The Recurrent Disability and Termination of Employment
The issue of a recurrent disability can present a major issue for a person who had been in receipt of LTD benefits and his employment has been terminated, unjustly or otherwise.
Most LTD policies have a provision which allows for a “recurrent disability” which permits the insured to continue the pre-existing claim provided that a related claim is presented within a defined time, usually six months, as determined by the policy.
Absent the consent of the insurer to extend this time period by mutual agreement, the insured has a conundrum to face to come off coverage due to an apparently successful recovery. As they do not have continued employment to which they can return, they face a high risk of no further disability coverage, once the time allowed for a recurrent disability has expired.
They certainly will not be underwritten or highly rated for private disability coverage and likely will have a serious issue with respect to coverage with new employment, if the latter is a possibility. 1
If the termination of employment was unfair, reinstatement may remain a possibility as a human rights remedy. The insured for these reasons may be reluctant to tempt fate and voluntarily agree to decline continued coverage, which may allow for the insurer to entice this very conduct by privately offering an extended off policy variation of the recurrent period or some other incentive.