Disability insurance

“ In 1876 the convention dissolved the Total Disability Insurance Association, and the Engineers did not succeed in establishing a satisfactory system of disability insurance until 1884, when the prosperous condition of the association enabled the convention to carry out its long-cherished plan and to make provision for the payment of the same benefit in case of total disability as at death. ”

“ In the railway organizations total disability is so defined as to cover inability of the insured to continue in his position. Secondly, the disability insurance offered by the regular insurance companies is joined with accident insurance affording a weekly indemnity during the period of illness due to accident. The railway employee, if he insures against totally disabling accidents, must also insure against temporarily disabling accidents, since the companies do not separate the two forms of insurance. ”

“ If, however, the insured became totally and permanently disabled before the age of sixty, the company, petitioner, was to pay him a monthly income at an agreed rate and was to waive the payment of any premium that would otherwise be due. Disability was to be considered total when the insured was so affected by bodily injury or disease as to be wholly prevented from performing any work, from following any occupation, or from engaging in any business for remuneration or profit. ”

“ If the surviving spouse's impairment does not meet or equal one of the listed impairments, the Secretary will not find the spouse disabled; in particular, the Secretary will not consider whether the spouse's impairment nonetheless makes the spouse disabled, given the spouse's age, education, and work experience.
The Secretary's practice for spouses' disability insurance benefits thus differs significantly from the regulations for determining whether a wage earner is entitled to disability insurance benefits. ”

“ The court gave judgment for the respondent for permanent disability benefits under his first policy, with respect to so much of the insurance as the $312.25 of disability compensation, remaining uncollected at the time of total permanent disability, would have purchased if applied to the payment of premiums due upon the original policy between the date of its conversion and the date of total disability. ”

“ If the insured made good his claim, the decree establishing his right to the disability benefits, and to the continuance of the policies in force during the period of the proved disability, would be none the less final and conclusive as to the matters thus determined even though a different situation might later arise in the event of his recovery from that disability and his failure after that recovery to comply with the requirements of the policies. ”

“ Under the challenged offset provision, federal social security disability benefits are reduced only for those persons whose disability entitles them to workmen's compensation. Other persons who receive other kinds of disability compensation-for example, private insurance benefits or tort damages-are allowed the full amount of federal social security benefits. ”

“ In particular, 'the total and irrecoverable loss of the sight of both eyes or of the use of both hands or of both feet or of one hand and one foot' was to constitute 'total disability for life.' Before making any income payment or waiving any premium, the company might demand due proof of the continuance of total disability, not oftener, however, than once a year after such disability had continued for two full years. ”

“ The insured seeks not payment of disability benefits as they mature according to the insurer's promises, nor the damages resulting from its failure regularly to pay installments when due. His claim, as indicated by the evidence offered, is at least for the present value of the monthly payments during his expectation of life and also for the present worth of the face value of the policy. ”

“ Now, the interesting thing about that situation is that, whereas insurance companies in those days were reluctant to give policies to those men, even at astronomical premium rates, disability insurance cost practically nothing—provided the insured would allow the insertion of a clause that restricted the covered period to those times when he was actually engaged in transporting nitroglycerine. ”

“ It was not exempted by section 70a, because the obligation to pay disability benefits is not 'insurance' within the meaning of that section. The term 'insurance' as there used referred only to legal reserve life insurance, the kind of insurance to which a cash surrender value was a common incident. For such value specific detailed provision is commonly made in life policies. ”

“ All the features of life insurance also were in existence. The partial disability clauses of life or accident insurance policies are recent developments. In the old days there is insurance against the loss of sight, against the loss of a limb, or any other form of crippling. The deaf and dumb might be insured so as to secure an income for them, and corresponding relief for leprosy might be obtained; so that, if one were set apart from the community by the law requiring segregation of lepers, there might be provision for food and lodging, even though productive work had become impossible. ”

“ The amount of insurance due to the insured on account of permanent disability has been paid to the administrator de bonis non of the estate of Lee Ray Jackson. The remaining installments of the life insurance were commuted, and the sum thereof, fixed by the War Risk Bureau, was also paid to the administrator last named. Such payments of the disability insurance and the sum of the commuted installments were authorized by the Veterans' Bureau and the administrator directed to distribute the amounts in accordance with the intestacy laws of the state of the insured's last legal residence ”

“ If this defense can be interposed, his policy has never actually protected him against total permanent disability. Since permanent total disability is one of the two risks insured against in the policy, any contest (not based on the exceptions) which may prevent the policyholder's recovery for such admitted total permanent disability-existing while the policy is in force-is a 'contest' forbidden by the 'incontestable' provision.
No legal obstacle prevents parties, if they so desire, from entering into contracts of insurance to protect against loss that may possibly have already occurred. ”

