What is a disability? There is no universal definition of the term disability in the life insurance field. You will find the answer to this question in your insurance contract.

An insurer can offer different kinds of disability insurance, each with its own variants. Also, most contracts define short term and long term disabilities differently. When the insurer analyzes a claim, the disability definition in the contract is taken into account.

Disability insurance

Disability insurance compensates insureds who are disabled as a result of an accident or illness for loss of income by paying them benefits. In the context of claims settlement, however, disability corresponds to an insured's inability to work and not to any specific health-related problems. (Note: Some contracts, however, take the insured's inability to perform the activities of daily living into account.)

In order to determine whether or not insureds are disabled, the insurer obviously takes a look at their health problems, but it pays special attention to limitations or restrictions affecting the ability to work. This nuance is a determining factor.

In fact, the disability insurance claims submitted by people who have the same kind of insurance and have a similar health status may be settled differently because they have different jobs. For example, an insurer does not analyze a claim submitted for respiratory problems by an accountant working in an office as it would if the individual was a foreman working for a mining company.

Own occupation

In addition, most disability insurance contracts include an own occupation provision. This provision specifies that an insured is considered disabled and eligible for benefits if he/she is unable to work in their own occupation for the time period stipulated in the contract.

When analyzing claims, the insurer therefore assesses the insured's ability to perform the different tasks related to his/her job by examining his/her illness or injury (functional limitations). As a rule, however, the time period in question only lasts 12, 24 or 60 months (or until the insured retires, under some contracts).

Any occupation

When the own occupation period expires, disability is no longer defined in the same way. At that point, an insured is considered disabled only if unable to work in any occupation for which he/she is fit by education, training or experience.

In the example above, the mining foreman's health-related problems do not necessarily prevent him from working as a foreman in a job that does not require going down in a mine or from working as an office employee. In this case, the insured would not be considered disabled once the own occupation provision ceases to apply.

Total disability

Finally, most disability insurance contracts provide for benefits in the case of total disability. The definition of total disability also varies from one contract to the next. Check your contract to find out how it is defined.

Generally speaking, it means that insureds are unable, due to their condition, to perform most of the tasks of their regular occupation or, if the own occupation provision no longer applies, to perform most of the tasks of any occupation for which they are suited.