Disability Insurance: Own Occupation Protection for Less than Two Years

Almost all standard disability insurance policies will pay benefits for two years if you are disabled from your OWN occupation—that is the job you held at the time your disability started. It is assumed that, if you are only disabled from your “own occupation” that two years is enough for you to start a new job, even if that means you have to go through some additional training or education to be hirable. In order to keep your benefits after two years you would need to prove that you are disabled from working in ANY occupation.

An example of how the two-year limit would apply is if a warehouse worker—whose job includes lifting up to 50lbs every day—has a back injury that prevents him from lifting more than 10lbs. Although he is disabled from all jobs that require heavy exertion, he is capable of performing sedentary work. He has two year to find—and to be sufficiently trained to perform—a new job.

While almost all policies cover their insured for two years of “own occupation” protection, beware of those that offer less than two years of protection.

In many cases—because ERISA does not allow any form of punishment for wrongful termination of benefits beyond award of attorney fees—insurance companies will rush to terminate benefits when the “own occupation” period is up without considering whether the claimant is ALSO disabled from “any occupation.”

A six month “own occupation” coverage period is simply not long enough for most people to, on top of dealing with their disability, find and then be hired in a new occupation. Six months is also not enough time for most people to put together the documentation needed to prove that they are still disabled under the “all occupation” period.

Several years ago we represented a client who was disabled because he had lost the use of both arms. He was paid for two years of disability benefits because—clearly—he was disabled from his job. However, as soon as his “own occupation” period was up, his insurance company immediately terminated his benefits, saying, “We found a job you are not disabled from!”

They had found a telemarketing job 80 miles away that used automatic dialing and voice recognition capabilities. The only open shift was from 11PM to 7AM. Our client who, mind you, had no use of his arms, could not drive a car. How was he supposed to get to a job eighty miles away?

But, true to form, the insurance company did not worry about that. They had paid him benefits for two years longer than they had wanted and this unfeasible job, coupled with his claim status change from the “own occupation” to “any occupation” period, gave them the excuse they needed to terminate his benefits.

We appealed, of course, and eventually got his benefits reinstated, but he had to go several months without the disability benefits he relied upon to meet his daily needs. It is painfully unfair that the switch from “own occupation” to “any occupation” is regularly used as an excuse insurance companies can use to terminate benefits.