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LTD Policy Issues Archives

"Own" vs "Any" Occupation in Long Term Disability Insurance Plans

Almost every Long Term Disability Insurance Policy I have ever reviewed contains a limited period (usually 24 months) of time that it will pay benefits if a claimant is unable to perform the duties of his/her "Own" (see prior post on how "Own" occupation is misleading) occupation. The plans most commonly contain a change in the definition of disability from "Own"occupation to "Any" occupation after the 24 month period runs. So, after 24 months the claimant must be able to establish that they are unable to perform the duties of "Any" occupation in order to continue to receive benefits. A few caveats-there is also usually a qualifier for "Any" occupation that the claimant may be qualified to perform the identified occupation by education, training or experience. There is also usually an earnings qualified that the identified "Any" occupation must usually pay some percentage (commonly 60 or 80%) of the claimants "Own" occupation.

The misleading nature of "Own Occupation"

I was recently asked to review a claim denial by a well know disability insurer for a nice lady who suffered a terrible crush injury to her foot. She had worked at a production facility where her job duties required her to be on her feet for extended parts of the work day. Her employer was not able to accommodate her standing restrictions so she filed a claim for LTD benefits with Lincoln Financial. The Lincoln policy defined her "Own Occupation" as a collective description of related jobs, as defined by the US Department of Labor Dictionary of Occupational Titles. It includes any work done for pay or profit, regardless of: 1. whether such work is with the employer, or some other firm...; or 2. whether a suitable opening is currently available with the Employer or in the local labor market."


As a follow up to the last post, the US Supreme Court sided with the Hartford Life and Accident Insurance Company enforcing its contractual limitations period. In Heimeshoff v Hartford Life and Acc. Insur. Co., ______S.Ct. _______ (2013). the Court concluded that:

SMDA Partner-Patrick Derkacz attends ACI Long Term Disability Insurance Conference

In my continuing effort to do the best job that I can for my Long Term Disability Insurance clients I attended that ACI Long Term Disability Insurance Conference in Boston this past week. For the the second year in a row that I have attended this conference I thought it was excellent. The seminar presenters were all top notch-clearly some of the best and brightest practicing in this niche area.


Colorada recently passed a law banning the use of discretionary clauses in any Long Term Disability insurance policy. This ban also applies to group policies. Colorado's new law reflects the same policy decision of the Michigan Insurance Commissioner.

The Importance of Occupational Definitions in Long Term Disability Policies

Most Long Term Disability policies only provide benefits for a limited time while the insured is disabled from his or her own occupation. This time period is known as the "own-occupation" period. Typically, it is easier for a policy holder to meet this definition of disability because he or she only need establish that they cannot perform the duties of a single occupation-their own. For instance, in a recent case we handled, a registered nurse who was in a serious car accident and suffered a back injury was found disabled because she could not stand on her feet for eight hours and had lifting restrictions that prevented her from assisting patients in and out of bed.

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