Long term disability insurance policies are designed to help you financially when you are injured or out of work due to illness. If you are self-employed, you will purchase your long-term disability policy from a broker or an agent. However, the majority of the workforce is a part of a group policy provided through their employer. Group policies provided by employers are tied to that employer, so do not quit your job if you become disabled – you will lose your benefits.
Whether you get your long-term disability coverage through your employer or a broker, the policy is designed to help you if you become disabled and can no longer perform your essential job duties. Unfortunately, this is the only thing that insurance policies have in common. Individual or group insurance policies will defer on the definition of disability, how they define job responsibilities and payout limits.
Insurance companies will define your essential job duties differently, so this is the first roadblock you will face when it comes to getting your claim approved. Your long term disability policy will usually define how they perceive your occupational duties. The categories are:
- Modified own occupation coverage – duties that are performed in the regular national economy.
- True own occupation – duties as you perform not related to how others perform them.
- Any occupation– any occupation by which you can be trained and suited for.
These categories will determine what type of benefit coverage you will receive and for how long. Many own occupation long term disability policies will switch to any occupation after a certain number of months.
The differences between own occupation and any occupation can be technical and confusing. The insurance company will do whatever they can to muddy the waters and make claims harder to file to avoid payouts. In this article, we will break down the differences between “own occupation” and “any occupation.”
Own occupation refers to your specific occupation and your essential duties of that occupation. Let’s take the occupation of a heart surgeon, for example. You are not just a doctor; you are a surgeon with a specialty in cardiovascular surgery. To file a successful own occupation claim, you must be unable to perform the material and substantial duties of your particular subspecialty to qualify for “total disability.” This doesn’t mean that you are completely helpless; you just cannot go back to work and perform the same job as before.
Let’s presume that your disability is that you’ve developed a tremor in your hands. As such, you cannot hold a scalpel to perform delicate heart surgeries. Let’s further presume that you still have the ability to perform general consultations with heart patients. You may be able to perform the basic duties of a general cardiologist – and on a full-time basis, but you cannot perform heart surgeries.
Own occupation does not focus on your ability to perform some of the duties that you have as part of your job, but instead focuses on the most essential part of your “own occupation.” If our heart surgeon in the example above had an “own occupation” policy, the doctor would likely qualify for disability benefits. If the heart surgeon only defined his or her “own occupation” as a “cardiologist”, then he or she may have a more difficult time qualifying for disability.
Modified Own Occupation Coverage
This is the most common type covered by long-term disability policies. Under the modified own occupation, you are only entitled to benefits if you are working an occupation that is performed by the national economy. So what does that mean? Here is an example. John works for a small rural school district as a teacher. Because his school is so small, it’s his job to direct bus and parent traffic every day. Most school districts have safety officers that handle this duty, so what he is doing is out of the norm of the national economy. If John were to become injured and wheelchair-bound, he would still be considered able to perform his essential duties, which is teaching. This is why the national economy standard is not a good policy practice, but it’s still widely used by insurance companies.
True Own Occupation Coverage – A Must For Physicians
Most specialized fields, like surgeons and attorneys, carry what is called true own-occupation coverage. This means that if they become disabled, they have a much better chance of having a successful claim. For example, Robert is the only specialist within 100 miles that can perform a lung biopsy on patients with COPD when the area of concern is in the front left lobe. His calendar is always full because he is the only one capable of successfully performing this procedure without endangering the patients’ life. Robert is involved in a car accident that has severely damaged his hands. He will not be able to perform this procedure safely and will most likely qualify for benefits.
It would be our advice to any physicians, attorneys, or other specialists to make sure your policy states “true own occupation” in the coverage outline. With true own occupation coverage, you would be saving yourself the headache of fighting with the insurance company and having a reasonable expectation that your claim will be paid due to a major disability.
Other occupations that may be evaluated based on the specific duties and responsibilities of that occupation include:
- Business Operations Manager
- Financial Advisor
- Financial Manager
- IT Manager
- Marketing Manager
- Medical and Health Services Manager
- Nurse Anesthetist
- Petroleum Engineer
- Physician, including
- Emergency Room Physician
- Family Medicine Doctor
- Obstetrician and Gynecologist
- Oral and Maxillofacial Surgeon
- Orthopedic Surgeon
- Pain Management Physician
- Political Scientist
- Sales Manager
Any occupation refers to being able to find gainful employment that is suited for your work experience and education level. Claims that are filed under any occupation are examined to determine your level of employability. The insurance company will look to see if you can work in virtually any capacity with accommodations in your previous field of work and use this to deny your claim. Even if you cannot perform your prior work, the insurance company will review your medical records and work with a job expert to determine whether there are other occupations that you may be able to perform. Any occupation has the broadest implications for claimants. Any occupation is a way that the insurance company tries to deny your claim by proving you can still work even if the position is not appropriate.
