We might not know you, but if you’re reading this post we know at least three things about you.
One: You’ve spent years learning your craft. Two: You’ve spent years perfecting your craft. Three: If you suddenly couldn’t perform said craft, you’d still want to maintain comparable compensation after your years of hard work.
Disability insurance is, in essence, income insurance, and this is where the policy you choose makes all the difference in whether you can receive the coverage you deserve.
Let’s get clear: What is own occupation disability insurance?
Terminology can be really confusing in the insurance world. Unlike in medicine, carriers don’t use standardized language, so you might see different terms used for the same concept.
We define own occupation disability insurance as the benefit acquired if the policyholder cannot perform what they were explicitly educated and trained to do. In this case they would qualify as disabled, ultimately making them entitled to receive the full benefit or, as we call it in the industry, to be “on claim,” regardless of whether they chose to work in another field.
We consider own occupation to be the backbone of a policy. If you were a surgeon who developed a tremor in your hand and could no longer perform surgeries (a story we’ll share a bit later), you wouldn’t have to worry about how you would make the kind of money you were intended to if you secured this type of coverage in your policy.
See the difference: “any occupation” vs. “own occupation” disability insurance
Any occupation is the opposite of own occupation. This type of coverage requires that an ill or injured policyholder be employable in any position based on the holder’s education, training, and experience. This means if you can perform another occupation, you will not receive all your benefits.
It also doesn’t take into account income increases throughout your career. So, if you couldn’t do your current job but could do a lower-paying job, as long as it aligns with your education, you couldn’t receive benefits. If that surgeon we mentioned could instead teach or do paperwork, poof, some or all coverage disappears..
The lack of flexibility in any occupation coverage will most likely work against you. You would only receive benefits in the case of a catastrophic situation where you end up completely unable to work. This coverage is much more restrictive and limited if you ever file a claim.
We recommend that all physicians purchase policies with their specific occupation definition. So, as your pay increases, you can be confident that you are being covered accordingly.
Worst case scenarios: Why is own occupation disability insurance important?
Let’s dive into the real-life example of this surgeon, so you can get a better idea of how own occupation coverage can protect you.
He developed an essential tremor in his dominant hand, meaning he couldn’t operate. At the time he was relying on group insurance, so his coverage was completely in his employer’s hands. In his case, his policy had language that did include own occupation of total disability, but only for 24 months; then, it would only shift to any occupation. This means that he got paid disability benefits but only for two years.
After the two years were up, vocational experts reassessed his abilities and determined that he could still work with his earned education, given that everything served him except his hand. Sadly, he went “off claim” and lost his benefit. There weren’t many options that would pay nearly as much as he earned as a general surgeon.
In an ideal world, this wouldn’t have happened. He would have secured a policy that would protect his income in predicaments like his. He would have been completely aware of the policy his employer provided, and he would have known how to supplement it with an individual policy to fill the gaps.
That’s what we specialize in with our clientele. With individual policies, it is possible to craft your coverage into what you need it to be, so you’re protected by any means.
Why should every physician get own occupation disability insurance?
In short, we don’t want you to end up in a situation where it’s too late to review your policy. The same way every patient needs a personalized treatment, you also need a tailored policy that is best for you.
If you don’t know where to start, dust off your group policy and request the data pages. That’s where you can dig into the details of what coverage you really have. We’re here to help you navigate the fine print. Book a consultation today.