Doctors: Are you insured against disability in your medical specialty?

A refusal by your insurance company to pay disability insurance benefits when illness or injury prevents you from practicing in your medical specialty can be financially devastating.

By Maggie M. Smith, Esquire

A disability insurance policy is supposed to protect you from financial loss when an illness or injury interferes with your ability to practice medicine. However, the terms of your particular insurance contract can make all the difference in whether the insurance company writing the contract will pay benefits when you become disabled from practicing in your medical specialty. An insurance contract that does not truly insure your occupation or medical specialty or contains ambiguous terms left open to “interpretation” can result in a financially devastating claim denial.

The definition of disability included in your disability insurance policy may be the most critical term in the entire insurance contract. This is particularly true in the medical profession where so many specialties exist and where the risk of disability from your occupation is high. Do you have disability insurance coverage that truly insures against disability in your occupation? Are you insured against disability in your medical specialty?

Several different definitions of disability are available for purchase in the disability insurance industry. There is the definition of disability that has become known as the “own occupation” definition. Generally, under an “own occupation” policy, an insured is considered totally disabled if he or she becomes unable to perform the material and substantial duties of his or her occupation due to illness or injury. There is also a “specialty” version of this “own occupation” definition, which requires an insurance company to recognize a specialty practiced by a professional as his or her occupation. A less favorable definition of disability is referred to as the “any occupation” definition, which only provides for disability benefit payments if you’re unable to perform the duties of any occupation for which you are properly qualified, trained or experienced. There are many other variations, including policies which are strictly contingent upon a certain percentage of income loss occurring because of an illness or injury before the insured person can qualify as “disabled,” others under which income loss is irrelevant, and policies which combine any of these requirements. The most desirable coverage is the true “specialty” coverage followed by true “own occupation” coverage, which many prospective insureds opt to pay additional premiums to secure.

To illustrate the significance of “specialty” coverage in the medical field, consider the example of an invasive cardiologist who performs primarily cardiac catheterizations versus a general cardiologist whose practice consists mainly of patient consultations and non-invasive diagnostic testing. An invasive cardiologist should make certain that he or she is insured against disability from invasive cardiology as opposed to general cardiology, not only because the physical requirements are greater but also because the job duties required are generally very different. Furthermore, the likelihood of an invasive cardiologist becoming unable to perform cardiac catheterizations is greater than developing an inability to conduct patient consultations, stress tests or EKGs.

If an appropriately drafted disability insurance policy is not secured, an invasive cardiologist could become entirely unable to perform cardiac catheterizations due to illness or injury and still not be considered occupationally disabled by his or her insurance carrier, despite cardiac catheterizations making up a significant portion of his or her practice. Even with “own occupation” coverage, insurance companies often take the position that the terms of the insurance policy only require it to determine whether the physician is disabled from practicing cardiology, not specifically from practicing invasive cardiology. In other words, because an invasive cardiologist can still conduct patient consultations and stress tests, he or she is not disabled under the policy despite the complete inability to perform cardiac catheterizations. This would be extremely detrimental to a claim for disability benefits for an invasive cardiologist who would likely experience a significant decrease in revenues and patients as a result of becoming unable to perform cardiac catheterizations.

Many specialists within the medical community do not have “specialty” disability policies and thus run the risk of not being insured as specialists, but instead as general practitioners whose duties are generically defined by insurance companies according to industry standards. However, even medical professionals with “specialty” policies are being denied disability benefits because they many times file their claims in such a way as to allow the insurance company to argue the claim outside of coverage under the policy.