It needs to be noted at the beginning here. Private disability claims are different from government disability claims and also from disability claims that are governed by ERISA.
This posting deals those disability claims that are from private policies or policies other than government or ERISA.
Disability policies will usually specify an amount that will be paid in the event a claimant becomes disabled (as that term is defined in the policy) and a maximum length of time for which such benefits will be paid. As an example the policy may pay $500 per month for up to 10 years.
The test for “total disability” is whether a reasonably prudent person in the insured’s condition would, in the exercise of ordinary care, engage in the insured’s business; it is not necessary that the insured be immobile, bedridden, or totally unable to work before he or she can recover. This was stated in the 1966, San Antonio Court of Appeals opinion styled, Occidental Life Insurance Co. v. Duncan.
Disability insurance may define “total disability” in terms of:
- the insured’s usual occupation (e.g., “unable to perform any and every duty pertaining to his or her own occupation”);
- an occupation for which the insured is qualified by virtue of education, training, and experience (e.g., “unable to engage in any gainful occupation or employment for which he is reasonably qualified by education, training, or experience”), this is discussed in the 1978, Fort Worth Court of Appeals opinion styled, Metropolitan Life Insurance Co. v. Duncan.
- for purposes of a particular disability insurance policy, an insured was totally disabled if he was “unable to perform all of the important daily duties of his occupation.” This language is discussed in the 2003, Texas Supreme Court opinion styled, Provident Life and Accident Insurance Co. v. Knott.
- inability to perform “each of the material duties” of insured’s regular occupation. This language was discussed in the 2002, United States 5th Circuit opinion styled, Lain v. UNUM Life Insurance Co. of America.
- any occupation whatsoever (e.g., “wholly incapacitated from performing any work whatsoever for remuneration or profit”); or
- some combination of the above.