Language in disability insurance policies can vary from being very favorable for the insured to being so unfavorable that even the severely disabled would have difficulty qualifying for benefits. Most disability policies, for at least some period of time, provide disability benefits in the event that the insured is not able to perform the substantial and material duties of their “own occupation” or “regular occupation”. The definition of “own occupation” can vary depending on the state where the policy is issued and the insurance company that issues the policy. Most people believe that their “own occupation” disability policy insures them in the event that they cannot perform the specific duties of their specific job at their specific employer, however, that is not always the case, and certainly not the case in some group disability policies issued by The Standard Insurance Company.

Standard Insurance can consider how claimant’s occupation is performed in the national economy

The Standard Insurance Company has a number of different disability insurance products; however, potential claimants should be warned that in at least one series of group disability policies, Standard can consider how the insured’s occupation is performed not just by them, but how it is performed by others in the national economy. This means that if the insured’s specific job requires medium physical demand, but somewhere in the “national economy” the insured’s job duties only require light physical demand, Standard may deny the claim if it determines that the insured’s disability does not prevent them from performing light physical demand work. In fact, a number of federal courts have recognized this distinction, and have proclaimed that Standard’s consideration of how the insured’s occupation is performed in the “national economy” is reasonable.

Federal Court finds that the Standard does not need to consider how insured performs his specific job, but rather, how their occupation is performed in the national economy

A federal court in Missouri determined that Standard could look beyond the specific duties performed by the insured, and consider how the insured’s duties are performed in the “national economy.”

Terry Carlson worked for Cargill as a Plant Operation Manager, and was a participant in the long-term disability plan sponsored by Cargill, which was insured and administered by Standard. In March 2011, Mr. Carlson submitted a long-term disability claim to Standard, claiming disability due to pain in both feet resulting from peripheral neuropathy (read more about peripheral neuropathy disability here). Standard denied Mr. Carlson’s disability claim and subsequent appeal. Shortly following his denials, Mr. Carlson sued Standard for payment of his long-term disability benefits.

In the lawsuit Mr. Carlson’s lawyers argued that Standard had disregarded favorable evidence from Mr. Carlson, his physicians and Mr. Carlson’s Human Resources Manager evidencing that Mr. Carlson was disabled from performing the duties of his specific occupation due to peripheral neuropathy which resulted in severe pain in both lower extremities. The federal court cited to several court opinions and in upholding Standard’s decision states that Standard was not limited to looking at the way that Mr. Carlson performed his job specifically and that Standard properly defined “own occupation” to mean a participant’s occupation as it is generally performed in the national economy.

Beware of group disability policies which allow the disability insurance company to look at the way your own occupation is performed in the national economy

An own occupation definition like the one in Mr. Carlson’s Standard disability policy is not uncommon in group disability insurance policies, and such policies are not limited to being issued by The Standard Insurance Company. Unfortunately, since group disability policies are usually provided through one’s employment, the employer selects the disability policy and is often completely oblivious to the unfavorable nature of this type of “own occupation” definition, and therefore rarely looks into policies with more favorable policy language. Usually policies with more favorable language are associated with higher premium payments, and the employer is simply trying to find insurance which will provide their employees with basic disability coverage at a low cost to the employer and/or employee. If this is the case then beware, because you can get what you pay for. Employees should not simply assume that the disability insurance provided through their employment is going to provide them with the financial assistance that they need in the event that a disability prevents them from performing their specific job. It’s important for insured’s to know the benefits that are provided through their disability insurance policies, and it is just as important to know the terms of eligibility and coverage are. This way the insured knows what they are paying for, and if they can elect a better employee benefit plan or purchase a better disability insurance policy privately on their own.

When filing a disability claim or challenging a disability insurance denial it is essential to consult with a disability insurance attorney that handles STD and LTD claims on a daily basis. Contact Attorneys Dell & Schaefer for a free consultation.