LTD Denial: Understanding "Own Occupation" vs "Any Occupation"

Washington, DCIt is said that an educated consumer is the best customer. Were it to be true, then the wary and aware long-term disability policyholder facing long-term denied disability might have seen it coming – and might even have been in a position to prevent the denial from happening in the first place. At the very least, knowing you’re on solid ground in the face of an unfair denial to a legitimate claim, could buoy the policyholder with some assurance that at the end of the legal wrangling, things will be made right.

In sum, long-term disability kicks in following a round of short-term disability benefits. In both cases, disability benefits start when you are no longer able to perform your job due to real and defendable medical issues. However, it can be a slippery slope that turns what should be a straightforward application for benefits, into a bad faith insurance claim that often drags on for months, or even years.

For long-term disability policies, there are two types of standards applied: ‘own occupation,’ and ‘any occupation.’ The former is the better of the two, according to experts, and provides the most options. Basically, disability based on the ‘own occupation’ standard covers the policyholder when no longer able to perform the functions of their particular occupation. This is especially important for policyholders engaged in specialized, unique vocations such as medicine, dentistry and such. While they may be able to work in another occupation, the alternative may not pay nearly as well as the occupation in which they can no longer perform, and thus require some protection of their income.

‘Own occupation’ also, as the foregoing suggests, allows the claimant to engage, at their own discretion, in gainful employment through another line of work unrelated to the vocation covered by the LTD policy, while still collecting benefits.

‘Any occupation’ on the other hand, is more restrictive. Under this standard, total disability is based upon the inability to perform work in any occupation. In order to prove this, a larger basket of analytics and qualifiers are brought into play to determine potential employability in all potential vocations, rather than the current vocation of the policyholder – which is much narrower and much less restrictive. Even if a claimant is unable to work full time in any occupation – but could manage a part-time gig – most courts hold that under the ‘any occupation’ standard the policyholder is not unemployable and thus, does not meet the standard of disability.

Language in an LTD policy – either in the main body of the contract or legally attached as a rider – can be written in such a way that confuses the issue for the claimant (and, for that matter, even for insurance adjustors). To wit, some ‘own occupation’ riders are written in such a way that requires a claimant to be working in order to receive disability benefits. It appears as a Catch-22 of sorts, but the fact remains that under this language yes, you are entitled to total disability benefits if you can no longer perform the functions of your current occupation. However, such language takes away the option of working in another line of endeavor if you so choose. Instead, you must be working to collect.

What if you had to leave you dentistry practice, for example, due to stress or anxiety that would translate equally to a different form of work? Under the terms and language noted above, you would have to set aside your anxiety and go back to work doing something, in order to collect your LTD benefits.

Let’s say you’re successfully collecting benefits, and you want to keep it that way. There are signs you can watch out for, hinting that your insurer might be setting you up for a fall…

An appointment with their doctor:

Experts say if you get a call to attend a doctor’s office for examination by a physician representing the insurer – as part of the claims process – the reality is likely less to do with determining an unbiased summary of your current health and wellness (or lack thereof), and instead more to do with seeking a medical determination that would provide the insure a viable reason to end, or deny your LTD benefits.

Your coverage is transitioned from ‘own occupation’ to ‘any occupation':

Unless your LTD policy is set up in such a way that guarantees you ‘own occupation’ status for the duration the policy is in force, experts note that most insurers attempt to transition ‘own occupation’ policies to ‘any occupation’ status about two years following the start of benefits payments. This is a time when LTD benefits are often denied. Provided you’re aware of language in the contract that allows the insurer to transition you in such fashion after a period of time, it is in your best interest to arm yourself with useful and defendable information and assessment from your doctor as to your suitability for returning to some kind of gainful employment.

An application for Social Security benefits wouldn’t be a bad idea, either, as a failsafe.

Finally, have you been assigned a new claims manager? This could be a sign that your case has been targeted for potential denial – and assuming you’ve fostered a good relationship with your claims specialist up to that point, the insurer is not going to leave someone in that portfolio who could be sympathetic to your plight. Rather, ‘the new guy’ will be well-versed on your situation without being saddled with a personal relationship – thus there is no impediment whatsoever, if a reason can be found, to deny your claim or terminate your benefits.

A denied disability claim – either denied from the beginning, or terminated after a year or two – is one of the worst possible scenarios to deal with. You can’t work – or at least not without great difficulty – and yet your much-needed benefits suddenly stop based on a dubious interpretation of your policy, or just out of greed.

That is why it’s so important to take the time to know what’s in your policy – and anything you don’t understand should be clarified through a qualified long-term denied disability attorney.

You know what they say about being an educated consumer…