Long term disability policies frequently have two different definitions for disability. The first provides benefits if one is unable to perform their “own occupation.” To determine benefits under these criteria, the carrier often looks at the “material and substantial duties” of the insured’s occupation and whether the insured can perform those duties with his or her restrictions and limitations.
After 24 months, the criteria often change to whether the insured can perform “any occupation” for which he or she is suited by education, training and experience. Most, but not all policies, also expressly include “station in life” criteria. This means the carrier must also consider the insured’s prior earnings and any alternate occupation identified by the carrier must pay earnings commensurate to the insured’s prior occupation.
We frequently see carriers terminate benefits at the “any occupation” phase of the Plan based on mythical occupations. For example, Hartford has terminated benefits for our clients, stating that the insured can be a “Lens Inserter” or a “Jacket Preparer.” The carriers take the position that it does not matter if the job actually exists in the national economy. Since the occupations are identified by the outdated Dictionary of Occupational Titles, the carriers believe that they are suitable alternative occupations.