Legal v. Factual Disability:
A Case Study

Disability insurance insurers often make the distinction between factual and legal disability when evaluating professional’s disability claims.

Factual disability refers to the inability to practice caused by an injury or illness that prevents an individual from practicing in their occupation. Legal disability refers to circumstances where an individual is not legally permitted to continue to practice.  One example of this would be the suspension of a professional license.

Most policies exclude coverage in situations involving the revocation or loss of a license to practice. But what happens if you are both legally and factually disabled—would you still be able to collect on your policy?

One case that examined this very scenario is that of Pogue v. Principal.[1] In his claim for disability benefits with Principal, Dr. Pogue, a physician, indicated that he suffered a nervous breakdown on November 9, 2012 as well as anxiety, and a few other medical issues that prevented him from continuing to practice medicine.

Principal denied Dr. Pogue’s claim, stating that the policy specifically excluded “benefit for any Injury or Sickness which in whole or in part is caused by, contributed to by, or which results from the suspension, revocation, or surrender of [an insured’s] professional or occupational license or certification.”  Principal asserted Dr. Pogue was legally, not factually, disabled because the Tennessee Board of Medical Examiners had suspended Dr. Pogue’s medical license in November 2012.

In its denial letter, Principal acknowledged that Dr. Pogue had documented medical concerns prior to his license suspension, but claimed that it was not until he knew there was an ongoing investigation (that went on to result in the suspension of his medical license) that he actually stopped working.  Dr. Pogue attempted to argue that his license suspension was a voluntary surrender that he agreed to as part of his treatment plan, instead of a cause or contributing factor to his mental condition. However, the Court ultimately sided with Principal.

This case emphasizes the importance of knowing when you are unable to practice due to a physical or mental disability, and not pushing yourself past the point where it is unsafe to practice.  If you feel you might need to file a disability claim, please feel free to contact our attorneys directly to set up a consult.

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

[1] Pogue v. Principal Life Ins. Co., No. 3:14-CV-599-CHB, 2021 WL 3354605 (W.D. Ky. Aug. 2, 2021)


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