Disability Insurance Claim Advice
Partial Disability or Total Disability?
Disabled World, January 2012
By Art Fries
One may think that from a medical symptoms standpoint they are PARTIALLY disabled but from a definition standpoint they may be TOTALLY disabled.
There are also many variations of definitions in disability contracts. This article will focus on INDIVIDUAL disability policies as well as group (employer-employee relationship) and association group (where members may be of the same profession). A question and answer format will apply:
Will I Be Disabled Under A Total Disability Definition In Each Of The Following Scenarios? In All Cases A Sickness Or Accident Must Occur.
Not Able To Perform The Substantial And Material Duties Of Your Occupation.
Your occupation means what you were doing prior to going on claim, not what you did a year ago, 2 years or 5 years ago. If you were a dentist with cervical or low back issues or bi-lateral carpal tunnel syndrome or any combination of these medical symptoms, you would be totally disabled if you could not work as a dentist. This, of course, ALWAYS assumes that if you work at ANOTHER occupation it meets the "smell test" and you are not in conflict with your symptoms. Thus a dentist with carpal tunnel and cervical symptoms working at a new job sitting in front of a computer on a daily basis would NOT meet the smell test and would be in conflict with their symptoms (leaning forward and excessive use of hands).
Same Wording As Above But With Additional Wording That States: And Not Working In Another Occupation.
With most insurance companies, IF you have a partial (residual) wording in your policy and typically you have at least a 20% loss of earnings, the insurance company will treat this as a PARTIAL CLAIM and not a total claim. IF you do NOT have a PARTIAL wording you will NOT be paid anything.
For The First 2 Years Not Able To Perform The Substantial And Material Duties Of Your Occupation. Thereafter Unable To Perform The Duties Of Any Occupation For Which You May Be Eligible Based On Education, Training Or Experience.
After 2 years the insurance company takes a second look at you. In many situations you may not be able to do your PRIOR JOB but your symptoms do not prevent you from working at a DIFFERENT JOB. In this case benefits will cease. Sometimes there is a variation of the above in which it states that after 2 years the definition is the SAME but also states that the ANY job must be one in which you have the potential to earn at least 60% of your prior earnings. Thus a surgeon earning $400,000 a year being able to work as a professor of surgery after 2 years and earning $80,000 per year would still be able to collect 100% of the monthly benefit.
Not Able To Perform The Substantial And Material Duties For The Benefit Period Stated On The Declaration Page (to Age 65) In Your Occupation. A Lifetime Benefit Also Applies Which May Have Been Added By Amendment (rider) But At Which Point The Wording Changes To Include The Your Occupation Definition But Also Says... And Not Working In Any Other Occupation.
In this situation YOU have the choice to work or not work. IF you choose to work past age 65 benefits will cease. If you do not work at another job benefits will continue.
Will I Be Disabled Under A Partial Disability Definition In Each Of The Following Scenarios? In All Cases A Sickness Or Accident Must Occur.
You Have Both A Partial And Total Disability Definition For Your Occupation. In This Example You Are A Trial Attorney With A Low Back Problem. You Have A 7-day Trial Approaching. You See The Judge Beforehand And Tell Him That Because Of Your Low Back Issue You Can Only Attend The Trial In The Mornings Because By One O'clock In The Afternoon Your Pain Threshold Will Have Increased Whereby You Have To Take Medication (vicodin, Percocet, Etc.) In Amounts That Will Affect Your Focus. Therefore, You Will Not Be Able To Attend The Trial In The Afternoon And They Can Close The Court For That Period Of Time. This, Of Course, Will Be Unacceptable To The Judge And Will Request That The Attorney Be There For The Entire Day Or Get A Replacement Attorney.
In this example it could go either way. In the State of California, court precedent indicates that in addition to the policy language you must also be able to perform your occupation (or IF an ANY occupation definition) in the Usual and Customary way with the same degree of continuity. In the case of the attorney not being able to work in the afternoon, that could fall into the ADDED court precedent language.
Policy Says You Must Have Either A Loss Of Time Or A Loss Of 1 or More Duties In Addition To A 20% Loss Of Earnings.
In this case EITHER will get you into a PARTIAL claim. Sometimes there is N0 requirement for a loss of time or earnings and just a 20% loss of earnings. In other cases the wording indicates not being able to work AS EFFECTIVELY or loss of 1 or more duties. Other times it says ONLY a 20% loss of time. And sometimes it says that the loss of time or 1 or more duties only applies during the waiting period (Ex: 90 days) and not thereafter.
There are still further variations of the above and many disability policies restrict further the amount of the monthly benefit by placing additional contractual language in the policy such as:
1. An earnings clause
2. A Relation to Earnings Clause
3. An Offset provision(s)
4. Indicating that PARTIAL DISABILITY includes YOUR occupation as well as working in ANY occupation
5. A maximum amount payable for mental symptoms or self reported symptoms (sometimes per claim and sometimes as a policy aggregate).
6. A fraud clause
7. Many other clauses too numerous to mention
It cannot be emphasized too strongly the advice required when contemplating the submission of a disability claim. Knowing the meaning of words in the policy can determine how you "act in life" to pursue the highest possible benefit from your disability policy(s).