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A key consideration in reviewing a disability insurance policy is the definition of disability. The most common definitions of disability are referred to as “own occupation” and “any occupation”. Some policies combine the two, starting with the own occupation period of disability and then moving to any occupation after a specified period of disability. In a recent post, Private Disability Insurance – Definition of Disability and Common Terms , we outlined some common terms in private disability policies.
This post does a deeper dive into the difference between the definitions as well as how insurers view own occupation in particular. The own occupation definition of disability may seem simple but the interpretation of one’s occupation can be a matter of debate between insureds and their insurers.
Many people are offered group insurance benefits through their employers. Group insurance policies have a variety of structures. The most common group insurance policies have a first period referred to as the own occupation period for 24 months or 2 years. During the own occupation period, the question is whether you are disabled from the job you performed just before you worked.
At the end of the own occupation benefit period, the definition changes to any occupation. After definition change, the question is whether you can perform another gainful occupation. Any occupation generally means a job which you are qualified to perform given your education, training and experience.
An own occupation insurance policy is valuable because it is usually easier to prove that you cannot perform the substantial duties of your own occupation than it is to prove total disability from any occupation. Your own occupation will often be one which requires specialized skills, training and experience. If you are unable to perform the specific occupation listed in your own occupation policy, the insurer will pay your disability benefit claim even if it is clear that you can be gainfully employed in another position.
When you submit your disability claim in the own occupation period, the insurance company reviews your application to see if you can perform the material duties of your regular occupation. It is important that the insurer has a proper job description and understands what duties you are required to perform.
The insurance company will focus on whether your health causes total disability from the date that your disability begins and throughout the elimination period. It is important to provide specific information about how your symptoms and condition cause you to be limited from performing your duties.
Some disability plans do not have an own occupation disability period. The LTD policy may provide that you can only collect benefits if you can prove total disability from any occupation. It is important to keep this in mind when submitting your claim because if you tie your disability to the specific stresses and material duties of your workplace or your regular occupation, the insurer can deny your disability benefits because you can perform a different job.
If you are denied benefits, it is important to see what your doctor said about your disability. Some members of the medical profession will adopt an advocacy role in completing your attending physician’s statement. For instance, the doctor may tie your disability to your own job and your workplace which allows the insurer to say that you are only considered partially disabled because you could perform your occupation in a different setting (workplace) or you could perform a different job. While those may seem to be highly technical distinctions, it is important for your doctor to support your inability to perform any occupation. You gain nothing by blaming the workplace and the doctor’s comments will provide the insurer with a reason to deny your benefit payments.
Insurance companies offer own occupation disability insurance policies which appeal to self-employed individuals and professionals. The policy can be tailored to the individual purchaser so that the benefit period is longer than the usual age 65 expiry found in group coverage. You may also have an opportunity to increase the monthly benefit as your pre-disability earnings increase and as your specialization in your career grows. These policies may also provide an annual cost of living adjustment in accordance with the consumer price index.
Privately purchased own occupation policies are not tied to one employer. The coverage will be in place if you leave your employment and become self-employed or if you switch employers. The private coverage can be a replacement for group insurance and it can also enhance group insurance where you may no longer be considered disabled after the end of the own occupation benefits period. Therefore, even if the group coverage states that your LTD benefits are terminated because you can perform a different job, the private disability policy may pay benefits because you are unable to perform the substantial and material duties of your regular occupation.
Self-employed people may choose to purchase own occupation insurance policies. Professionals with highly skilled or specialized occupations will benefit from these policies because they need to purchase coverage which will pay them disability benefits even if they can perform a modified own occupation. The level of specialty and skill involved in the profession means that the insured person will have a high income which will support a substantial benefit amount.
It is important to specify the own occupation so that the occupation test is an easy one to meet. For instance, if a doctor’s own medical specialty is ophthalmic surgeon, they will not want the definition of disability to be “ophthalmologist”.
Another situation where an own occupation policy may be ideal is where the occupation is one which requires physical strength or particular functional abilities such as acute vision, hand strength and dexterity or reaction time. For instance, a dentist and a finishing carpenter may both purchase individual disability insurance with own occupation definitions due to the requirement for them to have full use of their hands or due to concerns about neck and back injuries from repetitive physical work.
When you purchase an own occupation disability policy, you may believe that it’s clear that if you cannot perform the material and substantial duties of your regular occupation (as you know it), you will be paid the monthly benefit. Your policy may say that you satisfy the definition of disability if you cannot complete the main duties of the occupation that you performed just before you became disabled. Alternatively, your occupation may be listed in the policy as “lawyer” or “veterinarian”. Although it may be clear to you that you cannot perform your profession, the insurer may take a different view based on their misconceptions of your occupation.
As is often the case, fact situations illustrate the problems more clearly. This post explores the definition in greater detail – looking at the occupations of Large Animal Veterinarian, Steadicam Operator and International Tax Lawyer.
John is 58 years old. He trained as a large animal veterinarian and developed a successful, busy practice treating cattle and horses in particular. He has built his practice through close relationships with local farmers, horse owners and trainers in his community. Having focused his practice in this way, John has not worked with small animals for many years. His policy describes his occupation as “veterinarian”.
