Your long-term disability insurance (LTD) policy likely defines disability based on whether are able to perform your “own occupation” or “any occupation.” You probably want to know — and need to know — what the difference is between “own occupation” and “any occupation” in long-term disability insurance policies and what each term means. Those provisions will determine whether you are disabled and entitled to benefits.
Our discussion below centers on provisions that typical in many long-term disability insurance policies. Your own entitlement to benefits will be based entirely on the provisions contained in your policy. If you need assistance in understanding the provisions in your own policy or have questions about your policy, you should discuss your policy and circumstances with an attorney experienced in long-term disability insurance issues.
“Own Occupation” Provisions in an LTD Policy
Long-term disability insurance policies — especially those for high-income individuals and professionals like doctors, dentists, and lawyers — sometimes include coverage for a disability that results in the insured person being unable to perform the duties of his or her specific occupation. Those policies are referred to as “own occupation” policies, because they determine total disability based on whether the insured can perform his or her “own occupation.”
If your policy has “own occupation” provisions, you likely will be considered to be totally disabled (and therefore entitled to benefits) if you can no longer engage in the customary work of your regular position. You receive benefits regardless of whether you can perform work in a different occupation. “Own occupation” usually refers to the specific work you were performing at the time you become disabled, but the definition in your policy may be different and will determine your exact coverage.
Most policies that include these provisions limit them to a specific amount of time, usually the first two years (24 months) of the disability. If your policy includes “own occupation” provisions with a time limit, coverage will change for the purpose of determining total disability to whether you are able to perform “any occupation” after the initial time period expires. That change in coverage can result in a decision by the insurance company to terminate your benefits.
Examples of “own occupation” provisions follow.
Standard Insurance Company provisions, from a Minnesota case in the United States District Court:
“You are Disabled from your Own Occupation if, as a result of Physical Disease, Injury, Pregnancy or Mental Disorder, you are unable to perform with reasonable continuity one of the Material Duties of your Own Occupation.
Own Occupation means any employment, business, trade, profession, calling or vocation that involves Material Duties of the same general character as the occupation you are regularly performing for your Employer when Disability begins. In determining your Own Occupation, we are not limited to looking at the way you perform your job for your Employer, but we may also look at the way the occupation is generally performed in the national economy. If your Own Occupation involves the rendering of professional services and you are required to have a professional or occupational license in order to work, your Own Occupation is as broad as the scope of your license.
Material Duties means the essential tasks, functions and operations, and the skills, abilities, knowledge, training and experience, generally required by employers from those engaged in a particular occupation that cannot be reasonably modified or omitted. In no event will we consider working an average of more than 40 hours per week to be a Material Duty.”
Prudential Insurance Company provisions involved in New Jersey case in United States District Court:
[A]n individual is deemed disabled “when Prudential determines that: you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury.” … “Material and substantial duties” are then defined as duties that “are normally required for the performance of your regular occupation; and cannot be reasonably omitted or modified.” … “Regular occupation means the occupation you are routinely performing when your disability occurs. Prudential will look at your occupation as it is normally performed instead of how the work tasks are performed for a specific employer or at a specific location.”
“Any Occupation” Provisions in an LTD Policy
In contrast to “own occupation” policies, total disability and benefits under an “any occupation” policy are based on whether the insured can work in any occupation, even if it’s not his or her own prior occupation. If you have an “any occupation” policy, you will not be considered to be totally disabled and therefore will not be entitled to benefits if you can still perform any occupation, as defined in the policy. Many employer-sponsored plans are “any occupation” policies, rather than “own occupation” policies.
Each policy defines what qualifies as “any occupation.” Typically, “any occupation” means employment in a position for which you are reasonably suited, based on your education, skills, employment history, and other individual factors. Often, policies define “any occupation” as any employment in which you can earn a specific percentage of your pre-disability earnings, usually either 60% or 80%. If you are a professional or work in a high-income field, being able to earn that percentage of your prior income may not be significantly different from being able to perform your prior occupation.