An example, Margo is a full-time CPA, and she recently suffered a brain aneurysm, which has severely affected her ability to calculate figures and think critically. The insurance company has that Margo could still work as a receptionist; however, her qualifications and income as a CPA far exceed that of a receptionist. If Margo is denied, she should consult an attorney to help her create a solid appeal.
You will see the term gainful employment many times in a claim under any occupation. A typical definition of “gainful occupation” is: “an occupation, including self-employment, that is or can be expected to provide you with an income equal to at least 60% of your indexed pre-disability monthly earnings.” This definition means that your claim will only be approved if the insurance company fails to prove that you can earn at least 60% of your salary by working.
Let’s take a kindergarten teacher, for example. A grade school teacher has to be on her feet, educating small children. She walks with them all day to the bathroom, recess, gym, lunchroom, etc. Now let’s say that our teacher has peripheral neuropathy, which requires the teacher to stay off her feet the vast majority of the day. In fact, the teacher has to periodically elevate her legs throughout the day. Under an “own occupation” disability policy, she may qualify for disability. But under an “any occupation” disability policy she may still the work capacity to earn 60% of her salary working as an administrator, like a vice principal. She will no longer have the full responsibilities of a full-time classroom teacher, but still has the skills to sit behind a desk and work in the field of education of young children.
Under most disability policies, the “Any Occupation” definition does not kick in until after benefits have been paid for 2 years, or 24 months. Once disability benefits have been payable for 24 months, the insured is considered disabled only if he or she meets the “Any Occupation” definition. Life Insurance Company of North America, or LINA, has such an “Any Occ” provision in some (or most) of its policies. Under this standard, an insured is disabled if “after Disability Benefits have been payable for 24 months, he or she is unable to perform the material duties of any occupation for which he or she may reasonably become qualified based on education, training or experience which provides him or her with substantially the same earning capacity as his or her former earning capacity prior to the start of his or her disability.”
This standard is somewhat similar to the standard Social Security uses in disability claims and generally requires a greater degree of impairment to continue benefits. This type of modified occupation language after a set period is called a Change in Definition feature (“CID”). Most policies have a 24 month period, but others may have a 12, 36 or 48 months period before the change to “any occupation.” The impact of the CID is to require a greater severity of disability to remain disabled and eligible for benefits after the “own occupation” period. Benefits will only continue if the insured satisfies the “any occupation” definition of disability follows the “own occupation” period. Because there is a change in terminology, this is naturally a point where many insurance companies terminate, or cease payment of, benefits. If you have received notification that your benefits are to cease or be terminated, you should contact The Ortiz Law Firm to assist you in appealing the decision.
Who Has the Burden of Proof?
Proving that you cannot work or that a job is not suitable for your skills will be your responsibility. Using a disability attorney can help with this, but the first thing to do when applying for long term disability is to read your policy thoroughly. If you have a group policy through your employer, you can request a copy from your human resources department.
After you read your policy, you can decide if you think you have a case for LTD benefits. When you start gathering information for your claim, be sure to include all the necessary information that will “stack” your administrative file. Your administrative file is everything in your case. It includes all the correspondence between you and your insurance company, all your medical information, notes from your doctors, and even surveillance footage. Check out our article on elements that can harm your claim before you get started.
Who Decides Whether I Can Work Any Occupation?
Insurance companies will use vocational experts to help prove that you still have employment options out there. A vocational expert is a person who has expertise in the labor market and often has experience placing disabled people in new positions of employment. They rely heavily on data resources like labor statistics and employer surveys (which are very subjective). A vocational expert’s testimony is valuable, and the decision to approve or deny a claim will be in the hands of the claims administrator at the insurance company.
Obtaining the Assistance of an Experienced Disability Attorney
Using an experienced disability attorney will help you build a strong case for an appeal. For example, your disability attorney may retain his or her own vocational expert to counter the insurance company’s vocational expert opinions. If your claim is denied, it is good to have this evidence in your administrative file for an appeal.
The differences in “own occupation” and “any occupation” can be tricky. The goal of the insurance company is to pay out as little as possible. An experienced disability attorney can help you navigate your way to a successful claim.
Disability attorneys at our firm do not get compensated unless you do. If you would like to have a free consultation, contact the Ortiz Disability Law Firm. The initial consultation call is entirely free, and you are under no obligation to use our firm. We are happy to answer any questions you may have. Give us a call at (866) 853-4512.