Disability Insurance: Long Term: Group

A long term disability income policy pays benefits should you become totally disabled. This begs the question: how is "total disability" defined for purposes of these policies?

Generally, the following relate to a definition of "total disability" for purposes of long term disability insurance policies:

• You must be under the regular care of a licensed physician other than yourself.
• If your condition does not fit in the definition of Presumptive Disability, you must not be gainfully employed and must be unable to either perform your "own occupation" and/or "any suitable occupation." Most group policies use both definitions. For example, a policy may use "Own-occupation" definition during the first two years of disability, and apply the other definition after you have been disabled for two years.
• You are presumed to be disabled if you fit within the policy's definition of "Presumptive disability." For instance, you may be considered to be totally disabled if you lose use of two or more limbs or the total loss of sight.

Own-occupation

Under an "own-occupation" definition of disability, you are considered to be totally disabled if you are unable to perform the material (necessary) duties of your own occupation.

For example, if you are a switchboard operator and have polyps removed from your vocal cords, you are totally disabled because you can't speak on the telephone. Speaking on the telephone is clearly a material duty of your own occupation.

On the other hand, if you are a typist and occasionally cover the switchboard when the operator is at lunch or on breaks, you can still perform the "material" duties of your own occupation and would not be able to make a claim under this definition.

Any-suitable-occupation

Under an "any-suitable-occupation" definition of disability you are totally disabled if you are unable to perform the material duties of any occupation for which you are reasonably suited by education, training, or experience. As you can imagine, it is harder to be considered to be disabled under this definition than under an "own-occupation" definition of disability.

As noted immediately above, materiality and suitability go together. An example of being disabled so you can't perform your own-occupation is a surgeon with arthritis in her hands so that she can't perform surgery. On the other hand, if the definition is "any-suitable-occupation", she won't receive benefits because she is capable of teaching or consulting on surgery.

If our surgeon's policy had a provision that said she would only be paid during the first two years if she were unable to perform her own occupation, but then the definition changed to "any-suitable-occupation", she would receive benefits for two years, and then they would stop.

An insurance company's determination about disability can be appealed.

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