Can My Insurance Company Terminate My Disability Benefits After 24 Months if My Mental Nervous Disorder Contributes to But is Not The Sole Cause of My Disability?

The “But For Test”

In the case of George v. Reliance Standard Life Insurance Company, The district court held that RSL did not abuse its discretion when it determined that a mental disorder contributed to George’s Total Disability. On appeal, George argued that there was no evidence in the record to show that, absent his mental nervous conditions, he was able to earn close to the same amount in another occupation. George was a helicopter pilot who was injured in a helicopter crash which required one of his legs to be amputated. As a result of the phantom pains he suffered after the amputation he could no longer safely fly a helicopter. RSL paid his benefits for 24 months, and then terminated them stating, in part, that his mental nervous condition contributed to his disability. RSL’s policy contained an Exclusion Clause that states “monthly Benefits for Totally Disability caused or contributed to by mental or nervous disorders will not be payable beyond an aggregated lifetime maximum duration of 24 months.” According to the medical records, George’s depression and PTSD impaired his ability to work. RSL determined that George’s mental disabilities “contributed to his overall impairment status,” and that he was thus barred from receiving benefits after 24 months by the Exclusion Clause.

In reviewing the lower court’s decision, the Court of Appeals had to consider the meaning of the phrase “caused by or contributed to by” to determine if RSL was correct in terminating benefits. Other courts had interpreted the “caused by or contributed to by” language to exclude coverage only when the claimant’s physical disability was insufficient to render him totally disabled. The courts have asked whether the mental disability is a “but-for” cause of the total disability. The Court considered whether George’s physical disabilities were independently sufficient to render him Totally Disabled. According to the Court in George:

George’s physical disabilities, the loss of a leg, placed a ceiling on his vocational prospects. Even if George were completely healed of his mental disabilities, he would still be limited to sedentary jobs. And as we explained above, there is no evidence in the record that George could have earned a salary in a sedentary job that was substantially similar to the one he earned as a helicopter pilot. Thus there is no rational connection between the fact that George’s mental disabilities may have impaired his ability to hold down a sedentary job, and the conclusion that his mental disabilities caused or contributed to his Total Disability.

Reliance Abused its Discretion

The Court went on to hold that RSL abused its discretion when it determined that the Exclusion Clause limited George’s right to benefits. The Court reversed the district court’s decision and rendered judgment for George, remanding the case to the district court to determine the amount of benefits owed to George.

This case sets an important precedent for claimants who suffer from physical disabilities that prevent them from performing the material and substantial duties of their occupations, but also have secondary depression and anxiety which contributes to their impairment. It is important to note that not all policies contain and income component similar to George’s and each policy contains unique language. Therefore, it is crucial to have your policy reviewed by a qualified attorney to determine whether or not your benefits could be limited to 24 months under similar circumstances.

The law firm of Dell & Schaefer did not represent Mr. George in the above action; however an attorney from Dell & Schaefer would be happy to provide you with a free consultation to discuss your long-term disability claim.

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