LTD: Any Occupation vs Own Occupation Coverage

April 4, 2024 | J. Price McNamara
LTD: Any Occupation vs Own Occupation Coverage
LTD: Any Occupation vs Own Occupation Coverage

If you need to file a claim under a long-term disability insurance policy you obtained through your employer, you need a dedicated ERISA lawyer who understands the difference between any occupation and own occupation coverage.

If you have a claim, an experienced long-term disability lawyer can explain how the difference can affect your ability to receive benefits if you become disabled and cannot work.


What Is Long-Term Disability Insurance?

Long-Term Disability Insurance

Long-term disability (LTD) insurance helps replace your income if you can't work long because of an injury, illness, or other medical condition. It acts like a safety net to provide money if you become disabled and cannot do your duties.

With LTD insurance, you typically have to go through a waiting period of several months before the benefits kick in. During this time, you may receive coverage from things like sick leave or short-term disability insurance provided by your employer. But once that runs out, LTD insurance can provide you with income for an extended period.

Many employers offer group LTD insurance plans as part of employee benefits packages. These policies cover a group of people, like all the workers at a company. The employer usually pays part or all of the premium costs.

In addition to employer-provided LTD coverage, some people purchase their private long-term disability policies directly from insurance companies. This can provide extra income protection beyond what an employer plan offers.

Whether it's through work or a private policy, the idea behind LTD insurance is the same - to protect a portion of your income if you suffer a disabling event that prevents you from working for a long time. Without it, you can face serious financial hardship from having little or no income.

The waiting period, benefit amount, and duration of payments can vary quite a bit between different LTD policies. That's why you must carefully review your coverage with an ERISA lawyer. Taking the time to learn the ins and outs can help ensure you have the right income protection in place should the unexpected occur.

Any Occupation Coverage

Any occupation coverage is a more restrictive type of LTD policy. With this coverage, you will only receive benefits if you cannot work in any occupation for which you are reasonably qualified based on your education, training, and experience.

For example, let's say you work as a surgeon. You develop a hand tremor that prevents you from performing surgery. Under any occupation policy, the insurance company can deny your claim for benefits if they determine that you can still work in a different job, such as a medical administrator or teacher.

Own Occupation Coverage

Own occupation coverage is a more generous type of LTD policy. With this coverage, you will receive benefits if you cannot perform the duties of your occupation, regardless of whether you can work in a different job.

Using the same example above, if you have your occupation coverage and develop a hand tremor that prevents you from performing surgery, you will likely be eligible for benefits, even if you can still work in a different occupation, such as a medical administrator or teacher.

The Importance of Understanding Your Coverage

The type of coverage you have can drastically impact your ability to receive benefits if you find yourself where you cannot work due to a disabling condition. Many employers offer group LTD policies as part of their benefits package. These policies often come with any occupation coverage. This sets a higher bar for qualifying for benefits.

With an any occupation policy, the insurance company will evaluate your claim based on your ability to perform not just your current job but any job that aligns with your education, training, and work experience.

This means that even if you can no longer carry out the duties of your specific occupation due to a disability, the insurance company may deny your claim if they determine that you can still work in a different role or field.

For instance, imagine you are a skilled carpenter. You have worked in the construction industry for decades.

If you develop a severe back injury that prevents you from performing the physical labor required in your trade, an insurance company with an any occupation policy may argue that you can still work a desk job or pursue a career that doesn't involve manual labor.

In this scenario, the insurance company can deny your claim for LTD benefits even though you cannot continue working in your chosen profession.

Own occupation coverage offers a more favorable scenario for claimants. With this type of policy, you only need to demonstrate that your disability renders you incapable of performing the essential duties of your current occupation. The insurance company cannot deny your claim because you can work in a different job or field.

Using the previous example, if you had an own occupation policy as a carpenter, your claim will likely be approved if your back injury prevented you from carrying out the physical demands of your job, regardless of whether you can potentially work in a passive role.

Many people mistakenly assume that their employer-provided coverage is adequate, only to realize too late that the any occupation clause creates a substantial obstacle to receiving benefits. You should always review your policy documents carefully. Seek clarification from your employer or insurance provider if you are unsure about your coverage type.

Additionally, consult with a knowledgeable disability attorney. A long-term disability lawyer can provide valuable insights and guidance to ensure you are fully aware of your rights and the potential challenges you may face during a disabling condition.

Factors to Consider

When evaluating LTD coverage, consider several factors, including:

The Qualifying Criteria

One of the most important aspects of your LTD policy is how it defines disability and the specific criteria you must meet to qualify for benefits. Insurance companies often have definitions that can vary significantly from policy to policy.

Try to thoroughly review and understand the definition of disability in your policy with an ERISA lawyer. This will determine whether your condition meets the threshold for receiving benefits.

Some policies may have a stricter definition that requires you to not perform the duties of any occupation. Others may have a more lenient definition that focuses on your inability to perform the duties of your occupation.

Additionally, the definition may change over time, with different criteria applied during the initial benefit period versus the later stages of your disability.

