When clients come to us from Social Security disability, they often assume “disabled” means the same thing everywhere. It does not. For long-term disability insurance, “disabled” means whatever your policy says it means. Two people with the same back condition can win under one policy and lose under another, because the words are different.
So the first thing I do with any LTD case is find the definition of disability and read it word for word. Here is what you are likely to find.
The two tests: own occupation and any occupation
Most group LTD policies use one or both of these tests.
Own occupation. You are disabled if, because of sickness or injury, you cannot perform the material and substantial duties of your regular occupation. The question is whether you can do your kind of work, not whether you can do any work at all.
Any occupation. You are disabled only if you cannot perform the duties of any gainful occupation for which you are reasonably fitted by education, training, or experience. The insurance company no longer asks whether you can do your old job. It asks whether there is any reasonable job you could do.
The 24-month switch
Many group policies use both tests, one after the other. A typical sequence:
- Elimination period. You must be disabled for a set time, often 90 or 180 days, before benefits start. Short-term disability often covers this gap.
- Own-occupation period. For the first stretch of benefits, often 24 months, you qualify if you cannot do your own occupation.
- Any-occupation period. After that, you must show you cannot do any suitable occupation, usually until the policy’s maximum benefit age, such as 65 or your Social Security retirement age.
[GRAPHIC: a simple timeline of the three stages, labeled “elimination period,” “own occupation (often 24 months),” and “any occupation (to maximum benefit age).”]
The switch is one of the most dangerous points in a claim. The insurance company often reviews the file as the change approaches, and that review can end in a termination. Example: you are approved because severe back problems keep you from working as a nurse. At 24 months, the insurer decides you can do a sedentary office job and stops paying. More: Why approved claims get reviewed.
If you are approaching your 24-month mark, that is the time to make sure your medical records describe your limits in detail, not after the termination letter arrives.
“Your occupation” may not mean your job
This surprises people. Many policies define your regular occupation as it is normally performed in the national economy, not the specific job you did for your employer.
Example: a sales manager drives long hours, visits customer sites, and walks warehouse floors. The insurer looks up “sales manager” in an occupational database, classifies it as mostly desk work, and decides the claimant can still do it despite his walking and driving restrictions.
If your real job was more physical or demanding than its title suggests, document that. A job description from your employer and a statement from a former supervisor describing what you actually did can make the difference.
What “any occupation” usually requires
“Any occupation” rarely means literally any job. Read the definition for these limits:
- Education, training, and experience. The other occupation usually has to fit your background. An insurer cannot always point to a job you have no skills for.
- An earnings floor. Many policies require the other occupation to pay a set percentage of your pre-disability earnings. For example: you earned $100,000 a year, and your policy requires another occupation to pay at least 60% of that, or $60,000. Desk jobs paying $35,000 to $45,000 do not meet the definition, even if you could do them.
- Sustained work. The question is whether you can do the job reliably, full time, week after week, not whether you can sit in a chair for an afternoon.
The insurer often relies on a vocational consultant to name other jobs. That report is only as good as the restrictions and facts it was given. More: My insurer says I can do sedentary work and 5 reasons the insurer’s vocational report may be wrong.
Other definitions to look for
Your policy may also contain:
- Partial or residual disability. Some policies pay a reduced benefit if you can work, but only part time or at reduced earnings. If you are trying to work part time, read this provision before you do, and report the work as the policy requires.
- Specialty-specific own occupation. Some individual policies, often sold to physicians, dentists, and other professionals, define your occupation as your specialty and may pay even if you work in another field. Group plans rarely do this.
- Limitations on certain conditions. Many group plans limit benefits for mental health conditions, and some for conditions based mainly on self-reported symptoms, often to 24 months. More: The 24-month mental health limitation.
- Regular care requirement. Most policies require you to be under the regular care of a physician. Gaps in treatment can become a reason for denial.
Individual policies you bought yourself are often written differently from group plans, so do not assume the 24-month switch applies to you. More: ERISA plan or private policy?
How this compares with Social Security
Social Security asks whether you can do any work that exists in significant numbers in the national economy, considering your age, education, and work experience. There is no own-occupation period. That is why some people are approved for LTD in the first two years but denied by Social Security, and others are approved by Social Security but cut off by their LTD insurer at the switch. The two decisions use different rules, though each can be useful evidence in the other claim. More: Approved for SSDI: what happens to my LTD claim?
What to do now
- Get the full policy, not just the benefits summary. The definition of disability is usually in a section called “Definitions.” More: Get your policy before you file.
- Write down which test applies to you today, and the date the definition changes, if it does.
- Make sure your doctor’s records match the test. Under own occupation, the records should explain why you cannot do the specific duties of your occupation. Under any occupation, they should explain why you cannot sustain any full-time work: how long you can sit, how often you must lie down, how many days a month you would miss.
- Talk to a lawyer before the switch, not after the termination letter.
Not sure which definition applies to you, or approaching your 24-month mark? Call 770-351-0801 or request a free case evaluation. We will read your policy with you.
Related: Top 5 reasons LTD claims are denied · Short-term disability approved, why was LTD denied? · Why your doctor must describe limitations, not just diagnoses