve come across.
8. The Insurance Policy offered through your work benefits package may not be as generous as you and your co-workers think it is. In my experience, insurance policies offered through work are bare bones policies, which continuously get stripped down (especially if it’s through a Union). You will find that one of the sacrifices that a Union might make is further deteriorating the benefits under your policy without you even realizing. Your Union will tell you that Management has agreed to a 2% raise, but the concession was that your Life Insurance was reduced, or that your LTD policy was changed such that benefits which used to extend up to the age of 65, now only last for up to 3 years or the age of 65, whatever COMES FIRST.
Last and not least, having insurance is better than having no insurance at all. You will have no case if you have no policy to sue on.
I would like to take a moment to address Toronto’s baseball team. How is it that their star short stop gets injured in his first at bad of the season? I’ll tell you how. They made him play on turf in exhibition games in Montreal, when they knew, or ought to have known that he was coming off a nagging injury. That player makes millions of dollars per season. If the team is going to have any success, he will be at the root of that success. Risking injury for a pre-season spectacle makes no sense. A friend of mine who works and follows Toronto’s baseball team closely commented to me that the number of pitchers who play for Toronto that have required Tommy John surgery compared to the rest of the league is disproportionately LARGE. That’s a product of over work, over training, or improper training. Answer? Fire the training staff? Hire some personal injury lawyers on the team to monitor player safety and working conditions? I don’t have an answer for you. But I can tell you that the safety for these Toronto baseball players is NOT the best. Playing on a turf field also doesn’t help the knees.