California Gainful Occupation Lawyers
Serving San Francisco for Over 30 Years
Understanding Gainful Occupation and Residual Disability
In the realm of disability insurance policies, there are intricate clauses and provisions that can have a significant impact on your coverage and benefits. One such clause is the concept of "gainful occupation" and the often associated "residual disability" provisions. These terms may seem perplexing at first, but we'll break them down for you in a clear and concise manner.
Gainful Occupation - What Does It Mean?
Some insurance policies include a requirement that the insured must not be engaged in any "gainful occupation" to qualify for total disability benefits. However, the term "gainful" is usually not explicitly defined in the policy, leaving room for interpretation. Insurers use this condition to transition policyholders from the "total disability" category into what they call the "residual disability" section of the policy.
Residual Disability - Navigating the Complex Terrain
Once you're categorized under residual disability, insurers argue that if you can perform any of the "important duties" of your occupation, you're not totally disabled. Instead, you are considered partially disabled, and the benefits you receive are subject to a complex formula that relies on your pre and post-disability earnings.
What's interesting, and often not well-publicized, is that even if you are totally disabled in your own occupation, some policies allow you to collect benefits under the residual portion for a month in which you might be working and revert to the "total" section when you are unable to work. In essence, you can move back and forth between these categories.
Residual Clause - A Closer Look
It's essential to be cautious of policies with residual clauses, even if the total disability definition doesn't contain a "gainful occupation" requirement. These clauses, often marketed as additional benefits for which you may have paid extra premiums, are now causing insurers to assert that the only way to qualify for total disability under such policies is to be unable to perform all substantial and material duties of your occupation.
A Real-World Example
Let's illustrate this with a practical example: imagine an orthopedic surgeon who purchased a policy in the 1980s to protect against disability in his specialty. The policy assured him that, if disabled as an orthopedic surgeon, he could work in another field of medicine and still receive benefits. However, due to severe diabetes and its complications, he's now entirely disabled as a surgeon. His physical condition is debilitating, with numb hands and feet, vision complications, and compromised kidney function.
Despite these severe impairments, the insurance company, relying on the residual benefits clause, is arguing that he's only partially disabled because he can still perform some of the incidental tasks he could do before.
In Conclusion
It's vital to be aware that the so-called "extra" benefits provided by residual clauses may, in fact, impose a more stringent definition of total disability than what is sanctioned by relevant laws. If you find yourself in a similar situation, be prepared to take legal action to protect your rights and benefits.
If you need assistance with such insurance matters, don't hesitate to contact us today or call (415) 234-1499 to begin with a free case evaluation. We are here to help you navigate the complex world of insurance policies and ensure that you receive the coverage you rightfully deserve.
Our office is conveniently located on Franklin Street in San Francisco, just blocks from the courthouses.
Ready to take action? Call (415) 234-1499 or contact our firm online to start with a free consultation.
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