When Doctors File Disability Insurance Claims

Just like their patients, doctors can become disabled. Most physicians own individual disability insurance policies. Doctors face several unique issues when making claims under these policies.

1. Definition of Disability and Occupation:

Insurance policies have specific definitions of disability, such as “own occupation” versus “any occupation.” Doctors often purchase “own occupation” policies, which pay benefits if they are unable to perform the specific duties of their medical specialty. However, insurers may challenge whether the doctor is truly unable to perform their specific role.

When the insured purchased his policy and completed the insurance application, the application listed a specific occupation.  Depending on how specific that occupation was, the current “own occupation” could be broad or narrow.  If the application listed “brain surgeon,” then the occupation is limited to working as a brain surgeon, and if the doctor is unable to perform those duties, the insured meets the definition of disability.  But what if the application lists the occupation as “surgeon,” or “doctor,” or “owner of medical practice”? In those cases it can be much more difficult to prove a narrower occupation, meaning that the insured must show disability from the broader duties that a “surgeon,” “doctor,” or “owner of medical practice” may perform.

2. High Standards of Proof:

Because doctors tend to earn higher amounts, insurance companies are more aggressive in challenging their disabilities. Doctors may be required to provide extensive medical evidence to prove their disability. This can include detailed medical records, test results, and opinions from multiple specialists, which can be time-consuming and challenging to compile. This evidence of diagnosis and treatment will need to be in place before filing a claim for disability. Physicians may want to consider keeping a diary of the types of work they perform each day as well as their symptoms and difficulties as further evidence to support disability. Also, doctors frequently understate their own physical or cognitive limitations when seeking treatment or talking with colleagues.  If a medical professional is considering filing a claim for disability, it is important to be forthright about the disability, as such statements will be reviewed by the insurer.

3. Partial or Residual Disability:

Policies often have provisions for partial or residual disability, which can be complicated to navigate. Under a partial or residual disability, a doctor may still be able to perform some duties or work part-time, leading to disputes over the extent of their disability and the corresponding benefits. For example, if a doctor is unable to treat patients but can still assist somewhat in running the business side of the practice, is the doctor disabled from his occupation, and if so, by what percentage compared to the doctor’s former duties?

4. Financial Documentation:

When completing the insurance application, the insured physician had the ability to either request a monthly dollar amount for a disability benefit with an annual cost-of-living increase, or to select a percentage of income at the time of disability. Unfortunately, policies that provide for a percentage of lost income typically define “income” based on net income on prior years’ tax returns, not gross income or revenues. This can result in the policy being worth only a fraction of the actual income the insured made prior to disability. Additionally, policies based on income look at the loss of income with the disability.  If the doctor cannot work, but owns or has a share of a medical practice and continues to receive income from that, that income will still be attributed to the doctor. Proving lost income can be complex, especially for doctors with fluctuating incomes or those who run their own practices. Detailed financial records, tax returns, and profit and loss statements are often required, and discrepancies can lead to denials and legal disputes.

5. Mental Health Claims:

A career as a doctor can be extremely stressful. Claims based on mental health issues such as burnout, anxiety, or depression are common, but often receive additional scrutiny from insurers. These conditions may be less visible and harder to quantify, and insurers often require comprehensive psychological evaluations and treatment histories. Some policies include two-year limitations on such claims as well, minimizing the benefits available to the insured.

6. Surveillance and Investigations:

Doctors, particularly those with high-value policies, may be subject to surveillance and investigations by insurers seeking to disprove their disability claims. This can include monitoring their activities and social media presence.  The insurance company will not just be looking at the time the doctor does or does not spend at the clinic.  The investigator will follow the doctor upon leaving the house, tracking their movements and interactions.  The intent of this is to find out what, if anything, the insured does that demonstrates the physical or cognitive ability to work despite the disability claim. Social media is reviewed and, if litigation begins, subpoenaed, for the same reason.  Even if the insured does not post actively on social media, they can be tagged in the posts of others in photos and discussions of activities.

7. Policy Exclusions and Limitations:

Policies may have specific exclusions or limitations, such as those for pre-existing conditions, mental health, substance abuse, or self-reported symptoms. Depending on the policy language, pre-existing conditions may be excluded entirely.  Claims involving mental health, substance abuse, or self-reported or subjective symptoms may be limited to 24 months of benefits. Doctors need to be aware of these exclusions when filing claims.

With individual disability policies, each policy is unique to the insured and therefore can require detailed analysis to grasp the coverage and issues involved. Understanding their policy before filing a claim can help doctors prepare more thoroughly when filing disability claims. Given the amount of benefits potentially at issue, doctors should consult an attorney with expertise specifically in high-value individual disability insurance policies. This will ensure that their rights are protected and that the maximum amount of benefits under the policy are provided to them.