John develops multiple sclerosis and makes a claim under his private disability policy. John’s condition is variable with his greatest symptoms being fatigue, difficulty walking, numbness and weakness. His symptoms come and go but he has found that, overall, he cannot handle the heavy physical work involved in his veterinary practice.
The insurer pays John for a period of several years. John’s partners take over his practice. John’s neurologist describes his condition as stable and in remission. The claims adjuster asks John why he cannot practice in a small animal veterinary practice with fewer physical demands. John does not know whether he would have the physical ability to practice in a different area, and he has not practiced in the small animal field for many years. John would need to build a new client base and learn a new area.
The problem is that the adjudicator does not understand the business, John’s daily work, nor the training involved in his profession. John knows that he is unable to perform his own occupation and should continue to receive benefits. However, the insurer terminates his disability payments, taking the position that he can work in a less heavy physical practice as a general veterinarian.
John has a successful and specialized practice as a large animal veterinarian. His education and training were devoted to his area of practice. He built a successful practice through years of building relationships with his clients and the community.
The insurer takes the position that he will not require the same physical strength to practice in a different context with smaller animals. John knows that he is ill-equipped to treat such patients and would need to retrain and start a new practice which would take years to develop and significant energy.
Fred is a cameraman, specializing in operating a Steadicam – a camera stabilizing system used to film certain shots in the movie industry. The Steadicam is heavy and the operator requires significant strength and specific training. The policy Fred purchased is specific and states that his occupation is “Steadicam Operator”.
Fred is injured skiing and fractures several bones including his hip and shoulder. He has multiple surgeries and is compliant with the recommendations of his treatment providers.
Fred tries to return to work. He quickly finds that he can no longer operate the Steadicam. It is too heavy and causes him significant pain. He can perform some camera work with a conventional camera and gets some work in the film industry. He earns a fraction of his former income and discloses his income to the insurer. The insurer takes the position that Fred has retrained and is no longer disabled.
The nature of the film business is that Fred’s income has fluctuated over the years. The insurer does not understand that Fred’s ability to earn income has been seriously impacted by the fact that he can no longer operate the Steadicam. The insurance company is not aware that Fred always worked in other areas of the film industry in addition to operating the Steadicam. He satisfies the definition of disability, but he needs to dispute the insurer’s decision and provide more information about his occupation and work history.
Catherine has been practicing law for 25 years at a large Canadian law firm. Catherine has developed a particular interest and become one of the country’s foremost experts on the tax implications of cross border transactions. Her work involves long hours and tight deadlines with significant travel. Catherine has a private disability policy which says that she is totally disabled if she cannot perform the essential duties of her own occupation.
Catherine is injured in a motor vehicle accident and suffers a head injury. She has a concussion and develops chronic migraines. Catherine is off work following the accident and returns to work at a reduced capacity, providing support on uncomplicated transactions. Whereas Catherine worked 55 hours/week in quiet periods and 70+ hours per week during transactions, she can now work at most 40 hours per week due to her recurrent headaches.
The policy says that as long as she has suffered a loss of income of more than 20% of her prior monthly earnings, her disability benefit is paid. The insurer pays Catherine her disability income benefit for several years without incident. She provides the insurer with proof of her loss of income and advising of her hours of work. The problem arises when Catherine’s case is assigned a new case manager.
Catherine’s case manager sees that she is working 40 hours per week. While he understands that she is suffering a loss of income, he concludes that she could work as a full-time lawyer on a different type of practice and is no longer disabled. He asks her for medical evidence supporting her inability to increase her hours. Catherine explains that she is no longer involved in the same types of work because of her unpredictable migraines and the requirement to pace herself and avoid a lack of sleep. Her family physician supports Catherine but it is clear that the doctor’s opinion is based on Catherine’s self-reporting of symptoms.
The case manager terminates Catherine’s claim for benefits, saying that she is not totally disabled within the meaning of the policy because she can work 40 hours per week as a lawyer. The insurer says she can choose to increase her hours at her current workplace as there is no medical proof of her need to limit her hours. Alternatively, the insurer suggests that she could practice law elsewhere, suggesting she could practice corporate law as a sole practitioner.
Catherine has always practiced at a large firm in a specialized practice. She has provided support to her partners on their transactions. She has never built a client base. Catherine has never drafted a will or worked on a residential real estate transaction. The insurance company ignores Catherine’s occupation at the time of disability and the specialized skills and practice she has built.
The insurance industry markets the own occupation policy, advising that you will be paid disability benefits if you cannot work in your own occupation. The insurance company’s position that Catherin can be a different type of lawyer does not reflect the spirit of the policy nor the basis on which it was sold to Catherine.
You studied for years and worked hard build the expertise necessary to practice your occupation. Therefore, you chose a private disability policy with own occupation coverage in order to provide income replacement if you became disabled from working in your specialized field. It is important to provide the insurer with detailed information about the skills and capacity required to perform your occupation appropriately and to dispute any misconceptions they may have developed because they haven’t had the information necessary to adequately assess your claim.
We know how to approach own occupation cases and can assist you in challenging the insurer’s decision to deny or terminate your private disability income claim. For advice, please text 613-777-0992 or call us at 613-233-6898 to schedule a meeting with one of our lawyers. We will provide a free consultation, in French or English, to ensure that your rights are protected. In most cases, we can offer to represent you on a contingency fee basis. This means that you do not pay legal fees unless you win or achieve a settlement on your case.
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