Disability insurance: your insurer cut off your benefits?

A letter a few lines long, and the income that kept you afloat is gone. What can you do when your disability insurer decides you are no longer disabled? A recent Quebec Superior Court judgment, in a case the insured fought on her own against her insurer, gives clear answers on the burden of proof, on clauses requiring insureds to seek treatment and, above all, on the delicate case of a person whose illness prevents her from recognizing that she is ill.

For many workers, disability insurance is a safety net they never think about until the day they need it. And it is often at that very moment, when they are most vulnerable, that they discover the net can be pulled away. One of the insurer’s consulting physicians reviews the file, an independent medical examination is ordered, and then the notice arrives: your benefits will end on such-and-such a date. Taking on a large insurance company while sick, exhausted and without income is a David-and-Goliath fight. Few people attempt it, and fewer still without a lawyer.

Yet that is exactly what the plaintiff did in Gauthier c. Beneva, 2026 QCCS 2433 (decision in French), rendered on June 23, 2026 by the Honourable Sophie Leblanc of the Superior Court, District of Gatineau. After a four-day hearing, the judge ordered the insurer to reinstate the insured’s disability benefits retroactively to February 1, 2020, and to keep paying them for as long as her disability lasts. The reasoning is worth a closer look, because it addresses a question Quebec courts have rarely tackled head-on.

The facts in brief

In 2013, the plaintiff was a medical resident at the Centre hospitalier universitaire de Sherbrooke. She was covered by a group insurance contract between her federation (the Fédération des médecins résidents du Québec) and La Capitale, which became Beneva in 2022. On January 4, 2013, she stopped working for medical reasons. The diagnosis was bipolar I disorder.

As is common in group insurance, the contract set out two successive definitions of total disability:

for the first 60 months, the insured is disabled if she is unable to perform the usual duties of her own occupation;
after 60 months, she is disabled only if she is unable to engage in any gainful activity paying at least 80% of her pre-disability salary, having regard to her education, training or experience, whether or not such a job actually exists.

After the period covered by the employer, the insurer began paying benefits in January 2015. As the change of definition approached, in October 2017, it informed the insured that her benefits would end in January 2018. After several requests for review and a complaint, it reversed course in February 2019 and acknowledged that she met the second, stricter definition. Benefits were reinstated retroactively.

In the meantime, the insured had reported pain in her hip, shoulder and wrist; one of the insurer’s consulting physicians identified, among other things, a torn hip labrum and low back pain. The insurer ordered an orthopaedic assessment. On the strength of that report, it informed the insured on January 24, 2020 that her physical limitations did not prevent her from holding a gainful job. Benefits ended on January 31, 2020. After unsuccessful requests for review, complaints and a formal demand letter, the insured sued.

One important twist: in court, the insured argued that her disability stemmed from her physical problems, and she herself disputed the bipolar diagnosis. The insurer, for its part, maintained that the psychiatric condition was no longer relevant, since the insured had stopped her medication and all psychiatric follow-up.

First lesson: it is up to the insurer to prove the disability has ended

As a general rule, a person claiming benefits must prove that she is disabled within the meaning of her contract (article 2803 of the Civil Code of Québec). But once the insurer has recognized the disability and paid benefits, the picture changes: the right to benefits becomes, in legal terms, the “normal state of affairs.” It is then up to the insurer that wants to stop paying to show, on a balance of probabilities, that the situation has changed.

This principle is nothing new. It flows from the Supreme Court of Canada’s decision in Caisse populaire de Maniwaki v. Giroux, [1993] 1 S.C.R. 282, and the Quebec Court of Appeal has reaffirmed it many times, notably in Forest c. Industrielle Alliance, 2018 QCCA 875, Blais c. Ivari, 2021 QCCA 1931, and Desjardins Sécurité financière c. Hébert, 2023 QCCA 1094 (all in French).

What is instructive is how the judge applied it. The insurer’s decision letters were, she wrote, brief and short on detail: standardized form letters. To understand why the insurer had reinstated the benefits in 2019, the court had to dig into its internal administrative notes. And the note of the claims officer who had recommended reinstatement relied on the combination of the insured’s mental health problems and her physical pain. In other words, the insurer itself had recognized that the psychiatric condition contributed to the disability.

To stop paying in 2020, the insurer therefore had to show that each of the recognized conditions had ceased to be disabling. On the physical side, it succeeded: the orthopaedic, rheumatology and employability reports satisfied the judge that the insured’s pain did not prevent her from holding any job. On the psychiatric side, however, the insurer had conducted no investigation at all. It had simply relied on the insured’s own statements that she was doing better since stopping her medication. For the judge, statements of that kind are not enough to establish that a psychiatric illness has resolved, especially when the most recent medical evidence described her condition as “precarious.”

Second lesson: clauses requiring the insured to seek treatment

Most disability insurance contracts contain exclusion clauses that suspend benefits when the insured is not under the continuous care of a physician or is not receiving appropriate treatment for her condition. This contract did. In insurance terms, these clauses reflect everyone’s general duty to mitigate their own loss (article 1479 C.C.Q.): you cannot remain disabled at the insurer’s expense by refusing reasonable treatment that would allow you to return to work.

