Watch Out for “Work” Provisions

In a previous post, we discussed the importance of how your policy defines the key term “total disability,” and provides several examples of “total disability” definitions.  The definition of “total disability” in your policy can be good, bad, or somewhere in-between when it comes to collecting your benefits.

Policies with “true own occupation” provisions are ideal.  Here’s an example of a “true own occupation” provision:

Under this type of provision, you are “totally disabled” if you can’t work in your occupation (for example, you can no longer perform dentistry).  This means that you can still work in a different field and receive your benefits under this type of policy.

Insurance companies often try to make other policies look like true own occupation policies, and include phrases like “own occupation” or “your occupation,” but then tack on additional qualifiers to create more restrictive policies.

One common example of a restriction you should watch out for is a “no work” provision.  Although these provisions can contain the phrase “your occupation” they only pay total disability benefits if you are not working in any occupation.  Here’s an example from an actual policy:

As you can see, under this type of provision, you cannot work in another field and still receive benefits.  This can be problematic if you do not have sufficient disability coverage to meet all of your monthly expenses, as you’re not able to work to supplement your income.

A “no work” provision is something that is relatively easy to recognize and catch, if you read your policy carefully.  Recently, we have come across a definition of “total disability” that is not so easy to spot, but can dramatically impact you ability to collect benefits.  Here’s an example, taken from a 2015 MassMutual policy:

At first glance, this looks like a standard “own-occupation” provision—in fact, it is entitled “Own Occupation Rider.”  But if you take the time to read it more closely, you’ll notice that the second bullet point requires you to be working in another occupation in order to receive “total disability” benefits.

Obviously, this is not a policy you want.  If you have a severely disabling condition, it may prevent you from working in any occupation, placing you in the unfortunate position of being unable to collect your benefits, even though you are clearly disabled and unable to work in any capacity.  Additionally, many professionals have limited training or work history outside their profession, so it can be difficult for them to find alternative employment or transition into another field—particularly later in life.

These “work” provisions appear to be a relatively new phenomenon, and are becoming increasingly more common in the newer policies being issued by insurance companies.  It is crucial that you watch out for these “work” provisions and make sure to read both the policies definition of “own-occupation” and “total disability.”  While many plans contain the phrase “own-occupation”, including this example, they often aren’t true own-occupation policies and you shouldn’t rely on an insurance agent to disclose this information.  Oftentimes, your agent may not even realize all of the ramifications of the language and definitions in the policy that they are selling to you.

Lastly, you’ll also note that this particular provision was not included in the standard “definitions” section of the policy, but was instead attached to the policy as a “rider,” making it even harder to spot.  It’s important to remember that many definitions and provisions that limit coverage are contained in riders, which typically appear at the end of your policy.  Remember, you should read any policy from start to finish before purchasing.

Disability Claims in Today’s Economy

Filing a private disability insurance claim in this economy can be daunting. Insurers now have more incentive than ever to deny payment of “high-end” claims, like those filed by medical, dental or other professionals. However, a few guidelines can help you protect your benefits in these difficult times.

1. Understand Why Insurance Companies Feel Pressure to Deny Claims

Disability claims filed by physicians, dentists, and other professionals can be expensive for insurance companies to accept. The troubled economy and the rising number of disability claims filed by professionals have led to financial hardship for the disability industry. This strain on resources creates an incentive for insurers to deny these expensive claims. Thus, many insurers closely scrutinize the terms of professionals’ policies in order to find ways to deny benefits, as the long-term financial benefit to the insurance company is significant.

2. Know Some Basic Policy Terms

An “own-occupation” policy provides compensation following a disability that prevents the insured from performing the particular duties of his or her occupation. If an insured professional does not have an “own-occupation” policy but an “any occupation” policy, he or she must be disabled from performing the duties of any occupation for which he or she is reasonably qualified in order to receive benefits. Some policies are a hybrid, providing own-occupation benefits for a limited period of time, then converting coverage to the “any occupation” standard.

3. Contact an Attorney Well-Before You File Your Claim

Those who are considering filing a claim for disability insurance benefits should meet with an attorney experienced in the area well-before submitting a claim for payment. Each disability policy has different, complex language that insurance companies may manipulate to circumscribe and restrict coverage. Insureds should make a coordinated effort with the assistance of a lawyer to determine whether their particular claim is covered and, if so, how that claim is best presented to ensure payment.

4. Select the Right Firm to Represent You

Look for a firm that can help from the beginning of the process by analyzing complex applications and policies and identifying potential coverage issues. The best firms have particular skill in documenting claims, completing claim forms and communicating with treating physicians. Once the claims process begins, a firm should be able to protect clients against unreasonable delays and abuse by the insurer. You should also seek a firm that provides knowledgeable advice and practical guidance on how to best handle an Independent Medical Examination or other testing that may be required by an insurance carrier.

Though filing a disability insurance claim in a recession can be overwhelming, the challenges involved are not insurmountable. By following the guidelines above and enlisting the help of a qualified attorney, you can protect your future in any economy.

A Disability Insurance Q-and-A

Phoenix and Tucson-area disability attorney Ed Comitz recently responded to some common disability insurance questions  for the Pima County Medical Society’s January 2010 issue of Sombrero. He answers questions doctors and other healthcare professionals often ask,  such as, “What is the difference between ‘own occupation’ and ‘any occupation’ in disability insurance?” and “Why do so many doctors’ claims get denied, and how can a law firm help?”