While insurance policies differ in many respects, there are certain terms
and conditions that are typically present in most policies. The specific
language in these terms may vary from policy to policy, however, the concepts
underlying these coverage terms are frequently litigated issues in claims
A. Own occupation
Under most group policies, disability is initially determined on the basis
of the claimant's own occupation. This is usually only for a limited
period of time and then disability is determined on the basis of "any
occupation." Many group policies today define one's own occupation
as that which is generally performed in the national economy as opposed
to the claimant's particular job. A claimant should be aware that
insurance companies may use overly generalized or inaccurate job descriptions
in evaluating the physical and mental demands of their particular occupations.
Thus, care should be taken in the claim process to ensure that the insurance
company utilizes correct occupational descriptions to evaluate your disability
B. Any occupation
After a specified period of time (such as 24 months), most group policies
require a claimant to be disabled from "any occupation" to be
entitled to further disability benefits. Most policies define "any
occupation" as one that the insured could reasonably engage in view
of his or her "education, training, or experience." In making
this determination, the insurance company may utilize a "vocational
analysis" to determine the transferable skills that you may use in
a different occupation. When this occurs, we often arrange to participate
in a vocational assessment completed by a vocational rehabilitation counselor
of our choosing.
C. Education, Training and Experience
Most policies and California common law specify that in determining whether
one is disabled from "any occupation" the insured must take
into consideration the insured's education, training and experience.
If the benefit claim is denied on the basis that the insurer may engage
in an alternative occupation, one should evaluate whether the designated
occupation is truly comparable in view of the insured's "station
(1) Comparable earnings. In many instances, the insurance company may identify an alternative occupation
that pays substantially less than the insured's former occupation.
If this occurs, the insured may have grounds for asserting that the identified
alternative occupation is not suitable in view of his education, training
(2) Age Limitations. This is an important issue to be considered under the "any occupation"
tier. In those cases where a claimant is over 50, the issue of whether
he or she can actually perform a certain job based upon their age should
always be considered. This is a fact based analysis and can be accomplished
by conducting a local market review.
D. Other limitations
Most policies also contain other benefit limitations or exclusions that
pertain to particular disabilities. Some of these provisions, such as
a pre-existing condition exclusion are grounds for denial of the claim.
Other provisions, such as the mental/nervous limitation do not operate
as a total bar to benefits, but substantially limit the period of time
in which an insured may receive benefits under the policy. As might be
expected, insurance companies may incorrectly classify a disability so
as to limit their liability for an otherwise legitimate claim.
(1) Pre-existing Conditions.
Under most policies if, during a specified period of time just prior to
coverage, a claimant received medical treatment or consultation either
for or related to their disability, then the disability will be excluded
from coverage. Frequently, policies go even further to include situations
where a claimant did not actually seek treatment or consultation with
a medical provider, but, rather, just experienced symptoms that would
have caused "a reasonable person to have sought medical treatment
(2) Self-Reported Injuries.
Many policies, especially the more recent ones, also contain a provision
limiting coverage for any disability due to a sickness or injury which
is based on "self-reported symptoms." These disabilities are
those that cannot be quantified or documented by objective medical testing
such as x-rays, MRI's, blood tests, etc. If this limitation is being
applied to you, the important issue is to determine whether their disabling
condition can be independently verified either by testing or by some other
means. This question should be directed to your treating physician(s),
and if their answer is in the affirmative, you need to ensure completion
of the verification technique identified, and then submission of the verification
to the insurance company. You should also be aware that certain courts
have found that the disabling conditions of Fibromyalgia and Chronic Fatigue
Syndrome may not be subject to this provision.
(3) Mental/Nervous Condition.
Similarly, policies frequently limit coverage for a limited period of
time for any disability caused by or related to a mental/nervous condition.
The two main issues involving this limitation relate to what is properly
deemed a mental/nervous condition and whether the policy contains a definition
for "mental/nervous condition."
(a) What is Properly Deemed a Mental/Nervous Condition. How is the provision set forth in the policy? If the language is limiting,
such as "disability due solely to a mental/nervous condition,"
then it can only be invoked when your disabling condition is due solely
to the mental/nervous condition. If however, the policy states that the
limitation will be applied if the condition is "caused by or resulting
from" or "caused or contributed by," the mental/nervous
condition then the limitation may be applied in situations where "mental/nervous"
conditions are appropriately defined.
(b) The Policy Definition of a Mental/Nervous Condition. If the policy limits coverage for disabilities "caused or contributed
by" mental/nervous conditions, it should also contain an appropriate
definition of the term "mental/nervous condition." A proper
definition should indicate whether one is to look at the cause of the
disability, its symptoms, the form of treatment or all of these factors combined.
(4) Residual (partial disability) benefits.
Many policies contain a provision allowing for the receipt of benefits
when a claimant is disabled but continues to work. This provision is referred
to as a residual disability benefit. It always requires that the claimant
suffer an actual reduction in monthly income (usually at least 20%) due
to the disability. It may also require that the claimant experience a
reduction in the amount of hours he or she can work. If you make such
a claim and qualify for residual benefits, you will need to review the
policy to determine the proper amount of benefits. Frequently, the calculation
of benefits under a residual disability provision is performed differently
then that for total disability benefits.