Individual and Group Disability Insurance Definitions: The Layperson v. The Legal Terms

Helping Beneficiaries Understand Their Confusing Individual and Group Disability Insurance Policies

What comes to mind when you think of the term disability? Do you see someone in a wheelchair, with a guide dog, or walking with an aid?

Webster’s defines “disability” as “a physical, mental, cognitive, or developmental condition that impairs, interferes with, or limits a person’s ability to engage in certain tasks or actions or participate in typical daily activities and interactions.”

While this is a good overall definition of the term, are you disabled if you can’t touch your toes? What if you can’t work due to persistent, painful migraines?

Unfortunately, because of the potentially broad definition of disability, your individual or group disability insurance policy likely has its very own specific definition—one that may or may not cover your sickness or injury.

Individual and group disability insurance policies define broad terms like disability differently, and that definition governs how to interpret your policy. As long as the definition is clearly set forth in the policy documents, your individual or group disability insurance company may define almost any term to mean what it wants, even if it’s contrary to normal understanding.

Never assume you understand the nature and extent of your individual or group long-term disability insurance benefits until you speak with an experienced disability lawyer or ERISA attorney from DarrasLaw. Individual and group disability insurance contracts are written by lawyers and are hopelessly confusing. Don’t be fooled. Contact the seasoned long-term disability attorneys and ERISA lawyers from DarrasLaw during the disability claims process. To schedule your free disability policy analysis or free claim consultation, call us today at 800-898-7299 or contact us online.

Definition of Disability Under Your Long-Term Disability Plan

Somewhere in your individual or group long-term disability insurance policy documents, you’ll almost certainly find a “Definitions” section. Within that section, you’ll probably see a long definition of disability. Individual and group long-term disability insurers may define disability as follows:

The Employee is considered Disabled if, solely because of Injury or

Sickness, he or she is:

1. Unable to perform the material duties of his or her Regular

Occupation; [and]

2. Unable to earn [60 percent] or more of his or her Indexed Earnings from working in his or her Regular Occupation.

Furthermore, this definition may change if you’ve received disability benefits for more than two years. In this case, you may only meet the definition of a disability if you are unable to perform the material duties of any occupation based on your education, training, or experience, and your station in life. In other words, after two years, the definition changes from an occupation specific disability—that is, you can’t perform your important occupational duties—to an “any occupation” definition of total disability—that is, you can’t perform any work by which you are trained, educated, or suited, taking into consideration your station in life.

What’s further frustrating is that a plethora of other terms also have special meanings within your individual or group long-term disability insurance policy. You may find the following definitions in your policy:

• Regular occupation – For individual disability policies it’s the profession in which you are working at the onset of disability. The definition of “total disability” is your inability to perform the substantial and material duties of your occupation with reasonable continuity and in the usual and customary way. For group policies, the standard is how your work is performed in the national economy. Example, say you are a vice president of sales and overnight travel was required. Unfortunately, if you have group coverage, there are vice president of sales jobs in the national economy that don’t require overnight travel.
• Appropriate care—A beneficiary needs to receive the most appropriate care and medical treatment that conforms to accepted medical standards and treatment in the community.
• Disability benefits – Payment to covered employees or individual under the terms of the plan.
• Injury – Accidental bodily harm.
• Rehabilitation plan – A written plan designed to help the beneficiary return to work.
• Indexed earnings – An employee’s covered earnings plus an increase based on the Consumer Price Index.
• Sickness – A physical or mental illness that prevents the insured from working.

When you’re trying to understand whether you qualify for individual long-term or group disability benefits, just understanding the terms of your policy is like trying to solve a puzzle.

“True Own Occupation” Coverage

Understanding how your long-term individual or group disability policy defines and limits your coverage is essential to claiming your disability benefits.

If you work in a skilled profession, such as law or medicine, you may have something called “true own occupation coverage.” True own occupation coverage means that you’re entitled to disability benefits if you cannot perform the important duties of your regular occupation. With this type of coverage, you’re typically entitled to disability benefits even if you could work in a different occupation.

For example, if you’re a court reporter and break your right thumb, your individual disability insurance policy may cover you for “true own occupation” benefits because you cannot type at the rate that your occupation requires. A broken thumb, though, would likely not qualify you under an “any occupation” definition by which you are trained, educated, or suited, because a thumb break wouldn’t preclude all work.

“Any Occupation” Coverage

It is more difficult to obtain individual or group long-term disability benefits if you have an “any occupation” policy. To claim disability benefits in the “any occupation period,” you must prove yourself totally disabled from “any occupation,” taking into consideration your education, training, skills and your station in life. For example, if you are a neurosurgeon who develops tremors and can no longer operate, “any occupation” coverage may not entitle you to benefits because you could still teach, consult, assist, and run your own medical practice. On the other hand, if you’re a surgeon with a traumatic brain injury, then you may qualify for disability coverage under an “any occupation” policy if you couldn’t do any work for gain or profit.

Some policies offer “true own occupation” coverage that may convert to “any occupation” coverage after a certain period of time. Let’s say you lose your thumb due to an injury or infection. If you were a court reporter, this might qualify you to claim “true own occupation” disability benefits for a period of time, as defined in your policy. Your group disability insurance company’s rehabilitation plan might require you to take training classes to prepare for a new occupation. Understand the difference ahead of time so you can prepare for the battle for continued benefits after the “true own occupation” benefits expire and the “any occupation” coverage kicks in.

Group Policies Make Everything More Complicated

As if that’s not enough, if you have employer-provided or group-sponsored disability insurance, a complex mix of federal statutes (called ERISA) generally govern your disability insurance benefits.

When a group disability plan wrongfully delays or denies your valid claim and you need to fight back; the rules, procedures, scant consumer protections, and strict, unforgiving deadlines change drastically compared to individual disability insurance that you purchase yourself from an agent or insurance broker.  Few attorneys understand ERISA unless they focus on this area of the law. Protect yourself by consulting an award-winning disability lawyer or nationally renowned ERISA attorney from DarrasLaw.

Get a Top-Rated Individual or Group ERISA Attorney or Disability Lawyer From DarrasLaw on Your Side Today

The terms of your individual or group long-term disability insurance policy are complicated and contain special definitions within special meanings. Even if you think you qualify for disability benefits, your individual or group long-term disability insurer may try to wrongfully delay, deny, or terminate your disability benefits based on a vague and confusing terms in your individual or long-term group disability policy.

The award-winning individual and group long-term disability lawyers and accomplished ERISA attorneys at DarrasLaw have more than 100 years of combined experience interpreting complex disability policies and fighting for your right to disability benefits. Frank N. Darras and his firms have recovered nearly $1 billion in wrongfully delayed, denied, and terminated insurance benefits for his clients. To take advantage of our free disability policy analysis and free claim consultation, call us today at 800-898-7299 or contact us online.