The Importance of Understanding Policy Definitions: A Case Study
We’ve discussed before the importance of timelines and reading your policy carefully. This holds true when looking at whether you will be eligible to receive lifetime benefits should you become disabled.
One example of this is the case of Shields v. Provident Life and Accident Ins. Co.[1] (Unum). Dr. Shields was a gastroenterologist who developed health issues including headaches, cervical spine pain, numbness, and spinal stenosis. She became partially disabled on June 1, 2017 and then totally disabled on October 9, 2017. Because Dr. Shields reached age 60 on June 4, 2017, Unum found that she was only eligible for benefits until age 65 (versus lifetime benefits) because she had become totally disabled after she reached the policy-defined age of 60.
“Age”, under the policy, was defined as “the ending date of the policy term in which you attain that age.” Part of what was at issue in this case was what the “policy term” was. Unum argued that it was August 31, 2017, because Dr. Shields paid her premiums on a quarterly basis. Dr. Shields argued that the end-date of the policy was actually December 1, 2017, making her 59 at the time of disability and eligible for lifetime benefits, because she understood “renewal premium” to mean the renewal term of the policy schedule (which was 12 months). At issue here were of several different terms in the policy, including not just “age”, but “policy term”, “renewal premium”, “renewal term” and “premium term”.
As part of the case, Dr. Shields deposed several Unum employees, who actually gave conflicting testimonies that showed the policy was ambiguous when it came to determining Dr. Shield’s age at the time she became totally disabled. In its decision, the court explained that, under Arizona law, ambiguities in an insurance contract will be construed against the insurer, and they found in favor of Dr. Shields.
This case highlights the importance of carefully reading your policy. If you have questions about the timeline of your policy, please feel free to reach out to one of our attorneys directly.
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 not evaluating your claim under the proper standard, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.
[1] Shields v. Provident Life & Accident Ins. Co., No. 1 CA-CV 22-0057, 2022 WL 17164180 (Ariz. Ct. App. Nov. 22, 2022)
