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The insurance policy clauses requiring special concern

The insurance policy clauses requiring special concern

As any NY disability lawyer will tell you, you should read and become familiar with your entire plan document, as well as the SPD of the Plan. Pay close attention to the following clauses:

Definition of Disability

  • All disability plans provide a definition of disability. To be eligible for benefits, you must be totally disabled within the meaning of the definition in the plan. Common definitions are: Own Occupation; Any Occupation by Reason of Education, Training and Experience; and a Hybrid Definition. How the term “disability” is defined is often the determinative factor for the award benefits.
  • Own Occupation — this is the best definition. Under this definition you are totally disabled if you are unable to perform the material duties of your own or regular occupation. This means your occupation as performed in your local economy, it does not mean your own job at your own company. Therefore, you must establish that your symptoms prevent you from performing your occupation as it would be commonly performed at not only your employer, but at other similar employers.
  • Any Occupation by Education, Training and Experience — under this definition you are totally disabled if you are unable to perform the material duties of any occupation to which you are qualified by reason of education, training or experience. To satisfy this definition, says a NY disability attorney, you have to demonstrate not only that you cannot do your regular job, but that you cannot do any other job to which you are qualified. It is more difficult to satisfy this definition because it opens up a universe of other jobs from which you must establish that you are disabled. A NY disability lawyer will be able to help you through the process of establishing disability.
  • Hybrid Definition — Most disability insurance policies today use a hybrid definition that changes after two years. For the first two years, you will be totally disabled if you are unable to perform the material duties of your own or regular occupation. After two years, the definition of disability often changes to any occupation that you are qualified for by education, training and experience. Therefore, after two years, your claim will be re-reviewed by the insurance company and you will be required to submit a higher level of proof in order to continue receiving benefits. Any higher level of proof in this regard will no doubt entail its own legal ramifications. A NY disability attorney can help you decipher all of this, and continue representing you through this process.

Time Limits

  • Most disability plans provide time limits for applying for benefits. These must be strictly followed. In numerous instances, Courts have affirmed a denial of benefits based entirely on the fact that the time limit was not followed. Check your policy carefully for the time frames in which “Notice of Claim” and “Proof of Claim” must be submitted.
  • Disability plans also provide time limits as to when an internal appeal has to be submitted in the event benefits are denied. Again, these limits should be strictly followed. The more strictly they are followed, the better, as any NY disability lawyer will tell you. Because most plans give you only 180 days to submit an appeal, once you receive a denial of benefits, you must act quickly.
  • Disability plans also frequently contain a time limit as to when a lawsuit must be filed in Court. Many courts have enforced these limitations. They too should be strictly followed.

Elimination Periods

  • Most long term disability plans provide for an elimination period. The elimination period is simply the waiting period before you are eligible for benefits under the plan. Typical elimination periods are either 90 or 180 days. For example, if you become disabled on January 1, you will be eligible for benefits 90 or 180 days later, provided you remain disabled. If you recover from your disability during the elimination period you will not be eligible for any benefits under the long term plan. This will make it difficult for your NY disability attorney to help you go after benefits because you may no longer be qualified for them.

Offset Provisions

  • Most employer-provided disability plans provide for offsets for certain “other income.” What this means is that your monthly benefit will be reduced by your other income. In other words, if the plan would normally pay you a benefit of $2,500 per month and you receive Social Security Disability Income Benefits in the amount of $1,500 per month, the plan will only pay you $1,000 per month. Other income may include workers compensation benefits, social security disability benefits, retirement benefits, money received from a third-party lawsuit, money you receive from a personal insurance policy, and money you earn for any work you do while disabled from your job. The policies of many insurers require you to apply for all these other benefits.
  • Most personally held insurance policies do not have offset provisions.

Mental and Nervous Limitations

  • Many disability plans place a two-year limitation on benefits to individuals who are disabled by mental and nervous disorders. Under these provisions, benefits will stop after two years even if you remain totally disabled.
  • Many insurers take advantage of this provision and try to characterize your otherwise physical disability as a mental and nervous disability. This is often done with individuals who have Chronic Fatigue Syndrome. Some insurers try to characterize the symptoms of CFS as the symptoms of depression.
  • Beware of this trap. If you have a physical disability and are also depressed as a result of being disabled, make sure your doctor clearly indicates in his letter that you are depressed secondarily and as a result of your physical disability. If the depression is put down merely as a second reason for your disability, you may find that the insurer invokes the two-year limitation. Of course, a NY disability lawyer will advise you in further detail regarding how this applies to your situation.

Partial Disability

  • Many disability plans contain provisions providing benefits in the event you are only partially disabled. These provisions vary greatly. Often, you are partially disabled if you can do your job on a part-time basis or if you can work at a full-time job (other than your own) at less pay. The plan will contain a formula describing how your benefit will be calculated.
  • One of the consequences of having a plan that includes partial disability benefits is to limit the instances in which you are entitled to total disability benefits. For instance, if your plan does not have partial disability benefits, you would be considered totally disabled if you could not work full time (even though you could work part time). On the other hand, if your plan has partial disability benefits, you may only be entitled to partial disability benefits. Partial disability benefits are always less than total disability benefits.


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