If your policy includes “any occupation” provisions, the meaning of the term will be specifically defined in the policy. In the context of a claim, how the term is defined in your policy will determine whether you are totally disabled and entitled to benefits.
If questions arise about whether you can perform “any occupation” for purposes of receiving benefits under your long-term disability insurance policy, the insurance company may have a vocational expert conduct an analysis to determine what occupations you can perform. If the vocational expert determines that you can perform another occupation that qualifies as “any occupation” under the provisions of your policy, the insurance company likely will deny benefits.
An example of “any occupation” provisions from The Hartford Insurance Company in a California case in United States District Court:
“After that, you must be prevented so from performing one or more of your Essential Duties of Any Occupation.” … “[A]ny occupation” is then defined as “an occupation for which you are qualified by education, training, or experience, and that has an earnings potential greater than an amount equal to the lesser of the product of your Indexed Pre-disability Earnings and the Benefit Percentage and the Maximum Monthly Benefit shown in the Schedule of Insurance.” … “Essential duty” is defined as “substantial, not incidental; is fundamental or inherent to the occupation; and cannot be reasonably omitted or changed.”
Issues that Can Arise under Occupation Provisions of a Disability Insurance Policy
If you have a policy with “own occupation” provisions that change to “any occupation” provisions after a specific period of time, there is a risk that benefits could be terminated when the time limitation expires. If your policy has only “any occupation” provisions, you may face denial of benefits when you initially submit your claim if you can still perform a different job.
Even during the “own occupation” period, insurers may disregard specific features of your job and instead review your occupation only as it is “generally performed” in the economy. This can be especially problematic for workers with multi-faceted jobs that may require physical or skilled work beyond what is commonly understood as “essential” to the performance of the occupation. If the insurer finds that a particular work task is not an “essential” function, or one that can be easily modified, you may be denied even if you are unable to perform your job as you had previously.
If the insurance company denies your claim or terminates your benefits, they likely will base the decision on their interpretation of the occupation provisions of your policy. Like all insurance companies, their primary interest is in making the most restrictive interpretation possible, so they can deny your claim and save money.
With the help of an attorney experienced in long-term disability insurance claims, you may be able to successfully appeal a denial of benefits or even prepare for the possibility of benefit termination due to a change from “own occupation” to “any occupation” criteria under your policy. To accomplish a favorable result, your attorney will argue for a different interpretation and provide evidence to support that interpretation.
Attempting to challenge a benefits denial on your own is not recommended. The insurance company will have substantial resources to apply to supporting their decision. You need to counter with equally strong arguments and evidence. That is exactly what your attorney will do on your behalf.
For example, if your insurance company uses a vocational expert in making a determination that you can perform “any occupation,” your attorney can challenge the expert and his or her findings or even provide an analysis from a different vocational expert to support your claim. Compiling medical documentation and evidence can strengthen your case as well. The strategy in each case will be different, depending on your circumstances and your policy.
Talk with an Experienced Long-Term Disability Claim Attorney
Long-term disability claims are frequently denied or terminated by insurance companies. If you are applying for benefits, anticipating possible termination of benefits under a change from “own occupation” to “any occupation” provisions, or facing a denial of benefits, our skilled and trusted disability attorneys at Bross & Frankel are here to help. If your application for benefits was denied, it is essential to get assistance as soon as possible. An appeal from denial of benefits must be filed within a limited period of time.
Rich Frankel is the managing partner of Bross & Frankel. He is a member of the New Jersey and Pennsylvania bars. He has focused exclusively on disability and social security benefits since 2005.
Mr. Frankel joined what is now Bross & Frankel after having watched his father struggle with disability, fighting a lengthy illness. Mr. Frankel founded the firm’s veteran’s law practice and substantially grew the social security disability practice, focusing Bross & Frankel’s ability to fight for all of the disability benefits available to his clients.
Mr. Frankel additionally fights for clients in court, obtaining frequent victories in Social Security appeals and against insurance companies in Federal court.