Disabled in the National Economy versus Disabled From Your Actual Job: Why Does it Matter?
Individual or group long-term disability (LTD) insurance is designed to protect a portion of your income, as defined in your policy, if you suffer an injury or illness that leaves you unable to work.
If you are self-employed or an independent contractor, you may have an individual long-term disability policy that you purchased from an agent or broker. You typically pay the premiums for an individual policy, so the benefits flow to you tax-free. The individual policy is yours to keep if you leave your employment or get terminated.
The majority of American workers who are covered by long-term disability insurance have a group policy through an employer or professional organization. These policies are generally linked to your job or organizational membership.
Either way, the crux of individual or group long-term disability insurance benefits is an injury or illness that prevents you from performing the important duties of your occupation. This is the basis of claiming individual or group long-term disability insurance benefits, and it’s also the first hurdle you need to clear.
Every individual or group long-term disability insurance carrier defines occupational duties differently. It will almost always define your job or occupation as the one in which you’re currently engaged at the “onset” of your disability, but the definition of your occupational duties makes all the difference.
Always take advantage of the free long-term disability policy analysis and free claim consultation offered by the award-winning individual and nationally pre-eminent group ERISA disability attorneys at DarrasLaw. Whether you can successfully claim individual or group long-term disability benefits may depend on how your individual or group long-term disability insurance company defines your occupation. To schedule your free disability case analysis, call us today at (800) 458-4577 or contact us online.
Disabilities and Your Occupation
Individual and group disability insurance claims aren’t one size fits all. An injury or illness that qualifies a carpenter for individual or group long-term disability benefits may not qualify a doctor. Multiple herniated discs after a car accident may prevent a carpenter from using the tools of the occupation and, in turn, from working. On the other hand, the same injury may not qualify a family practice doctor who can sit during exams for individual or group long-term disability benefits.
Individual and group long-term disability policies typically define disability as an injury or illness that leaves you unable to perform the important duties of your occupation with reasonable continuity and in the usual and customary way.
Individual and group long-term disability policies may not specify these functions, as the contracts are designed to apply to an array of beneficiaries. However, your individual or group long-term disability policy will define what it means by your occupational duties. It typically does this in one of three ways:
- It will define your duties as they are “regularly performed in the national economy.” This is known as “modified own occupation” coverage.
- It will define your duties as you, and not others, perform them. This is called “true own-occupation” coverage.
- It will define your duties as any occupation by which you are trained, educated, or suited taking into consideration your station in life. This is called “any occupation”
Which type of individual or group long-term disability plan you’re enrolled in can determine your eligibility for benefits.
“Modified Own Occupation” Coverage
This is one of the most common types of individual or group long-term disability insurance policies. Under these individual or group long-term disability insurance policies, you’re only entitled to benefits if you’re disabled from your occupation as it’s performed in the national economy.
If your job functions are relatively mainstream, this might not create an issue. But what if your duties are unique?
For example, Ed works as a postal clerk in his rural Post Office. Because the town is so small, the Post Office also needs him to deliver packages, sort mail, and take the trucks for maintenance. This isn’t in Ed’s job description, but it’s part of his actual job.
In the national economy, postal clerks do not sort mail, drive trucks, or deliver packages. Accordingly, if Ed only has “modified own occupation” coverage through his union, his group ERISA long-term disability insurance policy may not entitle him to benefits if a seizure prevents him from driving or handling packages. This is because his condition doesn’t prevent him from doing his occupation as it’s performed in the “national economy.” This hidden problem is the real danger with national economy policies.
“True Own Occupation” Coverage
Most surgeons, attorneys, and specialists in their fields carry “true own-occupation” coverage. With this type of coverage, if you’re disabled from your actual duties as you perform them, you may successfully claim individual or group long-term disability benefits. A common example of this is a neurosurgeon who injures her hand. This prevents her from performing surgery, which is her primary duty in time spent and/or money earned.
In essence, her injury does not prevent her from working as a doctor; it just prevents her from working as an operating neurosurgeon. With “true own-occupation” coverage, she could teach or consult, for example and could still be “own occupation” disabled. She could successfully claim individual or group long-term disability benefits for any injury or illness that prevents her from performing neurosurgery duties.
“Any Occupation” Coverage
This is the broadest type of individual or group long-term disability insurance. Most successful “any occupation” claimants suffer from total disabilities, which means they can’t engage in any meaningful work for gain or profit. Here’s an example of how an individual or group long-term disability insurance company can use “any occupation” coverage to deny your disability benefits.
John is a career construction worker who suffered a severe concussion one day after work. As a result, he’s no longer allowed to climb ladders, scaffolds, or engage in any work that could injure his head. John also has a degree in Spanish studies, but he hasn’t used it for 10 years. If he has “any occupation” coverage, his individual or group long-term disability insurer will claim he’s not disabled from any occupation because he can:
- Work as a Spanish translator
- Teach Spanish classes
- Work as a construction foreman
- Take a front-office job
Even if John has no desire to do these jobs and has never done them, his individual or group long-term disability insurance company may deny him benefits under an “any occupation” plan.
Fight a Wrongful Delay, Denial, or Termination of Individual or Group Long-Term Disability Benefits: Contact DarrasLaw Today
Individual and group disability insurers make their disability policies intentionally confusing. The language is written to trap you, and the policy may not have been properly explained to you at sales time or when the policy went into force. If you are faced with a wrongful delay, denial, or termination of individual or group long-term disability benefits, contact the top-rated individual disability attorneys or award-winning, national group ERISA lawyers at DarrasLaw today. Frank N. Darras and his firms have recovered nearly $1 billion in wrongfully delayed, denied, and terminated insurance benefits, and we may help you. To schedule your completely free disability policy analysis or free claim consultation, call us today at (800) 458-4577 or contact us online.