collecting disability

Submitted by Anonymous (not verified) on Sat, 11/17/2012 - 03:53

In 2005, I purchased a disability policy while I was working as a CPA. I subsequently quit my job to follow my dream of being a chef. Unfortunately, I injured my back, and I can no longer work as a chef.

My old CPA firm is willing to hire me again. If I take a job with them, am I still able to collect on my disability policy?

Posted: 18 Nov 2012 04:11 Post Subject:

It depends on what your policy's definition of disability is.

Posted: 19 Nov 2012 12:58 Post Subject: policy definitions for disability

Sorry, didn't get you.. How policy definitions differ disability and how that will decide whether or not the OP will collect benefits?

Posted: 19 Nov 2012 03:32 Post Subject:

The primary "definitions" of disability are "OWN OCCUPATION" (if you cannot perform the principal duties of your work) and "ANY OCCUPATION" (you cannot perform the duties of any occupation for which you may be suited by reason of education, training, or experience). Each of those definition are quite different. Some "OWN OCC" policies change the requirement for continuing disability to "ANY OCC" after 24 months of continuous disability.

Without seeing your policy, there is no way to give you an answer to your question.

Posted: 19 Nov 2012 06:36 Post Subject:

"OWN OCCUPATION" The definition doesn't change after 24 months.

Posted: 24 Nov 2012 12:10 Post Subject:

I'll give Max a chance to answer. Maybe he'll get this one right.

Posted: 24 Nov 2012 12:47 Post Subject:

Why don't you break from tradition and actuall offer an answer, Mr. Knows-it-all-but-keeps-it-to-himself?

But, from a fresh 7th Circuit federal court case comes these opening words outlining the case in Raybourne v CIGNA Life Insurance Co of NY:

Raybourne was a quality engineer for 23 years. The employer provided a long-term disability plan that paid benefits for up to 24 months if disability prevented him from performing the duties of his regular job. After 24 months, the plan paid benefits only if he was unable to perform all material duties of any occupation for which he was reasonably qualified.

I realize that not all OWN OCC disability policies work this way, but the fact that some do, is proof enough. It's a reasonably common thing.

You also find exactly the same definitions of disability in life insurance Waiver of Premium riders in whole life and term policies (Waiver of Monthly Deduction in UL and VUL) -- 24 months of OWN OCC following by ANY OCC as the continuing definition to be eligible for the benefit.

Posted: 24 Nov 2012 12:02 Post Subject:

Max, your post is irrelevant. Primarily, this is because it is obvious that Hal has an individual policy. If he had an employer sponsored group policy, he would have lost it when he quit his job.

The fact that some policies work a certain way is proof enough for what?

He also told you that that there is no definition change after two years.

When you admit that you don't know the answer, I'll gladly answer the question.

Posted: 26 Nov 2012 10:50 Post Subject:

Ok, we aren't going to get an answer from Max because he can't admit when he doesn't know something

Hal, what Max was missing is that there are two different types of "own occupation" coverage even when the definition doesn't change. There is "true own occupation" coverage and "modified own occupation coverage".

If the contract has a modified own occupation coverage definition, you won't be able to collect on your policy when you go back to do accounting work. This is because the definition is about not being able to work in your occupation AND not working in another occupation.

If the contract has a true own occupation definition, you should be able to collect. This is because:

1)It is irrelevant that your original occupation was a CPA. Disability is based upon what you were doing at claim time. Your occupation is chef.
2) There is no "and" in the contract language. If you can't be a chef with a true own occupation contract, you can collect even if you can earn more money doing something else.

Posted: 27 Nov 2012 01:41 Post Subject:

Imagine that . . . you posted an answer. Of course, my original comment that without seeing the contract it was not possible to know because SOME own occ policies change the definition of disability after two years still stands.

You cannot give a definitive answer to the question either, because you don't know what the policy says. Whether its a "true" or "modified" or an "own/any" policy. It might not even be a lifetime benefit contract.

Posted: 27 Nov 2012 11:52 Post Subject:

So what if it is lifetime benefits or not. This won't impact his ability to collect for whatever duration is available. He told us that the definition doesn't change.

While it is true that we don't know enough to tell him whether he can collect or not without seeing the contract, we know enough that the only way for him to collect is if the contract has a true own occupation definition.

Posted: 27 Nov 2012 07:48 Post Subject:

The company is guardian.

Posted: 28 Nov 2012 05:13 Post Subject:

And what does your contract say about the definition of disability, the duration of your benefit, and is there any discussion of a change in the qualifications for benefits over time?

Posted: 28 Nov 2012 10:26 Post Subject:

He already told us that the definition doesn't change.

Guardian contracts sold to CPAs have a true own occ definition of disability that does not change.

The ability to purchase the contract is based upon what the person is doing at the time of application (CPA). Collecting on the contract is based upon what the person was doing at time of claim (Chef).

If his disability stops him from being able to be a chef, he is totally disabled. He can then work as a CPA. His income from being a CPA will have no impact on his disability benefit.

If Hal has this typical Guardian white collar contract, he may have just hit the financial home run of qualifying as totally disabled while earning his income.

Posted: 05 Dec 2012 05:08 Post Subject:

Thanks. My agent agreed that I can work as a CPA and collect the benefit. This is awesome!

Posted: 06 Dec 2012 12:26 Post Subject:

This is a prime example of why disability insurance must be purchased on the basis of contract and not price. It is only a true own occupation contract that will allow for one to collect based upon the given facts. These are only offered by very few companies and with most of those it is only offered as a rider.

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