Do I Have the Own Occupation Coverage I Think I Do? Part II
Our last post compared two policies with different “own occupation” riders. In this post, we are going to look at the NML “medical own occupation” rider in more detail, to further highlight how complicated “total disability” determinations can be under some disability policies.
Here’s the beginning of the rider again:
Total Disability or Totally Disabled. The words “Total Disability” or “Totally Disabled” mean the Insured is unable to perform the substantial and material duties of the Regular Occupation.
If the Insured can perform one or more of the substantial and material duties of the Regular Occupation, the Insured will be considered Totally Disabled if:
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- The Insured is not Gainfully Employed in an occupation;
- More than 50% of the Insured’s time in the Regular Occupation at the time Disability began was devoted to providing direct patient care and services; and
- The Insured is unable to perform the substantial and material duties which accounted for more than 50% of the Insured’s charges for direct patient care and services as evidenced by the Billing Codes for the 12 months before the Disability began.
If the Insured can perform one or more of the substantial and material duties of the Regular Occupation and is not considered Totally Disabled, the Insured may qualify as Partially Disabled.
This may already seem overly complicated, but the policy only gets more complicated when it comes to the next part of the rider that outlines how to calculate the benefits payable for total disability based on the above-enumerated parameters. Let’s take a look:
The Benefit payable for Total Disability is:
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- the Disability Income Full Benefit, if the Insured is Totally Disabled and not Gainfully Employed; or
- the Calculated Benefit, if the Insured is Totally Disabled and working in an occupation other than the Regular Occupation.
Calculated Benefit: If the Insured has no other Northwestern Mutual Individual Disability Income policies, the Calculated Benefit is the lesser of:
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- the Disability Income Full Benefit; or
- the Insured’s Loss of Earned Income.
If the Insured is covered under any other Northwestern Mutual Individual Disability Income policies, the Calculated Benefit is the lesser of:
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- the Disability Income Full Benefit; or
- the following equation: Eligible Benefit X Disability Income Full Benefit of the Policy/Transitional Coverage
Eligible Benefit means the Loss of Earned Income minus Non-Transitional Benefits.
Transitional Coverage means the sum of the Disability Income Full Benefits of all Northwestern Mutual Individual Disability Income policies, which cover the Insured, that include the Transitional Own Occupation Option or the Medical Own Occupation Option.
Non-Transitional Benefits means the sum of all the monthly benefits payable to the Owner under all Northwestern Mutual Individual Disability Income policies, which cover the Insured, that do not include the Transitional Own Occupation Option or the Medical Own Occupation Option.
If the Calculated Benefit is less than the Proportionate Benefit, then the Calculated Benefit is equal to the Proportionate Benefit, as set forth in the Partial Disability Benefit.
If the Loss of Earned Income is less than or equal to zero, then no benefit is payable under this Option. In no event will the amount payable be more than 100% of the Disability Income Full Benefit.
As you can see here, there are a myriad of paths/scenarios that go into calculating a benefit, including multiple paths to the physician’s claim being designated a Partial Disability claim. In this NML example, in order to determine total disability and whether a full benefit is received, a wide array of questions must be answered, including:
- Am I unable to do all my substantial and material duties, or just some of them?
- Am I gainfully employed?
- Was my time working spent doing 50% or more providing direct patient care and am I unable to do those associated duties?
- Am I actually just Partially Disabled if I can do one or more of my substantial duties?
- Am I working in another occupation?
- Do I have any other Northwestern Mutual policies and how much coverage do they provide?
- Do my other policies have Transitional Own Occupation or Medical Own Occupation riders?
- Have I had a loss of income?
In traditional, older true own occupation claims, the matter of determining total disability was relatively simple—i.e. can I work at all in my occupation? If the answer was no, the policyholder was entitled to their full benefit under the policy.
Here, even if you are physician and unable to practice, you may end up receiving less than a full benefit depending on the amount of patient care you were providing at the time of your disability, whether you are working in another occupation, and whether you have other coverage.
This is only one policy, but it is an example of why it is so important to understand how your policy works before you file a claim. If you are a physician and think you may need to file a disability insurance claim and have questions, please feel free to reach out to one of our attorneys directly.
Do I Have the Own Occupation Coverage I Think I Do? Part I
We’ve talked before about the importance of professionals choosing true own occupation policies that allow policyholders to be totally disabled and collect full benefits—even if they are working in another occupation.
That being said, if you are going to pay higher premiums for “own occupation” coverage, it is also important to ensure that you are actually receiving the benefit set-up you are looking for, and simply checking the box for “own occupation” is no longer enough.
