Pay back partial CPPD deduction

If the insurance company deducts their estimate of CPPD (eg. $500) and then CPPD turns out to be $600/month, do they expect to be paid back in a lump sum or do they cut off future payments until the difference is paid off?

It depends on the wording of your group contract (the master policy). My husbands says any over payment must be paid back within 6 months. As we are suing his Insurer for estimating his CPP-D and for misrepresenting his policy that he had to apply while still in the own occ. definition-I might purchase a draft payable to GWL but hold onto it until the court decides.
That way I have technically set aside and paid them (not used the funds) but can cash back into my account if the court rules in favour of my spouse.

Situation: A. is approved for CPP-D and gets retroactive payments in the amount of $10,000. A.'s insurance benefits are $1,000/month. There is nothing in A.'s policy about paying off the CPP-D back payments to the insurer within a limited time frame. Then A. decides to tell the insurer that he is not able to return the money right away and requests the insurer to deduct the owed amount from the future payments.

Questions: What will happen next? Is this the right thing to do? What is the insurer’s reaction? How does the situation affect A.'s credibility if the case happen to go to court one day?

The back payment is owed to the insurer. You likely have not got the section on claim provisions and over payments.

I think it would affect your credibility if you knew the funds belonged to the Insurer and withheld them unless there is a clause in the policy that allows a delay or how over payments are handled.

There is a court decision which permitted the over payment to be deducted monthly from the LTD-but that is a unique case.

If you have no assets to seize I know that some Insureds spend the money out of ignorance and have them claimed bankruptcy on owing the money to the Insurer. Since the bankruptcy wrote off the debt the Insurer had to resume paying the claimant. Doing this knowingly though would be likely be fraud.

I thought they would be more motivated to keep you on ltd if they can only deduct the owed money from future payments.

Will depend on your insurer and policy wording. Normally insurers demand / expect to be paid back immediately out of the lump sum CPP retroactive payment you get from Service Canada.

David Brannen

Disability Lawyer with Resolute Legal

The response posted above is based on the limited factual information made available and is not intended as a full and complete response to the question. The only reliabile manner to obtain complete and adequate legal advice is to consult with a lawyer, fully explain your situation, and allow the lawyer enough time to research the applicable law and facts required to give an adequate opinion. The basic information provided above is intended as a public service only, a full one-on-one discussion with a lawyer should be done before taking any any action. The information posted on this forum is available to the viewing public and is not intended to create a lawyer client relationship with any person. If you want one-on-one advice, please click here to request a free consultation or call toll free 1-877-282-5188 to speak with a member with our disability claim support team.