Proof then proceeds in three stages, following the model described by the Supreme Court in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37: the insured proves she is covered, the insurer proves the exclusion applies, and the insured may then prove an exception that sets the exclusion aside.

These clauses have teeth. In the Hébert case mentioned above, a dermatologist who developed a psychological disorder after a heart attack lost his benefits as of May 2019 because he refused the recommended psychiatric follow-up. The Court of Appeal nonetheless made clear that an insured is not required to accept any and all treatment: he may decline treatment that is of little use, experimental, risky, disproportionate or otherwise unreasonable. The test, as the Court of Appeal noted in Lebel c. 9067-1959 Québec inc., 2014 QCCA 1309, is how a reasonable person in the same circumstances would have behaved, and the Supreme Court, in Laflamme v. Prudential-Bache Commodities Canada Ltd., 2000 SCC 26, stressed the circumstances specific to each case.

Here, there was no doubt that the insured had not taken her medication since late 2016 and had had no psychiatric follow-up since early 2018. She had told the insurer herself that she had stopped her medication. The judge therefore concluded that, on its face, the exclusion applied. The question was whether the insured could set it aside.

The heart of the judgment: when refusing care is a symptom of the illness

This is where the decision stands out. The insurer argued that the insured, a woman of superior intelligence who had nearly completed her medical residency, was legally capable of consenting to care within the meaning of article 16 C.C.Q. She fully understood, it said, that stopping her treatment would cost her her benefits. The insured had in fact described her decision to stop her medication to the insurer as free and informed. According to the insurer, she therefore had to live with the consequences.

The judge rejected that approach. In her view, legal capacity to consent to care is not the right starting point. What matters is the insured’s psychiatric condition and its effect on her actual ability to follow through with treatment. The question becomes: would a reasonable person suffering from the same illness be unable to maintain medical follow-up because of the symptoms of that illness? The judge answered yes.

The decisive evidence came from the psychiatrist retained by the insurer itself. He described anosognosia, that is, an inability, caused by the illness itself, to recognize that one is ill. He explained that it is common for a person with bipolar disorder to deny the condition and refuse treatment. He concluded that the insured still suffered from a severe, chronic and disabling psychiatric condition, describing her as clearly unable to return to the labour market because of a psychiatric condition she denies. The insurer’s own expert evidence thus turned against it.

The judge drew the following conclusion: the plaintiff’s refusal of treatment is inseparable from the very symptoms of her illness. Requiring her to seek treatment would impose an obligation that her illness specifically prevents her from fulfilling. This, she wrote, is the materialization of the very risk the plaintiff had insured herself against in the first place. She relied by analogy on Janiak v. Ippolito, [1985] 1 S.C.R. 146, in which the Supreme Court distinguished between people able to make a rational decision about their own health and those whom a pre-existing psychological condition renders unable to do so.

The judge added a second, more conventional ground: the insurer had known since October 2017 that the insured had stopped all psychiatric treatment. It nonetheless recognized her disability in 2019. It could not later rely on that same lack of treatment to terminate coverage.

No moral or punitive damages

The victory was only partial. The insured claimed $75,000 in moral damages (compensation for non-financial harm such as stress and distress), $200,000 in punitive damages and $17,000 for her former lawyers’ fees. All of it was dismissed.

The judge reiterated that an insurer must handle claims with the utmost good faith, objectively and with an open mind (Barrette c. Union canadienne, 2013 QCCA 1687). But, relying on Bédard Martin c. Intact Compagnie d’assurance inc., 2024 QCCA 730, she wrote that a decision to stop disability benefits is not, in itself, a wrongful act, even when it is unjustified. A distinct fault in the handling of the file must be proven. Here, the insurer had seriously investigated the physical complaints, and it could not be faulted for failing to probe the psychiatric issue when the insured kept writing that she no longer had symptoms. As for the delays, they were largely explained by the growing complexity of the file and by the insured’s incomplete cooperation; the judge described the insurer’s requests as a necessary evil for an insured who must cooperate.

The judge also noted that whether moral damages can be awarded solely because benefits were wrongly terminated, without any fault by the insurer, remains controversial in Quebec. In the common law provinces, the Supreme Court allowed such damages in Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, but the Quebec Court of Appeal has expressed reservations about importing that solution into civil law, since article 1617 C.C.Q. generally limits compensation for late payment to interest. By contrast, in Hébert, the insurer’s fault in handling the claim justified an award of $20,000 in moral damages. Everything therefore turns on the insurer’s conduct, not just on the outcome.

Finally, future benefits will be paid monthly rather than as a lump sum, since the contract does not provide otherwise.

Is the judge breaking new ground?

Partly, yes. The legal framework she applied is well established: the shifting burden of proof, a broad and liberal interpretation of the insurance contract in favour of the insured, treatment clauses treated as a form of the duty to mitigate, and an assessment of any refusal in light of the insured’s circumstances. On all of these points, the judge faithfully followed the Supreme Court and the Court of Appeal.