As disability policies have evolved over time, some insurers have created “own occupation” riders that are specific to the medical field. However, in some instances these riders have become so hyper-technical and convoluted that you may be better off with something that is more simple, unless the framework in question is particularly relevant to your practice and field of medicine.
Let’s look at a few examples. Can you tell which excerpt below is from a “medical own occupation” rider?
GUARDIAN POLICY
Total Disability or Totally Disabled means that due to Injury or Sickness, You are no able to perform the material and substantial duties of Your Occupation.
Your will be Totally Disabled even if You are Gainfully Employed in another occupation so long as, solely due to Injury or Sickness, You are not able to work in Your Occupation.
NORTHWESTERN MUTUAL POLICY
Total Disability or Totally Disabled. The words “Total Disability” or “Totally Disabled” mean the Insured is unable to perform the substantial and material duties of the Regular Occupation.
If the Insured can perform one or more of the substantial and material duties of the Regular Occupation, the Insured will be considered Totally Disabled if:
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- The Insured is not Gainfully Employed in an occupation;
- More than 50% of the Insured’s time in the Regular Occupation at the time Disability began was devoted to providing direct patient care and services; and
- The Insured is unable to perform the substantial and material duties which accounted for more than 50% of the Insured’s charges for direct patient care and services as evidenced by the Billing Codes for the 12 months before the Disability began.
If the Insured can perform one or more of the substantial and material duties of the Regular Occupation and is not considered Totally Disabled, the Insured may qualify as Partially Disabled.
The answer is the Northwestern Mutual (NML) policy and the rider is an example of how policies marketed specifically to doctors can be more complicated than you might expect. Riders like the above are not unique to NML, and in fact Guardian itself has a variation of the above.
It is possible for physicians to collect under these riders, but the process has more steps and can cause problems for physicians who are expecting a straightforward disability claim and are not aware of the additional considerations that come into play with these riders.
Our next post will further delve into how definitions of total disability can be complicated under newer disability policies.
The Evolution of Disability Policies Part 7: Financial Examinations
In Part 7 of our series on how disability insurance policies have evolved, we’ll be taking a look at provisions related to financial examinations.
Most older policies give the company the right to request financial information from you, and say something along the lines of:
The Company may require proof, including income tax returns, of the amount of Earned Income for Periods before and after the start of disability.
Newer policies contain additional language that allow companies to be much more aggressive in what they can request, and can include provisions like:
We have the right, at our expense, to analyze or require an analysis of all relevant financial and operational records, including Your personal, business and corporate federal and state tax returns, as often as We may reasonably require by a financial examiner of Our choice. Such assessments may include analysis of business, financial, and operational records for any business in which You have or may have an ownership interest. We can require that Your accounting practices be the same as those which were in effect at the time You first became Disabled.
(emphasis added).
Further, many policies now have language that a claim can be denied or terminated if the requested audit of financial information is not provided. These provisions can be particularly onerous for professionals, who often have complex financial structures in place. And while, in certain instances, financial information may be relevant to a disability claim, these sorts of requests are sometimes used to engage in unwarranted fishing expeditions and/or as a tactic to delay making a claims decision. Consequently, it is important for professionals to approach requests for financial information in an informed manner.
Every claim is different, and these are just some examples of financial examination provisions taken from different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
The Evolution of Disability Policies Part 6: Definition of Occupation
In Part 6 of our series on how disability insurance policies have evolved, we’ll be taking a look at provisions related to the definition of occupation.
Many older individual disability insurance companies defined “occupation” in a short, relatively straightforward manner. For example:
Your occupation means the occupation you are engaged in immediately preceding the onset of disability.
Since the policy defines occupation as what you are doing immediately before your disability, determining your “occupation” for purposes of your claim requires an assessment of your job and duties at the time you became disabled. This can be a complex evaluation if you have multiple jobs/sources of income or you have changed your schedule/duties.
Newer policies contain additional language and hurdles that can make occupational determinations even more complicated. For example:
Regular Occupation means the occupation of the Insured at the time the insured becomes Disabled . . . . If the Insured is unemployed, retired, or not Gainfully Employed outside of the home for more than 15 hours a week at the start of Disability, the “Regular Occupation” of the Insured consists of the normal daily activities, including household duties, performed by the Insured at the time the Insured becomes Disabled.
This expanded provision could be especially problematic if, for example, you reduced your hours due to a disabling condition but did not file a claim.
Because the definition of “occupation” is so critical to how a disability claim proceeds, it is important for professionals to review their policies and understand how “occupation” is defined, especially before making any changes to work hours or job duties.
Every claim is different, and these are just some examples of how occupation is defined in different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
The Evolution of Disability Policies Part 5: Limitations
In Part 5 of our series on how disability insurance policies have evolved, we’ll be taking a look at provisions related to limitations on coverage.
