What if an insured retires before age 65 and then has a disability will a claim still be paid? If somebody retires before age 65 at the guaranteed renewable and non-cancelable policy and guaranteed renewable means it must be renewed till age 65 non-tangible just to throw in a little aside means that the rates can’t be changed or the wording of the contract can’t be changed. If somebody gets disabled before 65 and then not working some of the latest contracts have in it gained gainfully employed the older contracts and so if their new occupation is going to Walmart’s every day doing some shopping and them no longer ambulatory for example then that would be a total disability claim because they can’t do the substantial material duties of their occupation.
I do want to add that in some jurisdictions there’s no such thing as having your regular occupation be quote-unquote unemployed. In fact in the Ninth Circuit there’s a case called Amedeo versus principle, where you had a person with a 20 year career in the securities industry before she became unemployed and then became disabled and the district court well the Ninth Circuit held that there is no such thing as unemployed and what we look to is her regular occupation just prior to the disability, not her unemployed status which may or may not has been related to your disability. So there’s some good case law on that in some jurisdictions.
The most current contracts say that it’s not the occupation at time of the application or even a couple years ago what a lot of the contracts that I see are now saying it’s the occupation at time of claim so if they just change to new occupation and it has to be some reason reasonableness built into it then it’s the occupation. As I just mentioned at the time of claim rather than what they were doing three years ago or anything like that unless the contract jockey says that they will recognize the occupation the one that’s put on the application.
In fact, the advice I give most people don’t retire by the way what happens if you hurt your back your let’s say you’re an orthopedic surgeon you hurt your back and you can no longer stand over the operating table for 14 hours a day. I’m exaggerating of course or you’re a trial lawyer and you can’t literally spend 12 hours a day on your feet. Sometimes if you’re in the trial if you can no longer do that you scaled back your duties and responsibilities and end up creating for yourself a new own occupation just prior to giving up the ghost and admitting that I’m genuinely disabled.
So the orthopedic surgeon with his own occupation specialty policy unfortunately through his own his own grit and determination to not file a disability claim shoot himself in the foot by transforming his occupation to one that’s most likely sedentary. He is just doing office consultations now and the trial lawyer who over the years because of back pain no longer can go to trial starts becoming a supervising partner at the office or focuses mostly on marketing. Now they transform their occupation into something less demanding and when the carrier evaluates that own occupation policy it is no longer the stressful physically and cognitively demanding occupation they look at.