The original contribution lies elsewhere. To our knowledge, it is rare for a Quebec court to set aside a lack-of-treatment exclusion on the ground that the refusal of care is itself a symptom of the insured illness, and to expressly reject legal capacity to consent to care as the deciding test. Our searches of CanLII and of the CAIJ databases did not turn up another Quebec disability insurance decision adopting this reasoning in these terms. The idea did not come out of nowhere, however: in Stewart v. Elk Valley Coal Corp., 2017 SCC 30, a workplace human rights case, Justice Gascon, in dissent, had already stressed that denial can be a symptom of the disability itself. The majority did not follow him on the outcome.

This reasoning will not win unanimous support, and that should be said plainly. Three objections come to mind:

The objective test. In Lebel, the Court of Appeal noted that the duty to mitigate is assessed on an objective standard. Asking what a reasonable person “suffering from the same illness” would have done brings the test closer to the insured’s subjective situation. Some will see this as a legitimate adaptation to the circumstances; others, as a drift.
The reach of exclusion clauses. Insurers may fear that every refusal of mental health treatment will now be framed as a symptom. The judgment does not go that far: it rests on specific expert evidence, coming from the insurer itself, and on a long, well-documented medical history. Without such evidence, the outcome would likely have been different.
The state of the law. This is a trial-level judgment. Until the Court of Appeal rules on the question, other judges may reason differently.

Conversely, one can argue that this is the only solution consistent with the very purpose of the contract: financially protecting a person whom illness prevents from working. Denying benefits because the illness is producing its effects would amount to excluding the most severe forms of that illness from coverage. One further remark, which goes beyond the judgment: claims based on the Quebec Charter of Human Rights and Freedoms are limited in this area, as its section 20.1 provides that using state of health as a risk-determination factor in an insurance contract does not constitute discrimination. In practice, these disputes are fought on the terrain of contract law.

A court attentive to a self-represented litigant

It is hard to read this judgment without noticing the rigour and humanity with which it was written. The plaintiff represented herself from the start of the proceedings, facing two lawyers acting for the insurer. She argued a theory, physical disability, that the evidence did not support. The judge could have simply rejected that theory. Instead, she closely analyzed the psychiatric condition, which the insurer itself had put in issue by invoking the exclusion clauses, examining all the evidence, including the insurer’s expert reports, in light of the principle that an insurance contract is to be interpreted broadly and liberally in favour of the insured.

This concern for fairness did not turn into indulgence: the judge noted the insured’s shortcomings in cooperating, the sometimes discourteous tone of her letters, and dismissed all her damage claims. That balance is precisely what makes the decision credible. It should be kept in perspective, though: the insured won in part because the insurer’s own expert confirmed her illness. Taking on an insurer without a lawyer remains, in the vast majority of cases, a perilous undertaking.

Key takeaways: what to do if your insurer stops your benefits

Read your definition of disability, especially the change of definition. Many contracts switch, after 24 or 60 months, from inability to do your own job to inability to do any job. That is often when benefits get cut off. Prepare with your doctor several months in advance.

Demand reasons and request your complete file. Denial letters are often terse. In Quebec, you are entitled to obtain the personal information the insurer holds about you (Act respecting the protection of personal information in the private sector, s. 27), including claims officers’ notes and consulting physicians’ opinions. In this case, those notes held the key to the dispute.

Remember who must prove what. If the insurer has already recognized you as disabled, it is up to the insurer to show your condition has changed. Ask it precisely what change it is relying on and what medical evidence supports it.

Keep up your medical follow-up. Courts take continuous-care and appropriate-treatment clauses seriously. If you decline a treatment for a valid reason (side effects, pregnancy, risk, doubtful effectiveness), have your doctor document it in writing.

Choose your words carefully with the insurer. Every call is logged. In this case, the insured’s repeated statements that she was doing better were not enough to justify ending her benefits, but they convinced the judge that the insurer had committed no fault, which sank her damage claim. Describe your limitations honestly and precisely, without downplaying them.

Cooperate, but in writing. Attend the medical examinations you are asked to attend. If you cannot, notify the insurer in advance, in writing, and give the reason. Here, a missed examination whose reason (a pregnancy-related hospitalization) was not communicated in time led to a roughly three-month interruption of benefits, later repaid.

Use internal and external recourses, but keep an eye on the deadline to sue. Request a review, file a complaint with the insurer and then, if needed, with the Autorité des marchés financiers or the OmbudService for Life and Health Insurance. Be careful: in Quebec, the limitation period to sue is generally three years (article 2925 C.C.Q.), and these steps do not necessarily interrupt it. Do not let time slip away.

If a loved one denies their illness, get involved. When illness prevents someone from recognizing that they need help, those around them can play a decisive role, notably by supporting them through the process or, if their condition requires it, by considering the protective measures provided by law.

Have your case assessed early. These disputes are won with solid medical evidence, often expert reports. A lawyer can help you pinpoint the weaknesses in the insurer’s decision before the situation becomes more complicated.

Disability insurance: your insurer cut off your benefits? When refusing treatment is a symptom of the illness