“ Since the company is domiciled in New York and the insured lives in Pennsylvania, and 'all that is here for our consideration is the meaning, the tacit implications, of a particular set of words,' 'for the sake of harmony and to avoid confusion' we shall follow the decision of those courts and hold that the insurance company is not barred by the incontestability clause from rescinding the double indemnity and disability provisions. ”

“ There is nothing to show that any refusal of the company to pay the monthly disability benefits was not made in good faith. Its position appears at all times to have been that, if plaintiff was disabled as defined in the policy, he was entitled to the monthly benefits and waiver of premiums. The fact that, with additional information and upon further consideration, it gave greater weight to his claims and decided that he was continuously disabled as defined in the policies and so entitled to the specified payments goes to show adherence to, rather than repudiation of, the contracts. ”

“ In the second count, after stating the same facts, he claims for damages the total benefits that will be payable to him during the same period of expectancy, if he lives that long and his disability continues. The damages so computed are $15,900. No deduction is made on account of future premiums, for by hypothesis the disability will continue during life. The defendant demurred to both counts, stating in the demurrer that the declaration sets forth a cause of action for the benefits and premiums accruing prior to the date of the writ, and for nothing in excess thereof. ”

“ Its obligation was not an unqualified one to pay or to pay on the mere occurrence of disability, but only after proof of that fact. Similarly its agreement to continue payments once begun was conditioned upon the persistence of insured's disability, and, at the election of the insurer, proof of that fact by physical examination, but after two years not oftener than once a year. These conditions serve to define the insurer's promises but impose no obligation on the insured. By payment of the premiums he acquired the options and privileges specified. ”

“ It seems clear that Congress intended to permit the deduction of reserves based on those policies that make a company a 'life insurance company' under the Act, which, by definition, includes policies of 'combined life, health, and accident insurance.' The reserves here related to the disability provisions of such combined policies. ”

“ The suit was to recover for permanent total disability under a policy of group insurance issued in Pennsylvania by respondent to the Gulf Oil Corporation. It covers employees of that corporation and its subsidiaries of which the Gulf Refining Company is one. Petitioner, an employee of that company, by that policy was insured in respect of life and disability. ”

“ The liability to those who have incurred disability is not a fixed sum, but remains a contingency, still uncertain in duration and amount. Reserves held for such a contingent liability are true reserves in the insurance sense.
We find it unnecessary to discuss the extent to which such a regulation might, under different circumstances, be given retroactive effect by virtue of the statutory power of the Commissioner. [18] Nor do we find it necessary to discuss the argument that the policy behind the special treatment afforded life insurance companies does not warrant allowing this deduction. ”

“ Under the new law, which became operative January 1, 1906, the Retirement Association was authorized to offer insurance against disability and old age. The members are, therefore, divided into two classes, annuity members and disability members, but those duly qualified may hold both annuity and disability certificates. Any member of the National Association of Letter Carriers may become an "annuity member;" but only those under sixty-five years of age and in good physical condition may become "disability members." ”

“ If he is already in default for the nonpayment of a premium, he will not be in any worse predicament by multiplying the defa lts thereafter. On the other hand, if his default is unreal because the premiums had been waived, the insurer will be estopped from insisting upon later premiums until the declaration of a lapse has been canceled or withdrawn. Besides, if the disability is permanent, there will be nothing more to pay. ”

“ Broadly speaking, health insurance is an undertaking by one person for reasons satisfactory to him to indemnify another for losses caused by illness. We believe that the Southern Bell disability plan comes within this meaning of health insurance.
If Southern Bell had purchased from a commercial insurance company health insurance that provided its employees with precisely the same kind of protection promised under its own plan, the Government concedes that the payments received by ailing employees from the commercial company would not have been taxable. ”

“ The provisions of the War Risk Insurance Act are sufficiently comprehensive and inclusive to authorize its administrators to grant insurance covering past or future total permanent disability, if such action is found necessary to carry out its far reaching national plan and purposes. ”

“ The disability due to advancing years is in nature a chronic illness, inevitable, sooner or later, to all who survive. The movement to provide some indemnity in such cases has been rapid in European countries, doubtless because the problem was a very pressing one where the average earnings are low. In Germany and Austria this development has been more in connection with other forms of insurance; in Denmark, Great Britain, and France it has had more the aspect of an extension of poor relief. In the United States little has been done to provide for these great needs. ”

“ The same underlying considerations that prompted the deduction for death reserves are applicable to the reserves for disability in these combined policies. And disability as well as death reserves fall literally within the language of the deduction provision. It is not disputed that administrative regulations promulgated under every Revenue Act from 1921 through 1932 recognized the right of life insurance companies to take deductions both for death and for disability reserves on policies such as those here involved. ”