Phillip Fitzsimmons woke up in the middle of the night one day in February 2016 with a breathtaking, shooting pain in his abdomen.

“It felt like somebody was taking a sword and jamming it between my legs and on the right side of my stomach,” the 36-year old Brampton, Ont., man told Global News over the phone.

By March, Fitzsimmons had been forced to leave his job as an assembly-plant quality monitor, which requires heavy lifting. By May, medical tests had confirmed a diagnosis of intestinal cancer. And by July 2016, his workplace disability benefits had kicked in, providing a monthly income that Fitzsimmons said was just under $2,000.

But in March 2018 Fitzsimmons was informed his benefits would be terminated as of July of that year, even while he was still undergoing daily chemotherapy treatment.

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In correspondence reviewed by Global News, Manulife, the group disability insurance provider at Fitzsimmons’ workplace, said he no longer qualified for the benefit because his illness did not prevent him from performing less physically strenuous jobs, like data-entry clerk or information services representative, that he might be able to get with his professional and educational background.

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The termination of benefits left Fitzsimmons with only around $1,000 in monthly income from his Canada Pension Plan disability benefit, a situation he described as being under financial “house arrest.”

“I can’t go anywhere. I literally have to plan every move that I make because that’s how impoverished I’m living right now,” he told Global News.

Manulife rejected two appeals by Fitzsimmons in which he provided additional evidence to sustain his claim that severe side effects from the chemo treatments rendered him unable to work. The documents included a letter from his oncologist at Toronto’s Mt. Sinai Hospital, which described “severe” symptoms including nausea; dizziness; fatigue; sharp, shooting abdominal pains; loose and irritable bowels and headaches, among others.

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Due to those side effects, Fitzsimmons was “unable to (perform) any kind labour of any kind,” the letter reads (emphasis in the original document).

In a document citing that letter, Manulife wrote that its own medical consultant had advised that Fitzsimmons may be able to achieve some degree of symptom relief with drugs like Gravol, Imodium or Nabilone.

But doctors never told him to take such over-the-counter medications, Fitzsimmons’ lawyer, Nainesh Kotak, told Global News.

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In March, shortly after receiving his second appeal denial, Fitzsimmons hired Kotak and filed a lawsuit against Manulife with the Ontario Superior Court of Justice.

On May 9, one day after Global News contacted the company about the case, Manulife said it would reinstate his disability benefits dating back to March 2018, according to Kotak.

“We are very empathetic to Mr. Fitzsimmons’ situation and are sorry for what he has experienced,” Manulife said in an emailed statement to Global News.

“We strive to do everything within our power to satisfy our customers and were already in the process of reviewing and responding to this complex matter. We have been in contact with Mr. Fitzsimmons’ lawyer to work on this together,” the company also said.

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Group disability benefits and the critical two-year mark

Fitzsimmons’ story highlights a common issue with workplace disability benefits, Kotak said, speaking before Manulife announced the resumption of benefits.

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Often, eligibility for group disability benefits is subject to two tests. The first, which is administered when the worker first claims disability, is aimed at verifying whether she or he has become unable to perform her or his regular job, something known as “regular-occupation test” or “own-occupation test.”

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But after a period of time, usually two to five years, the criteria for eligibility become more stringent. Workers are only allowed to maintain their benefits if they are deemed unable to perform any job for which they may be qualified given their skills and experience, something called “any-occupation test.”

The second test is the one Fitzsimmons failed, despite the fact that he’d been approved for CPP disability, which the government defines as a benefit available to contributors who “are disabled and cannot work at any job on a regular basis.”

In correspondence with Fitzsimmons, Manulife said eligibility for his group disability benefits beyond the two-year mark was restricted to those unable to perform “any occupation for which the employee is qualified or may be reasonably become qualified by training, education or experience.”

The insurer acknowledged that Fitzsimmons had started to receive CPP disability benefits but told him that “CPP requirements for eligibility differ from the contractual provisions of your group policy.”

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While Fitzsimmons’ case “raises eyebrows,” the any-occupation test is a common reason why workers lose their employer disability benefits, Kotak said.

