Our New York disability insurance attorney often finds that clients do not understand what they must prove to qualify for benefits. This post will explain some key terms found in long term disability policies that may determine whether a claim is approved or denied.
Standard of Disability
To be eligible for benefits, you must satisfy the definition or standard of disability in your policy. All long term disability insurance policies provide a standard. There are three different ones: (1) “own occupation” policies; (2) “any occupation” policies; and (3) hybrid policies.
“Own occupation” policies are the best. They require the claimant to establish she is unable to perform the material duties of her “regular occupation” (generally, the occupation the claimant is performing when she becomes disabled).
“Any occupation” policies require the claimant to meet a more difficult standard. The claimant must establish she is disabled from any occupation to which she is qualified by reason of education, training or experience. In other words, the claimant may be unable to perform the duties of her normal occupation, yet not be eligible for benefits because she can do some other work.
Hybrid policies require that a claimant establish disability from her own occupation for a specified period of time (usually 24 months), and then establish disability from any occupation.
A typical definition of disability in a hybrid policy is:
You are disabled if you are unable to perform the material and substantial duties of your regular occupation;
After 24 months of payments, you are disabled if you are unable to perform the duties of any occupation for which you are reasonably fitted by education, training or experience.
“Any Occupation” Disability Must be "Gainful"
Any occupation and hybrid policies often contain the further requirement that the “any occupation” be “gainful.” In other words, the occupation must pay a minimum salary. The minimum is determined as a percentage of the claimant’s pre-disability earnings. LTD policies usually define a “gainful” occupation as “an occupation that is or can be expected to provide you with an income that exceeds 60% of your indexed monthly earnings.” In other words, a claimant will be required to establish that she is disabled from occupations that she is fitted for in which she is expected to earn at least 60% of her prior earnings.
For example, if an executive had been earning $200,000 per year, the insurer must show that she could earn at least $120,000 in some other occupation for which she is reasonably fitted before denying her claim.
Some policies may have a different percentage so it’s important to check yours.
An occupation is “reasonably fitted” to the claimant if she (1) has the physical and mental ability (the “functional capacity”) to do it; (2) the education, training, and experience to do it; (3) the job exists in the claimant’s local economy; and (4) the claimant actually would be able to obtain such a job.
For example, a claimant who is a medical doctor may have the education, training, and experience to be a medical record reviewer or a salesperson of medical equipment. However, these occupations may not be “reasonably fitted” to her, if she doesn’t have the physical or mental ability to do them, or if few such jobs exist in her area.
Importance of getting a vocational evaluation
When the standard of disability is “any gainful occupation,” vocational evidence supporting your claim is very important. Insurance companies often enlist the services of a vocational expert to determine what other occupations a claimant is reasonably fitted to perform. You will need your own vocational evaluation to counter the conclusions of the insurer’s expert. A vocational expert will identify your transferable skills, conduct a labor market survey to identify specific occupations that are available in your area and what they pay, and determine whether you can do any of the identified occupations.
Contact a New York Disability Insurance Attorney
A disability insurance attorney at Riemer Hess LLC can handle your long-term disability claim, whether you have an “own occupation,” “any occupation,” or hybrid policy. To increase your chances for a successful outcome, call us at 212.297.0700.