Benefit Amount

LTD policies typically replace a portion of your pre-disability income, ranging from 60 percent to 70 percent. However, you need to understand how your policy calculates the maximum benefit amount it provides.

Some policies may have a fixed maximum benefit amount. Others may calculate benefits based on a percentage of your pre-disability earnings up to a certain cap.

Consider any additional sources of income you may receive, such as Social Security Disability Insurance (SSDI) or workers' compensation benefits. These may offset or reduce the amount you receive from your LTD policy.

Understanding the benefit amount and its determination can benefit you, enabling you to plan accordingly and ensure sufficient income replacement in the event of a disabling condition.

Benefit Duration: Temporary or Lifetime Coverage

LTD policies can vary significantly regarding the duration of benefits they provide. Some policies may have a maximum benefit period of two years or until you reach retirement age. Others may provide benefits for life or until you recover from your disability.

The benefit duration of your policy can significantly impact your long-term financial planning. If your policy has a limited benefit period, you may need to explore other income sources or adjust your retirement savings plan. A policy that provides lifetime benefits can offer greater financial security in the event of a permanent disability.

Exclusions and Limitations

Carefully reviewing the exclusions and limitations section of your LTD policy is wise. You need to comprehensively understand what is and isn't covered. Many policies may exclude certain conditions or limit coverage for specific types of disabilities, such as mental health or pre-existing conditions.

Pre-existing condition clauses, for example, may exclude coverage for disabilities related to conditions you had before your policy's effective date or during a specified look-back period. Mental health limitations may cap the duration of benefits for disabilities related to mental illness or place stricter criteria for qualifying for benefits.

Understanding these exclusions and limitations can support you as you make informed decisions about your coverage needs and potentially explore supplemental insurance options if necessary.

Cost: Evaluating Premiums and Coverage Levels

If you're considering purchasing a private LTD policy or evaluating your employer-provided coverage, compare the premiums and coverage levels offered by different insurers.

Premiums can vary significantly depending on:

  • Age
  • Health status
  • Occupation
  • The level of coverage you desire

When comparing policies, carefully evaluate the benefits, exclusions, and premium costs. A lower premium policy may seem attractive. However, it may also have more limitations or a lower benefit amount.

Conversely, a higher premium policy may offer more comprehensive coverage and higher benefit payouts, potentially making it a more worthwhile investment in the long run.

Considering the financial stability and reputation of the insurance company you're evaluating is crucial. It directly affects their capacity to honor claims and deliver consistent service.

Researching customer reviews and assessing their track record can provide valuable insights into their reliability and trustworthiness. Making an informed decision about your insurance provider can safeguard your financial interests in the long run.

Appealing a Denied Claim

Appealing a Denied Claim

Receiving a denial for your LTD claim can be disheartening and overwhelming. However, you have the right to appeal the decision. Insurance companies may deny claims for various reasons, ranging from insufficient medical evidence to misinterpreting policy terms. However, a denial does not mean the end of the road.

When appealing a denied claim, you must follow the proper appeals process outlined in your policy documents. Failing to adhere to the specified procedures and deadlines can jeopardize your chances of a successful appeal.

Carefully review the appeals section of your policy with an ERISA lawyer. Note any time limits or specific requirements for submitting additional documentation or evidence.

A disability attorney can gather and provide any additional medical or vocational evidence that supports your claim.

This may include:

Building a comprehensive and well-documented case is key to demonstrating the extent of your disability and its impact on your ability to work.

Consulting with treating physicians and other medical professionals can be valuable during appeals. They can provide detailed explanations of your condition, the limitations it imposes, and why you cannot perform the duties of your occupation. Their professional opinions and objective assessments can carry significant weight in the appeals process.

If you are dealing with complex or high-stakes claims, seek the assistance of a disability lawyer who handles LTD claims. A long-term disability attorney can walk you through the appeals process and aid in your understanding of your disability insurance policy.

Appealing a denied claim can be a lengthy and complex process. It requires persistence and determination. Insurance companies may initially deny claims, hoping claimants will accept the decision and move on.

However, by following the proper appeals procedures, providing comprehensive evidence, and seeking legal assistance, you can increase your chances of receiving the benefits you deserve under your LTD policy.

Contact a Long-Term Disability Attorney

If you have questions about your LTD coverage or need assistance with a denied claim, consider consulting with a ERISA disability lawyer with extensive experience in dealing with insurance companies.

A lawyer can help ensure that your rights are protected and that you receive the benefits you are entitled to under your policy.

Don't hesitate to seek legal representation if you believe your LTD claim has been unfairly denied or need guidance in understanding the terms and conditions of your coverage.

Your financial stability and well-being may depend on it. Contact a law firm near you today for a free consultation to protect your rights and explore your options.


J. Price McNamara Author Image

J. Price McNamara


Losing my own brother, then my father and sister after long, disabling illnesses just a few months apart drove a career change for me. Before that experience, I never truly understood the place you’re in. I never understood the dramatic impact that receiving (or not receiving) the disability and life insurance benefits you paid for and counted on can have on your life especially when you need to focus on family and healing. What I experienced with my own family now drives the way I view my clients and my work, and I will never forget it!

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