Disability Definitions:
Don’t Be Fooled
By: Calvin Rasey
For over 18 years I have been advising
Physicians to make sure that when
purchasing disability protection that it
has a true “own occupation” or “specialty
specific” definition of disability for the
entire benefit period of the contract.
Recently, this advice has been challenged
by one well known disability provider.
Traditionally total disability means that
due to an injury or illness as a physician
you are unable to perform the material
and substantial duties of your occupation.
The best contracts go in more detail
and state that if you have limited your
practiced to a recognized specialty in the
medical community that specialty would
be deemed your occupation. This means
if you could not see patients in the same
manner you do today, you would be
entitled to receive full disability benefits. If
you decided to work in another specialty
or even another job outside the medical
community earning the same amount
or even more than you did prior to your
disability, you would still collect full
benefits.
A true own occupation or specialty specific
definition of disability does not allow
the physician to profit, however it does
allow the physician to utilize, not only
their education, but also their training
and experience to find joy within the
workforce without being penalized for
being intelligent, motivated, resourceful
individuals. Some would argue that this is
a form of “double dipping” or “profiting”
from a disability, but that is just nonsense.
Every physician has sacrificed time, money
and energy to build a career in the medical
community. There are also student loans
that may be lingering and possibly new
debt due to the disability. Suffering a
disability is difficult and your disability
plan should protect your specialty without
limiting your future mental and financial
well-being.
A well-known insurance company which
markets heavily to the medical community
switched from true own occupation or
specialty specific definition of disability in
1997 to what they now label as “medical
occupation” definition of disability. Don’t
be fooled by the clever wording because
things always aren’t what they seem. The
medical occupation definition hinges on
the fact that as a physician you may have
several duties and in order to collect full
benefits, you would have to be unable
to do all of those duties. For example,
an OB/GYN who may not be able to
do procedures or work in the delivery
room, but would see limited patients in
the office would not be considered totally
disabled. This makes the case that since
most physicians will not satisfy the own
occupation definition of total disability,
they will be viewed as proportionally
disabled and would only receive partial
benefits. This is also true if a physician is
working in any capacity, inside or outside
the medical community.
There is a widely accepted court case,
Dowdle v National Life Insurance
Company, tried in the 8th Circuit Court,
which set precedent between the two
definitions: own occupation or specialty
specific and medical occupation. Dowdle,
an orthopedic surgeon purchased an own
occupation plan. Prior to his unfortunate
disability he devoted 3 full days a week
to surgery and 2 half days of office
consulting, seeing 15-20 patients each
half day. Due to his disability he was
unable to stand in the operating room for
an extended period of time making him
unable to perform orthopedic surgery.
Although he could still see patients in
the office, he claimed total disability
because he could not perform surgery.
Unsurprisingly, his disability carrier
argued that he was not totally disabled
because he could see still see patients in
the office. After hearing the case, the court
agreed with Dowdle that he was totally
disabled and should receive full benefits.
They ruled that orthopedic surgery was
his primary function and any non-surgical
tasks were secondary.
Using this court case is a great way to
compare own occupation/specialty
specific to medical occupation definition
of disability. Under the medical
occupation definition Dowdle would have
needed to either discontinue working
altogether or continue working earning
less than 20% of his pre-disability earning
to qualify for full benefits. However with
the own occupation or specialty specific
definition Dowdle had the ability to
continue working in or out of the medical
community and could earn unlimited
income as long as his disability renders
him unable to perform orthopedic surgery.
The devil is in the details and after a
disability has occurred is the wrong time
to learn that your coverage is not what you
thought it was. The ability to earn a living
doing what you love is a wonderful gift
which should be protected at all costs.
Reference
(1) Dowdle v National Life Insurance
Company, NO 04-2628, US 8th
Circuit Court, May 19, 2005
Securities Offered Through Securities America, INC.*Member FINRA/SIPC • Calvin R. Rasey • Registered Representative
Advisory Services offered through Securities America Advisors, INC.• A registered Investment Advisor·Calvin R. Rasey •
Investment Advisor Representative Physicians Financial Services II, LLC and Securities America Companies are NOT UNDER
Common Ownership
Representatives of Securities America do not offer tax or legal advice
The opinions and forecasts expressed are those of Calvin R. Rasey, are general in nature and cannot be guaranteed.
36
Securities America and its representatives do not provide legal advice. For questions about a specific situation
please consult your legal advisor.
LOUISVILLE MEDICINE