Many older individual disability insurance companies contained exclusions or limitations on coverage relating to pre-existing conditions, but as time went on insurers also began to include additional limitations geared at a broader range of conditions, such as mental health, nervous conditions, and/or substance abuse. For example:
Limitations For Mental Disorder And/Or Substance-Related Or Addictive Disorder. For each separate Disability that is primarily due to a Mental Disorder and/or a Substance-Related or Addictive Disorder, benefits will not be provided for more than 24 monthly benefit periods. . . “Mental Disorder” includes, but is not limited to, any psychiatric, psychological, psychotic, emotional, somatic stress, behavioral or personality disorder.
While this exclusion is pretty broad-reaching by itself, newer policies have expanded the scope of limitations provisions even more, as the example below shows:
Limited Benefit Periods for Mental or Nervous Disorders. The Insurance Company will pay Disability Benefits on a limited basis during an Employee’s lifetime for a Disability caused by, or contributed to by, any one or more of the following conditions. Once 24 monthly Disability Benefits have been paid, no further benefits will be payable for any of the following conditions:
- Anxiety Disorders
- Delusional (paranoid) disorders
- Depressive disorders
- Eating disorders
- Mental illness
- Somatoform disorders (psychosomatic illness)
- Subjective Symptom Conditions
Subjective Symptom Conditions means any physical or mental or emotional symptom, feeling or condition which cannot be verified using tests, procedures or clinical examinations that conform to generally-accepted medical standards. Subjective Symptom Conditions Include, but are not limited to, headaches, pain, fatigue, stiffness, numbness, nausea, dizziness and ringing in ears.
(emphasis added).
This limitation provision is particularly broad, and has a catch-all for conditions based on symptoms that can’t be verified objectively, which can often be very difficult to do with certain disabling conditions. These provisions highlight the need to carefully review your policy applications to make sure you are getting the coverage you think you are, and the importance of reviewing existing policies to make note of any limitations on coverage you may face in the event you need to file a disability insurance claim.
Every claim is different, and these are just some examples of limitation provisions taken from different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
The Evolution of Disability Policies Part 4: Medical Examinations
In Part 4 of our series on how disability insurance policies have evolved, we’ll be taking a look at provisions related to medical examinations.
Older policies typically contain pretty basic and limited language regarding examinations. For example:
Physical Examination. The Company, at its own expense, may have the Insured examined as often as reasonably necessary in connection with a claim. This will be done by a physician of the Company’s choice.
Newer policies are much more expansive and typically list off a wide-range of examinations and testing that the company can employ. For example:
Independent Medical Examination. We have the right to require medical examinations, functional capacity evaluations and/or psychiatric examinations in the evaluation of what benefits, if any, are payable. The examinations may include x-rays, blood and urine tests, psychological tests, and other tests or procedures that We deem reasonable to evaluate whether You continue to meet the definition of Disability. The examinations will be performed by a doctor or specialist We deem appropriate for the condition and will be conducted at the time, place and frequency we reasonably require, while You claim to be Disabled. We reserve the right to choose the examiners. The examinations will be paid for by Us. Such examinations may include any related tests that are reasonably necessary to the performance of the examination. We may deny or suspend benefits under the Policy if You fail to attend an examination or fail to cooperate with the examiner.
(emphasis added).
Going to an in-person exam conducted by a doctor chosen by (and paid by) the insurance company can be intimidating and some testing can be painful and uncomfortable—both physically and emotionally. Whether a request for testing is proper depends on the underlying medical condition(s) and the particular terms of your policy, and it is important to approach this process in an informed manner.
Every claim is different, and these are just some examples of examination provisions taken from different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
The Evolution of Disability Policies: Part 3: Authorizations
In Part 3 of our series on the evolution of disability insurance policies, we’ll be looking at provisions related to the authorizations insurers use to investigate disability claims.
Older policies typically contain a brief, more generic provision that mentions authorizations, such as this:
Authorizations. From time to time, the Company will furnish the Insured with authorizations to obtain and disclose information. These authorizations must be signed by the Insured and returned to the Company.
Newer policies seek to go far beyond that, and not only expand the language relating to authorizations, but also incorporate serious consequences for failing to execute authorizations. For example:
The applicant or insured Member will cooperate with the Company’s efforts to obtain this information and will execute any necessary releases or authorizations. The Company shall have the right to communicate with any accountants or other bookkeeping professionals, medical professionals, medical providers or other insurers.
Failure of an applicant or insured Member to cooperate with any of these requirements may, independently of other information provided, result in: (1) rejection of an application for insurance; (2) delayed benefit payments; or (3) denial, suspension or termination of benefits.
