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Disability Insurance: Why the Policy Definition of Disability Matters

Tucker Law Group
August 26, 2017

Disability Insurance Policies are Like Rule books…And Rules Matter

Rules matter. No matter what game you are playing, the rule book is what controls the game. Unfortunately, insurance companies think about disability insurance policies like a game. They write their disability insurance polices with rules that help them. You have to know those rules if you are filing a Long Term Disability insurance claim. Perhaps the most important of those rules is the definition of disability.

The Definition of Disability in Your Insurance Policy Controls Your Disability Claim

Your disability insurance policy will contain a definition of what it means to be disabled. Very often you will find this in a separate section of the policy titled “Definitions.” However, it does not have to be in a special definitions section. It might be in a different section with a title like, “When We Will Pay Disability Benefits.”  Very often, you will notice that the term “disabled” or “totally disabled” is in bold. That indicates there is a separate definition in the policy.  You have to look through the entire policy to see how the insurance company has defined what it means to be disabled.

So why is it important to know the definition of disability? As indicated above, the insurance company is using the rules in their favor. You want to understand those rules to qualify for disability benefits under the policy. How your insurance company has defined disability can mean the difference between being paid LTD benefits and not being paid benefits.  If the definition of disability is “inability to perform the substantial duties of your occupation,” you must prove you cannot perform the substantial duties of your occupation. The word substantial may even be defined in the policy. Compare that to another definition, such as: “inability to perform the material duties of your occupation and sustain an earnings loss of at least 20%.” The second definition not only means that you have to be unable to do the duties of your job, but you also have to be limited enough where you cannot earn more than 80% of what you were earning before.

Why a Doctor’s Note That Says You Cannot Work is Not Enough

Just because a doctor states that you should not be working does not mean that you are disabled under your disability insurance policy. Instead, the insurance company will be looking at the rules and definitions that are written into the disability insurance policy. If you cannot meet the definition of disability, it does not matter what your doctor said. Very often, doctors have no idea what the definition of disability is. They are giving a vague statement that you are not able to work when they do not even know what the duties of your job are. You must prove what is required under the policy.

Common Definitions of Disability In Disability Insurance Policies

Nearly all modern disability insurance policies define disability in a way that is somehow related to your inability to perform some or all of the “substantial and material duties of your occupation.” Those duties are typically the ones that you could not leave out of the job and still consider it to be the same job.  In other words, the key duties that actually make up what you did before you became disabled. Doctors rarely understand this, but you must be in a position to prove to the insurance company why you cannot perform those duties.

Knowing What You Have to Prove to Get Disability Insurance Benefits Can Help You Win Your Claim

Some disability insurance policies require you to prove that you cannot perform every single one of those duties because of your disability.  Others will pay disability benefits if you are unable to perform just one of those material duties. Sometimes they are written in a very vague way where you cannot tell if they require you to be unable to perform one or all of the material duties of your occupation.  In that situation, you may even want to ask the insurance company what they are going to require. Reading your disability policy before you have to stop working will help you understand what you have to prove. That is very often a good idea when you have a chronic illness that is deteriorating your abilities over time. Unfortunately, an injury that comes out of the blue can put you in a situation where you are trying to understand your insurance policy soon after you came disabled, not before it happens. In either situation, understanding what it takes to prove that you are disabled is crucial to understanding if you are going to get disability benefits coming into your house to pay your bills.

If you have questions about your disability insurance policy, call one of our experienced disability insurance attorneys at (866) 233-5044 or contact us online.