Residual versus Total Disability:

There’s an interesting conundrum right now in our practice between total disability and residual disability. Because many of the insurance policies, especially the ones that we bought on our own, like I bought, for the payment of extra premiums, you bought residual disability. Because it provides, if you can do some but not all of the duties of your occupation, you can still receive disability benefits. And usually they are reduced by the percentage of your income loss. So if you’re earning $100,000 a year and now, because you can only do some of your job duties, you’re earning $50,000, you would have, by simple math, a 50% income loss. So then we take your insurance coverage and the company would pay you 50% of the monthly benefit. That’s residual disability.

Total disability is you’re unable to do the important duties of your occupation or the material and substantial duties of your occupation. The problem that we run into is, and it’s being litigated around the country, if you have an occupation-specific policy like my example is an orthopedic surgeon who can now have an office-based practice, or you have an Ob/Gyn who can’t deliver babies anymore or can do simple gynecological treatment and evaluations in the office, are they totally disabled, are they unable to do the important duties of their occupation, or are they residually disabled? Well, most insurance policies would say you have a dual occupation because you have a office-based practice and a surgical practice. And because you can still do the office-based practice, you’re only residually disabled. They’ll only pay you a portion of your benefit. And that’s -- I’m litigating on many of those cases right now, and it’s a problem. Because when you bought your policy as a surgeon you didn’t say, well, you don’t have to pay me my total disability benefit if I can see patients here and there in the office during the week. That’s not what I went to medical school for. So it is a problem that we’re dealing with. But that’s dual occupation.

And that also, I want to mention that if you are a surgeon or a trial attorney, for example, and you change your occupational duties to suit your disability before you go out, by that I mean is you stop taking night call and you stop doing surgery in the hospital and you start doing an office practice, by the time you go on disability you may have restructured your occupation. You may have recharacterized it. So the company will say, well, Harry, five years ago you were an orthopedic surgeon. But you just went out on disability, you really weren’t a surgeon by then, so we have to see if you can’t do that office-based practice any longer. Because if you can, you’re not disabled anymore. So those are some hot topics and some hot issues that we work with, doctors and lawyers and other professionals.