"Own occupation" in disability insurance claims
By Mark F. Seltzer, Esq.
Do you know your “own occupation”? Chances are you don’t! Sounds like a rather simple and straight forward question. But, when you bring a claim for benefits under your disability insurance policies, your company will redefine the “KISS” rule to be the ” rule: Keep It Complicated and Confusing.
“Own Occupation” policies were, and still are, the “Cadillac” policies (or “Mercedes” depending on your auto preference). They are the “creme de la creme;” and when it comes to individual disability income policies, they are the policies held by most physicians. The term is so basic to these policies that the definitions of both total disability and residual disability are predicated upon your ability to perform the material and substantial/important/essential duties of your “own occupation.” All you have to do, as a result of sickness or accident, is prove that you can’t perform some or all of those duties and your done, right?
Everything your disability insurance carrier does is financially-driven85and remember, they’re driving the car. The companies are now stuck with the same policies that they aggressively sold to physicians, as the “target market,” in the 80’s and 90’s. And, it won’t help to call the “BBB,” because to them, that means “Bad Block of Business.” They have developed sophisticated strategies employed in considering your claim, and they have become more aggressive with their claims practices, often to try to “find a way not to pay”…and if they have to pay, to reduce the benefit amount and/or duration of your claim. So, if they confuse and dilute the basis of the disability equation, “own occupation,” it obviously becomes harder to obligate them to pay. And that’s what it’s all about: diluting. Or is that “de-looting”?
So, I’ll ask you again, do you really know your “own occupation”? Now that I’ve gotten your attention, here are some important factors to consider.
Most Courts hold that your “own occupation” is determined at the time you become disabled, not at the time you applied for the policy. This actually does make a lot of sense since many physicians change specialties, or otherwise what they do professionally, during the course of their careers. So the first thing to remember is that the occupational component of your claim will be assessed at the onset of your disability. If you read the “specialty letter,” which you may have gotten along with your policy, this is probably what it really says.
All occupational duties will be considered by your company. This is really where the fun begins. You probably practice a recognized medical specialty (e.g., orthopaedic surgery, anesthesiology), but the company’s assessment doesn’t end there. First, what do you really do within your area of specialty? Do you only perform surgery or do you also have an office-based non-surgical practice? And, do you perform administrative duties for the practice? The company will look to services rendered, revenue raised, time spent, and patients seen, in their analysis. But it doesn’t end there, either.
All occupational situations will be considered by your company. Do you own the practice, or have an ownership stake; so, are you also an entrepreneur? Do you have additional professional responsibilities outside of your practice? Do you act as a medical director, chief of staff, pharmaceutical lecturer, legal or medical consultant, professor at the medical school, or a million other things that you well earned the right to do as a result of your accomplished career and reputation? All of these factors will be considered by your company as part of the occupational component of the claim.
Dual occupation/Residual disability defenses. If the company can show that you were engaging in two or more separate and distinct occupations, the policies and cases say that you have to show that you are totally disabled from all of your occupations to be entitled to total disability. That’s the occupational grand slam home run for the company. Raising the dual occupation defense may allow the company to deny liability all together, and not pay you a dime. But, even if they can’t show that your occupational activities rise to the level of a separate occupation, they may still try to show that those activities were really material and substantial to your “own occupation.” And, if they’re successful, they still hit a homer. Your company will first look at your after-disability “work” activities. It will then look to match the “occupational DNA” with your pre-disability “work” activities. If it’s a “match,” they can then work to elevate the importance and materiality of that activity so they can attempt to determine that you are residually or partially disabled, not totally disabled.
As you may or may not know, residual disability claims end at Age 65, even if you have a Life Policy. Of course, that’s not to mention they’ll likely reduce your monthly benefit, per the policy income and benefit calculations, or maybe not have to pay you at all if you don’t meet the income loss trigger, if your claim is handled on a residual basis. And, then again, there will be those monthly profit and loss statements and yearly tax returns that they’ll require. Baseball is some game, isn’t it? And they can’t wait for the season to begin.
“Own Occupation” in Long Term Disability claims. If you think the issue of “own occupation” in individual disability income claims is confusing, try LTD claims on for size. LTD policies often have stricter, more complicated policy language definitions and usually have limited “own occupation” benefit periods before imposing a broader “any occupation” disability definition. At that time, the company will look at your ability to perform the material and substantial duties of “any occupation” for which you are reasonably fitted, considering your education, training and experience. If that’s not grounds for a “rhubarb,” I don’t know what is.
Your disability insurance company has tremendous resources at its disposal used in evaluating your claim. They house a tremendous company “bullpen” of vocational consultants, accountants, claims specialists and medical professionals, which they will employ during the claims process who may help “relieve” the company of paying you money. You will always need to anticipate how any information you provide them will be considered in view of your occupational activities, and how it will impact your claim.
Conclusion. As I have told you many times before, you must know the terms of your policy and also be familiar with what encompasses your “own occupation” before you “engage” your disability insurance company. Remember, the company may try to re-engineer your policy, your “own occupation” and your claim. You must always anticipate any “curve balls” that they may throw at you during the claims process. In the words of the esteemed Phillies announcer, don’t let them hit it “outta here” with your claim.
Mark F. Seltzer, Esq., is the founder of the Law Firm of Mark F. Seltzer, P.C., representing physicians, health care practitioners and professionals in disability insurance claims and cases. The firm is located in Philadelphia, Pa.