| April,
2005 HEALTH INSURANCE UNDERWRITER (N.A.H.U.)
DUAL
OCCUPATIONS
On
DI Claims
By
Arthur L. Fries
Individual
disability policies often provide both a total and a partial
(residual or proportionate) definition of disability.
As a result, things can get tricky at claim time. For
instance, telling your OB/GYN physician client that he
will be considered totally disabled if he can no longer
perform surgery or deliver babies, but that he can still
work in his office, might not fly as being defined as
a total disability if such a scenario developed later.
For Example, the insurance company may interpret the above
claim as one in which the insured is merely partially
disabled because the insured continues to perform duties
in the office and earn money. This is a very complicated
area and court decisions have varied by state and local
jurisdictions. Variation in policy language as to what
constitutes total disability - or what constitutes “substantial
and material” – can also affect decisions.
A “specialty letter” that explicitly recognizes
an insured’s occupation as a narrow specialty (such
as an invasive cardiologist), WHEN the policy was purchased
– and how the policy was marketed by the broker/agent/insurance
company or how the claim was submitted from a paperwork
standpoint – can also have an influence on how the
insurance company interprets the claim.
One
example of the “dual occupation” dilemma would
be the case of an orthopedic surgeon whose duties include
surgery, emergency surgery, “on calls” and
an office practice seeing patients related to orthopedics,
but not surgery. Let’s say that, because of past
heart attacks, he reduces his hours and stops performing
surgery and taking emergency calls. His reduced work schedule
consists solely of clinical and non-surgery orthopedics.
Should the insurance company consider this a total or
a partial disability claim?
The
answer is that it could go either way, although there
is a good deal of case law that might substantiate total
disability. The insurance company will take into consideration
how much surgery and on calls the orthopedic surgeon performed
prior to the disability (by obtaining medical billing
code numbers, etc.) and look at the pre-disability earnings
compared to the post-disability earnings in various areas.
To
further complicate matters, let’s assume this claimant
taught once a week at a local university for a full day
and was paid a salary for this efforts. Could this change
the way the definition of disability was considered and
determined? How old the claimant is and whether the benefit
is paid to age 65 or life can also influence the decision.
In
the above example, if the orthopedic surgeon was age 58
with a lifetime benefit (if disabled prior to age 60),
the insurance company may very well want to “push”
the insured into a partial claim in order to only pay
benefits to age 65 rather than for life (which could be
for another 15-20 years or more).
Those
who sell disability insurance must use caution in explaining
how they “think” a claim will be paid, and
qualify any answer indicating that the decision will ultimately
be made by the insurance company, NOT by them.
Art
Fries is a longtime NAHU member, as successful DI producer
and a professional disability claims consultant. Now living
in Newport Beach, CA. He can be reached at 800-567-1911
or visit www.artfries.com.
_____________________________________________________________
A
longtime NAHU member, Art Fries is a disability claims
consultant. He was formerly a high-volume personal producer
of disability income coverage almost exclusively to attorneys.
He can be reached at 800-567-1911. For information abut
selecting a DI claims consultant, visit www.afries.com
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