How They Fight the Claim
Own Occupation, Regular Occupation & Your Occupation
Facing heavy competition and lowering sales, in the late 1980s and 1990s disability insurers began specifically targeting highly compensated professionals to sell policies. After all, these people are typically highly trained with specialized skills, and their substantial incomes needed to be protected in the event of a disability. Thus, there was a genuine need for this product and the premiums would be quite appealing compared to the white-collar insureds that had previously formed the core of Individual Disability Insurance (“IDI”) business.
This was what led to the introduction of specialty policies and riders that insured the ability to perform specific occupations, such as cardiac surgeon versus physician or even cardiac surgery professor, rather than just the general ability to perform the work of any occupation. These policies guaranteed that professionals could continue to work in any other occupation and still receive full disability benefits. The thought was that these types of persons would want to work in some capacity, but they would not want to be required to kill themselves trying to maintain their family’s standard of living by working every hour in some occupation other than the one they had devoted their lives to. These provisions come in many forms, but they normally involve some variation of the words “own occupation,” “regular occupation,” or “your occupation.”
The Bubble Burst
These new provisions allowed the insurance company to undergo a continual boom, showing steady increases in profits and sales for around 25 years. The companies increasingly attempted to one-up each other by lowering premiums and adding in newer, more insured-favoring terms. The underwriting on these policies was not sound, and the canary in the coal mine became evident in the ’90s. The ’90s were a disaster for disability insurers, with insurers leaving the market in droves and each year bringing further losses.
The remaining disability insurers weathered the storm in many ways. Some engaged in systematic bad faith claims handling practices that landed them on Dateline and the subject of investigations by each state’s insurance departments. Other insurers simply started coming up with new interpretations of the policies they sold years ago or began attempting to get insureds to take lump-sum payments that were far smaller than what the insurer would have been required to pay under the policy. There were no appealing options to the insurers because they had painted themselves into a corner. Regardless of the insurer, there is a significant danger that anyone with these policies will have their claims denied wrongly because the insurer has decided to not make good on its promises from decades ago.
Part of our core practice is helping professionals like doctors, lawyers, engineers, and executives obtain the benefits of the safety net they were promised. These insurers typically operate under the same playbook when trying to drum up reasons to deny claims, and we have seen them all. If you believe that an insurer is planning to deny your claim or you want a free consultation regarding advice on how to proceed with a claim, please do not hesitate to contact us.
Insurers typically place a number of procedural and legal traps for the unwary insured, so please do not attempt to navigate this process by yourself. They have been doing this for decades and have teams of lawyers and staff looking to create a record to justify denying your claim. Regardless of whether you seek our assistance, please review your policy and all communications you have received since its purchase. It is also important to retain any advertisements or other materials you reviewed prior to purchase.
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