The Company’s decision to forego obtaining any particular information does not prevent it from subsequently requiring such information.
(emphasis added).
For frame of reference, here is an example of what these sorts of authorizations say:
I AUTHORIZE THESE PERSONS OR ENTITIES having any records or knowledge of me or my health to disclose that information to [insurance company]: • Physician, therapist, healer, or medical practitioner • hospital, clinic, pharmacy, pharmacy benefit manager or other medical or medically related facility or association • other health care provider • insurance company or insurance support organization • employer, business associate, group health plan, or plan administrator • motor vehicle or driver licensing agency, law enforcement agency, or other government agency • agency, organization or entity administering a benefit program, • educational, vocational or rehabilitation organization or program • consumer reporting agency, financial institution, accountant, tax preparer or • other persons or institutions
As you can see, these authorizations can be extremely broad in scope. Sometimes the requested information is relevant to the underlying claims investigation, but in other instances the company may just be fishing for additional information about you that has little to no bearing on the nature of the claim being made.
Whether or not a request is proper often depends on the particular facts and circumstances and policy definitions in play, so it is important for you to read your policy carefully and become informed about the how the claims process works.
Every claim is different, and these are just some examples of authorization provisions taken from different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
The Evolution of Disability Policies Part 2: Interviews and Examinations
In Part 2 of our series on how disability policies have evolved over time, we’ll examine provisions related to personal interviews and in-person examinations.
Most older policies give the company the right to interview you, and say something along these lines:
Personal Interview. The company may conduct a personal interview of the Insured.
Newer policies, however, are much more aggressive and can include statements like:
Examinations. You must meet with Our representative for a personal interview or review of records at such time and place, and as frequently as We reasonably require.
or:
We must be provided with satisfactory proof of loss. If the proof of loss requirements We request are not received, the claim will be denied. Proof of loss requirements include, but are not limited to:
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- A personal interview with a company representative, which may include a statement under oath.
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Sometimes these interviews are conducted over the phone, sometimes on a recorded line, and other times the company will send a field examiner out to interview you in-person at your home or office.
These interviews are often a critical factor in whether a claim is accepted or denied, and should be taken seriously—particularly if the statements are being made under oath.
Every claim is different, and these are just some examples of examination provisions taken from different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
The Evolution of Disability Policies Part 1: Care Requirements
In this series, we will be examining how insurance companies have changed disability policies over time to make it harder to collect benefits. In Part 1, we’ll be looking at care provisions.
Most disability policies require you to be receiving ongoing medical care in order to remain eligible for ongoing benefits. Earlier disability policies typically addressed this requirement in a short, simple manner. For example:
Benefits are provided for the Insured’s total or partial disability only if:
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- the Insured is under the care of a licensed physician other than himself during the time he is disabled
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In contrast, newer policies (particularly those sold to dentists, physicians, and other professionals) now have much more stringent care requirements. For example:
REGULAR CARE BY A DOCTOR – means:
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- You are evaluated in person by a Doctor; and
- You receive treatment appropriate for the condition causing Your Disability; and
- Your evaluations and treatment are provided by a Doctor whose specialty is appropriate for the condition causing your Disability; and
- The evaluations and treatment must be at a frequency intended to return You to Full Time Work; and
- You must pursue reasonable treatment options or recommendations to achieve maximum medical improvement.
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(emphasis added). In addition, some policies hide additional caveats related to your care in other parts of the policy. For example, a policy that contains a definition of “regular care” could also have a “duty to cooperate” provision in another part of the policy that states something like this:
You have a duty to cooperate with us concerning all matters relating to this policy and any claims thereunder. This cooperation includes, but is not limited to . . .
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-
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- securing appropriate medical treatment for condition(s) upon which your claim for benefit under this policy is based. This includes such corrective/remedial surgery or generally accepted medical procedures which to an ordinarily prudent person would appear medically reasonable for such condition(s).
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(emphasis added). When you consider these provisions along with the fact that most disability policies allow your insurance company to request in-person medical examinations, you can see that filing a disability claim is not as simple as finding a doctor to sign off that you are disabled. The process is much more involved than that. In addition to being prepared to back up your diagnosis and limitations, you should be prepared for challenges to your doctor’s treatment plan (and be able to explain why you are not complying with your doctor’s recommendations, if there is a recommended treatment that you are not pursuing).
Every claim is different, and these are just some examples of care provisions taken from different policies. Your policy may contain different and/or additional language that could impact your particular situation. If you are unsure about the terms of your policy, or how a provision applies to your specific situation, you should contact an experienced disability insurance attorney.