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How private disability coverage can supplement group benefits

The need to supplement work disability benefits with private insurance is becoming an increasingly important issue, not just due to the dreaded two-year mark but also because employers, under pressure to cut costs, are becoming less and less generous with their group disabilities policies, according to personal finance expert Preet Banerjee.

A couple of decades ago, Banerjee said, it was standard for companies to offer disability coverage until age 65. Today, he added, it’s more common to see the maximum length of this benefit limited to much shorter periods, like 10 or five years.

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Employees, Banerjee said, aren’t always aware of this.

“They’ll just say: ‘Oh, do they offer disability coverage or not?’ And they don’t really take a look at what is the nature of that coverage,” he told Global News.

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Individual policies can be pricey, but they’re usually well worth the money, Banerjee argues. People, he noted, are much more likely to become at least temporarily disabled during their working lives than they are of dying prematurely.

According to Statistics Canada, working-age Canadians have a one-in-three chance of developing a disability that will last for more than three months.

And disability coverage could amount to a lot of money for someone who becomes disabled right at the beginning of their working life, Banerjee noted.

“Multiply (your annual income) for by a 40-year career, and you’re looking at millions of dollars,” he said.

But precisely because the chance of disability and the potential payouts tend to be high, private disability insurance is pricey.

For example, a 30-year old female non-smoker making $65,000 working in HR may pay something like $120 a month for a private LTD plan that kicks in after 90 days and pays out $3,500 a month, or 65 per cent of employment income, according to a quote provided to Global News by Lorne Marr, director of business development at LSM Insurance, an independent life insurance broker.

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What to look for in a disability insurance policy

When advising clients about disability insurance, financial adviser Liz Schieck recommends clients choose regular- or own-occupation versus any-occupation as an eligibility criterion, as well as partial-disability as opposed to just total-disability coverage.

If you’re going to pay for it, you might as well choose a policy that’s more likely to actually result in a payout, she reckons.

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Regular-occupation coverage usually means you’ll be deemed eligible to receive payments if you can’t work in the job you had when you became disabled. Own-occupation coverage is even more generous and will pay out the full benefit even if your disability allows you to work in a different position. Banerjee offered the example of a surgeon who injured his hands. With own-occupation coverage, the doctor would be able to continue to receive 100 per cent of the payments even if she or he started, say, teaching at university.

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Own-occupation coverage, which is more expensive, usually makes sense for high earners and people working in jobs that require very specific and not easily transferable skills, Schieck said.

Partial-disability coverage, on the other hand, guarantees that you’ll get some money, usually up to 50 per cent of the benefit, even if you are still able to perform some of your professional duties.

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How to get private LTD insurance without breaking the bank

For Canadians with work disability benefits, one way to keep costs in check is to choose an individual policy that will only take effect when the criteria for workplace coverage switch to the more stringent any-occupation test, Banerjee said.

For example, take the woman in our earlier scenario — let’s call her Susie. Her monthly premium would decrease to $97 if she changed her so-called elimination period from 90 days to two years, according to Marr.

If that was still too much for Susie, she could further lower her monthly premium by reducing the amount of her benefit from 65 per cent of her pay to 50 per cent. That would bring the monthly cost of her policy down to $77 a month.

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Of course, the catch is that Susie’s full benefit would also shrink from $3,500 to around $2,700 a month. But that isn’t as bad it may seem, Marr noted. The benefits aren’t subject to tax so a benefit that covers 65 per cent of gross salary will come quite close to someone’s after-tax income. A 50 per cent payout means Susie would get a bit less than that but still more than half of her take-home pay.

Banerjee recommended trimming back the payout amount rather than limiting the length of the coverage to anything less than the time you turn 65. And Schieck said a lower payout is also preferable to choosing stricter policies that apply the any-occupation or total-disability tests.

As for Fitzsimmons, he had actually taken a good look at his workplace disability benefits well before he had an inkling that he had cancer, he told Global News.

He remembers seeing that the policy would cover him until age 65 but does not recall reading about the eligibility criteria changing at the two-year mark.

His hope is that his story will serve to help other people.