Disability Insurance: Understanding “Own Occupation” Coverage
Disability insurance provides a vital safety net for professionals and other individuals who have invested substantial resources into building a career. This insurance is designed to provide funds to support the family if the policyholder is unable to work due to a physical or mental disability.
Unfortunately, many policyholders discover too late that their safety net is full of holes. The problem, in many cases, is that the insurance claimant thought they had purchased a policy that provided “own occupation” coverage, but the insurance company interpreted the terms entirely differently. Sometimes the discrepancy occurs because the policyholder didn’t understand the terms; other times, the insurance company acts in bad faith in its interpretation.
At Ver Ploeg & Marino, we’ve been resolving complex insurance disputes for decades, so we know how challenging it can be to understand the scope of coverage in a disability insurance policy. It is vital for policyholders to be aware of their policies’ limitations, but it is also important to step up and take action when an insurer wrongfully denies or devalues a legitimate claim. Here are some critical issues to consider regarding own occupation coverage in disability insurance.
“Own Occupation” vs. “Any Occupation”
One or two words can have a tremendous impact on the scope of coverage provided by an insurance policy, particularly when it comes to long-term disability policies. When you hold a policy that provides “own occupation” coverage, it is supposed to provide benefits if a covered disability prevents you from performing the material tasks of your current job or the profession you’ve trained for. By contrast, if you have a policy that provides “any occupation” coverage, you are only eligible to receive benefits if a disabling condition prevents you from working at any type of gainful employment.
The difference is tremendous, particularly for professionals who practice highly skilled disciplines and earn substantial wages. If you are a dentist with a degenerative condition in the cervical spine or arthritis in the hands that prevents you from being able to perform dental procedures on patients, you’ve just lost the major source of income for your practice and your personal support. An “own occupation” policy should provide funds to make up for that lost income once you’ve presented medical evidence of your disability and its effect on your abilities.
But if the insurance company insists the policy only provides benefits if you’re unable to practice “any occupation,” then you might not be able to receive payments under the policy unless you’ve been able to present evidence to show that you’re not capable of working in a call center or as a greeter at a big box store or any other potential job in the area. The difference is obviously quite substantial.
Examine Policy Language Closely
Many people read marketing materials closely when considering insurance policies, including disability coverage policies. That’s understandable, because that’s what the insurance company provides, and the marketing materials are written in language that appears to be straightforward. Unfortunately, that language can make a policy seem to provide “own occupation” coverage when it does not. What matters is not what is implied in the marketing description but what is spelled out in the actual insurance policy.
Insurance policies are written in a quasi-legal, jargon-filled insurance dialect that is scarcely recognizable as English. Many of the terms have industry-specific meanings that are fully comprehensible only to professionals who have worked extensively in insurance. When you delve deep into the policy terms, the description of when a policyholder qualifies for benefits might be written in such a way that if the policyholder can perform any of the aspects of the most recent occupation, then they do not qualify for benefits. For instance, if a surgeon who spends 5% of their work time filling out medical forms can handle paperwork but not other aspects of the job, the insurance company might insist that the surgeon is still able to practice the occupation.
Hybrid Policies
When a policy provides genuine “own occupation” coverage, it is important to be aware of any limitations or transitions in the policy terms. The policy might provide benefits for a set period if the policyholder is unable to practice their occupation, and after that period expires, the coverage reverts to “any occupation” terms. To continue receiving benefits, the policyholder must demonstrate that they are unable to engage in any gainful employment.
Tactics Insurance Companies Use to Deny Benefits
Regardless of policy terms, insurance companies frequently deny disability insurance claims, particularly for professionals and others with extensive work experience. As noted above, they will often argue that many aspects of work can still be performed, even if those arguments are illogical. If a professional cannot perform the income-generating tasks, then being able to handle the billing paperwork for those services is completely irrelevant. But logic is often not part of the equation, particularly when insurance companies rely on AI analysis to evaluate claims.
In some cases, insurance companies will have a physician review a disability claim based solely on limited records, without conducting a physical examination of the policyholder’s condition. Or the physician may conduct an exam under instructions to only look for evidence to support the insurance company’s desired prognosis.
The bottom line is that insurance companies operate for profit, and they earn more when they pay out as little as possible. They will always be looking for ways to deny claims, and policyholders who want to receive the benefits they deserve under their policies have no choice but to fight back with legal arguments.
Ver Ploeg & Marino Knows How to Ensure that Disability Insurers Honor Their Obligations
Our law firm focuses entirely on resolving insurance disputes. Although we always represent policyholders, we used to work for insurance companies, so we know how they operate and which arguments are most effective in overcoming their tactics.
In our decades of practice, we’ve seen that sometimes policyholders are mistaken about their policies, and sometimes, they’re absolutely correct, and it is the insurance company that is wrong. We work to achieve beneficial results for policyholders effectively and efficiently. If you have concerns about your disability insurance coverage, we invite you to schedule a consultation with our team to learn about the assistance we may be able to provide in your situation.
Share
