Total Disability Coverage

Disability income insurance coverage for someone in Grand Prairie, Dallas, Fort Worth, Arlington, Bedford, Euless, Hurst, Lake Worth, Aledo, or anywhere else in Texas is usually expensive. In addition to being expensive, the policy language is sometimes difficult to interpret.
Disability income policies typically specify an amount that will be paid in the event of a disability (as defined in the policy) and a maximum length of a disability (as defined in the policy) and a maximum lenght of time for which such benefits will be paid (e.g., “$200 per month for up to 60 months”).
A beginning place to look to see how Texas regulates disability income insurance policies is the Texas Administrative Code. Title 28, Part 1, Chapter 3, Subchapter S, Rule Section 3.3005 deals with the definitions in policies. It reads:
Except as otherwise provided by law or these sections, no individual accident and sickness insurance policy or hospital, medical and dental service corporation subscriber contract delivered or issued for delivery in this state may contain definitions respecting the matters set forth in Sections 3.3006 – 3.3029 of this title (relating to Minimum Standards and Benefits and Readability for Accident and Health Insurance Policies) unless such definitions comply with the requirements of said sections.
One should keep in mind that the person claiming benefits need not prove that he or she actually lost the amount of income protected. In other words, the benefits are payable even if the insured is unemployed at the time of the disability.
The Administrative Code quoted above, Section 3.3012 reads:
(a) A general definition of “total disability” may not be more restrictive than one requiring the individual to be totally disabled from engaging in any employment or occupation for which he or she is or becomes qualified by reason of education, training, or experience, and such individual is not in fact engaged in any employment or occupation for wage or profit.

The Texas San Antonio Court of Appeals said in 1966, in the case, Occidental Life Insurance Company v. Duncan, “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.”
The above Administrative Code Section, subpart (b) reads:
“Total disability” may be defined in relation to the inability of the person to perform duties, but such inability may not be based solely upon an individual’s inability to:
(1) perform “any occupation whatsoever” or “any occupational duty”; or (2) engage in any training or rehabilitation program; however, an insurer may specify the requirement of the inability of the person to perform all of the substantial and material duties pertaining to his or her regular occupation, or words of similar import.
In 1978, the Fort Worth Court of Appeals in the case, Metropolitan Life Insurance Company v. Duncan said that a disability insurer selling a policy designed to provide coverage in the event of being unable to engage in their occupation, may define “total disability” in terms of:
(1) the insured’s usual occupation (e.g., “unable to perform any and every duty pertaining to his or her own occupation”);
(2) 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”).
The Texas Insurance Code, Section 1252.001, defines “total disability.” It says in sub-part (5):
“Total disability” or “totally disabled” means:
(A) with respect to an employee or other primary insured covered under a health benefit plan, the complete inability of that individual to perform all of the substantial and material duties and functions of the individual’s occupation in which the individual earns sustantially the same compensation earned before the disability; and (B) with respect to any other individual covered under a health benefit plan, confinement as a bed patient in a hospital.
Disability policies are a big source of litigation. An experienced Insurance Law Attorney is a must have when dealing with disability policies. Another factor making these cases different than other insurance policies is that a majority of these disability policies are ERISA policies, which means the legal fight with these policies have to be waged in a Federal Court. In addition to that, these cases have very strict guidelines that must be followed. And finally, in an ERISA type of policy, the claimant is not going to be entitled to a jury trial, rather the process is an administrative process with strict timelines which are ultimately decided by a judge based on a stringent standard.

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