In Bowerman v. National Life Insurance Co., Case No. 15-1129, 2016 U.S. App. LEXIS 12503 (3d Cir., July 7, 2016), the U.S. Court of Appeals for the Third Circuit upheld an insurance company's decision to terminate the policyholder's residual disability income benefits after investigation revealed that he no longer met the policy's definition of disability. The policy contained a Rider that provided that, for 120 months, or until the insured turns 55 years old, the definition of occupation means the occupation the insured had at the time the disability began. However, after that period of time, the policy's definition of occupation "means any occupation for which the Insured is or becomes reasonably fitted by education, training or experience."
The insured was working as a chiropractor at the time he sustained his disability. However, he also worked nearly full-time as a Medical Director a health care management company and as a consultant. The insurer paid benefits for 21 years, but then determined that his position at the healthcare management company satisfied the policy's occupation definition, meaning he was no longer disabled within the meaning of the policy.
The insured argued that the language in the rider was ambiguous and that his benefits should be reinstated. The Court held that there was no ambiguity and that the "language of the Rider is unequivocal." Accordingly, the Court affirmed summary judgment in favor of the insurer.