“Any Occupation” vs. “Own Occupation” Long-Term Disability Insurance
Most employers offer some form of ERISA group long-term disability insurance to their employees. While this is always a useful perk, it’s important to realize that not all group or individually purchased disability insurance policies are the same.
Many aspects of these policies, whether individually purchased or employer-sponsored, can vary, including the duration of coverage (how long you’ll receive monthly benefits for a successful claim), the extent of coverage (the percentage of your working income monthly benefits will replace), elimination periods, deductibles, exclusion clauses or policy limitations or riders, and the definition of disability.
When it comes to definitions of disability, there are two broad categories you need to be aware of; “own occupation” and “any occupation” disability definitions.
How Does “Any Occupation” Long-Term Disability Insurance Work?
An “any occupation” policy will provide monthly benefits to a claimant in the event of a sickness or injury that prevents the uninsured from working in “any occupation” for which they are trained, educated, or suited.
Traditional “any occupation” terms are the least generous policy you can buy or receive. You must be unable to work with reasonable continuity and in the usual and customary way, in any occupation you are trained to be entitled to income replacement benefits. Therefore, premiums are cheaper for these kinds of policies, all other factors being equal.
The language on “any occupation” policies can be very broad, making it more difficult for you to collect on your claim. If your policy will not pay monthly benefits unless you’re too incapacitated to work in almost any full- or part-time job that exists in the economy, your insurer could argue that you do not meet their definition of disability.
Most employer-purchased group policies have “any occupation” disability terms, as this reduces costs for the employer. If you’re not comfortable with the level of coverage your ERISA group policy provides, you should consider supplementing it with an individually purchased policy of your own.
How Does “Own Occupation” Long-Term Disability Insurance Work?
“Own occupation” definitions treat claimants as disabled once their condition prevents them from carrying out the duties associated with the role they had immediately prior to the onset of their claim. So, even if you’re capable of working in another position, you’ll be able to file a successful claim as long as your physician confirms you can no longer do the tasks associated with your previous occupation.
It’s important to realize that your insurance carrier in most group ERISA policies will assess your role on the basis of how the work is generally performed in the national economy, rather than how you personally fulfilled it. For example, if a slight cognitive impairment leaves you unable to execute your specific duties as a business executive, but your insurer deems your condition minor enough that you could carry out the tasks required of the average business executive in the US, they may reject your group ERISA claim, despite the fact you can no longer do your occupation.
Some “own occupation” policies are so flexible that you can take up employment in a role other than the one you occupied prior to your claim and still enjoy full monthly disability benefits. For example, if a physical disability has left you without the fine motor skills you need to work as a surgeon, your policy might allow you to work as a general practice doctor while still receiving full “own occupation” monthly insurance benefits.
Of course, this kind of flexibility comes at a price. Premiums are typically more expensive on long-term disability policies that offer “own occupation” terms. There are some customized “own occupation” definitions that offer less comprehensive protection than true “own occupation” language in return for cheaper premiums.
Modified “Own Occupation” Disability Insurance
This definition regards you as disabled when your condition renders you unable to work in your “own occupation”, but will not continue paying monthly benefits if you take up other employment.
Transitional “Own Occupation” Disability Insurance
This kind of policy will allow you to earn money from a new occupation and receive monthly disability benefits at the same time. In this case, though, the policy will stipulate that you cannot earn more from a combination of those two income streams than you were making prior to the onset of your disability claim.
Which Kind of Disability Definition Applies to Your Policy?
Your disability insurance policy may not actually use the words “own occupation” or “any occupation” when defining what kinds of conditions qualify for monthly insurance benefit payments. It may fall to your lawyer to argue that you should qualify for a successful claim based on the wording of your policy, the nature of your condition, and the functional limitations it imposes on your ability to work.
If your long-term disability insurance policy is employer-sponsored, chances are it uses some form of an “any occupation” definition of disability. Employer-sponsored group policies also tend to offer less favorable terms in other areas too, such as limitation periods for self-reported and mental/nervous claims.
Even if you have an “own occupation” policy, you should be aware that its benefits may not last indefinitely. Some policies will allow your insurance carrier to re-evaluate your case after 24 or even 60 months using a less generous “any occupation” definition of disability thereafter.
Policy language is often long-winded and complex. If you’re confused about the limits of your coverage, consulting with a long-term disability insurance attorney is the best way to find out exactly what your policy-provided entitlements are.
Getting to Know Your Long-Term Disability Insurance Policy
Having a long-term disability insurance policy, whether you get it through your workplace or on your own, is an important purchase you need to know how to use. However, you also need to make sure you know the difference between “any occupation” and “own occupation” terms in order to fully understand the limits of your coverage. If you’re filing a claim, these definitions of disability could be the difference between acceptance and rejection.
If you’re concerned about how your policy terms might affect your long-term disability insurance claim, we can help. Contact DarrasLaw today to schedule a free initial policy or free group or individual claim analysis. If you’ve already filed a claim and been denied, we can start working on a strategy to give you the best chance of success on your group ERISA appeal or litigate your individual policy claim.