Cost of Living Benefits and Disability Benefits

There are some who believe that insurance policies are by definition ambiguous - mostly lawyers who solely represent policyholders for a living - and others, on occasion including judges, who sometimes seem to believe that unless a policy specifically excludes something, than it is either ambiguous and provides coverage or simply provides coverage because the policy didn’t come out and say it does not. None of this is correct. Instead, the question of what policies cover should turn on the specific language of the policy in question and the rules of policy interpretation that apply in the specific jurisdiction in question.

The First Circuit applied this proper approach correctly here in this case, Prostkoff v. Paul Revere Life Insurance Company, where the parties disputed whether the plaintiff was entitled to cost of living increases in his disability benefits after the age of 65. The court correctly concluded that the policy language was not ambiguous and that the policy should not be construed to grant such coverage.

There isn’t much law talked about in this case, so I am not sure of its value to practioners, outside of the unlikely event that someone, somewhere, is presented with the exact same dispute over the availability of cost of living adjustments to disability payments after the age of 65. At a minimum, it’s a case that may be worth citing simply as an exemplar of the right approach to interpreting and understanding policy language that may not be perfectly clear on its face.