Own Occupation Period vs. Any Occupation Period – The Devil Is In The Definitions

When it comes to client’s who have been denied their long-term disability benefits, we have many that when they first contact us are surprised that their own insurance company would treat them so unfairly.  They believe that since they have been paying their insurance premiums for however many years that their insurance company would fight on their behalf to ensure they obtained access to the disability benefits they are entitled to.  Nothing could be further from the truth.

At the end of the day the insurance company has only three considerations when it comes to their operations.  The first is: take in as much money as possible.  The second: pay out as little money as possible.  A far distant third consideration is: try not to get sued.  Concepts of “fairness” do not come into the equation.  The relationship between an insured individual and their insurance company is a strictly contractual one.  The only thing that matters is what rights are provided to the individual under the specific contractual terms of the insurance policy and what obligations do both the insured and the insurer have to the other under the policy.  To qualify for long-term disability, you need to qualify as disabled under the specific definition of your policy.

If you don’t meet the definition of that term in your policy you will not be eligible for benefits and as such, it is the most important term/definition in any long-term disability policy.  For most policies there are only two other phrases that are as important and those are “Own Occupation” and “Any Occupation”.

Being Disabled From Your Own Occupation

No two insurance policies are ever necessarily alike.  Certain more expensive private long-term disability policies can have extremely low hurdles to meet the definition of disabled.  However, for most long-term disability policies the definition of “disabled” is some form of you being unable to complete the essential or substantial and material duties of your employment due to illness or injury.  In the insurance industry this is referred to as the Own Occupation period or Own Occupation disability.

While the time frame can change depending on the specific policy, most Own Occupation periods last for the first two years or 24 months of disability, after which the definition of disabled often changes.  Every policy is different and must be closely examined for the nuances of the particular wording of your policy to ensure you qualify for disability in the Own Occupation period.

Being Disabled From Any Occupation

Once the Own Occupation period ends most long-term disability policies have the definition of being disabled under the policy change to being disabled from Any Occupation.  This usually does not actually Any Occupation that may exist.  The wording is usually close to something along the lines of you being disabled from performing the essential or substantial duties of Any Occupation you are reasonably suited for given your experience, education, and training.  So your background and skill set to factor into the equation, even though your insurer may try to gloss over that part to try to deny your long-term disability benefits.

Along with being something you are suited for due to the specifics of your background, most Any Occupation definitions of disability include an income threshold relative to what you were making prior to becoming disabled in order to qualify for long-term disability benefits.  As with all things different policies will have different terms, but generally speaking, most any occupation employment that would disentitle you to long-term disability benefits would have to earn you at least 60% of what you were earning prior to becoming disabled.

The Any Occupation definition can be difficult to meet in some circumstances however, while they are by far the exception to the rule, there are situations where it can be difficult to not be disabled.  Taylor & Blair LLP has had clients who had such high paying jobs prior to their disability that even when they did get back to a good salaried job, they still weren’t earning close to 60% of their pre-disability earnings.  Despite working full time they were technically disabled under the terms of their insurance policy.  This is of course an extremely rare situation and is not something that often occurs.

Another important consideration is that when the definition of disabled changes from Own Occupation to Any Occupation often the availability of employment doesn’t factor in to whether or not you meet the definition.  So, an insurance company may be able to deny your benefits because you are able to fulfill the essential or substantial and material duties of a job that isn’t available to you.  While this is unfair, as discussed above fairness does not factor into an insured/insurer relationship, all that matters is the specific contractual terms of the insurance policy.  And that is why the devil is in the definitions.

If your long-term disability claim has been denied, whether in the Own Occupation period or at the Any Occupation period, contact our insurance denial lawyers today as there are timeframes in which you have to act.