Total Disability is Not a Total Disability
For physicians, buying the best possible disability insurance coverage is essential in order to protect their most valuable asset – their ability to earn an income. Yet, buying a policy and simply filing it away until a situation arises when you might need it can be huge mistake if you haven’t studied the policy language. This is especially true in understanding when a “total disability” might not be a total disability, a key distinction clouded by the ambiguous language found in many physician disability policies.
Physicians are always advised to buy a disability insurance policy that includes the broadest definition of what constitutes a disability. Polices with an “own occupation” or “own-specialty” definition of disability provide the most complete protection because they define total disability as the inability to perform the specific duties of your occupation or specialty. So, for example, if a surgeon develops carpal tunnel syndrome and can no longer perform surgeries, he would be considered totally disabled even though he could perform the functions of other medically-related positions. Under this circumstance, the surgeon should be able to file a claim and receive full disability benefits. Not so fast.
Most “own occupation” disability policies issued today include a requirement that the physician be receiving care “appropriate for the condition causing the disability” or some variation, in order to receive benefits. In this particular case, the insurer may determine that the “appropriate care” would be surgery to repair the condition. If the physician refuses, or until he gets the surgery, the insurer can withhold benefits because he would no longer be considered totally disabled. In essence, the physician must give up control over his own body in order to receive the benefits.
Policies issued in the past contained more liberal language requiring only that physicians be “under the regular care and attendance of a physician” which broadened the scope of care under the definition of total disability. But even this less restrictive requirement has come under assault by insurers who seek to impose their more restrictive interpretation of “appropriate care” on the older language. The courts have generally come down on the side of the insured in cases where the insurer attempted to redefine the “regular care” provision.
Physicians who own policies with an “appropriate care” clause have not been so lucky. The courts have been near unanimous in their conclusions that the language is not ambiguous and that the insurer has the latitude dictated by medical standards to determine what constitutes appropriate care. In another case in which the physician filed a claim for a psychiatric disability, the insurer was able to discontinue benefits because the insured was not receiving enough therapy and his prescription dosage was not sufficient under the “standards” of appropriate care for his condition.
Physicians who buy the best disability coverage expect their insurer to protect them during periods of disability, but it is also important that you take measures to protect yourself. You should thoroughly review your policy and compare the provisions and language with those of other insurers. Your policy may even include a “regular care” provision, but a closer look could reveal a clarification of that definition elsewhere in the policy.
There are a lot of moving parts in a disability policy. Make sure you work with a qualified insurance broker specializing in disability income insurance.