Your ability to collect benefits under your insurance policy depends first and foremost on how “total disability” is defined under your policy. As we have previously discussed, if you are a professional choosing a policy, you will want to look for a policy that defines “total disability” in terms of your inability to perform your “own occupation,” and you will want to be sure to look for a true “own-occupation” policy.
While most professionals are aware of the importance of seeking out an “own-occupation” policy, you may not be aware that insurance companies also offer specialty-specific own occupation policies that are tailored to physicians and dentists who are specialists. These policies have a more precise definition of “total disability” that requires the insurance company to not only consider your occupation, but also your specialty when assessing eligibility for benefits.
Here’s a few examples of what these specialty-specific policies look like:
Oftentimes, the premiums charged for these types of policies are higher than other policies, but if you end up needing to file a claim down the road, and you are a physician or dentist with a board recognized specialty, this type of “total disability” provision can help ensure that your specialty (and corresponding job duties) are given proper weight. If you have a specialty-specific definition, and your insurance company is not taking into consideration the unique demands and duties of your specialty, you should contact an experienced disability insurance attorney and he or she can ensure that this important provision is enforced.
In prior posts, we’ve talked before about how an individual disability policy with a true “own occupation” provision is ideal. Under this type of provision, you are “totally disabled” if you are no longer able to perform the material and substantial duties of your occupation (for example, you can no longer perform dentistry), and you can still work in a different field and receive your full benefits (if you are able and choose to do so).
Most doctors looking for a disability policy know that it’s important to get an “own occupation” policy, but may not realize that there are several, less-favorable provisions that are also styled as “own occupation” provisions. These provisions contain the phrase “own occupation,” but also contain language that can dramatically impact a doctor’s ability to collect. For example, a policy might provide benefits if you are no longer able to work in your occupation, but only if you are not working in any other occupation. And some newer disability policies actually require you to work in another occupation in order to collect benefits.
Another type of restriction we’ve been seeing recently is a “transitional own occupation” or “transitional your occupation” policy. As we stated above, under the true “own-occupation” policies prevalent in the 80’s and 90’s, you can work in another profession and still collect full benefits, regardless of whether you make less, the same, or more than when you were practicing. With “transitional own occupation policies” or “transitional your occupation policies,” you can work in another profession, but your benefits are reduced if your total income (from your benefits, employment, and other insurance benefits) ever exceeds what you made immediately prior to your disability. So, with these types of policies, your earning potential is essentially capped at what you were making before you became disabled (if you want to keep receiving benefits under your policy).
Transitional own occupation policies may seem attractive because they may have lower premiums, but it is important to know that they are not the same as true “own occupation” policies, and they can result in a reduced benefit payment and/or limit your options if a lucrative employment opportunity should ever arise.
While many policies contain the phrase “own-occupation,” including “transitional own occupation” provisions, they often aren’t true own-occupation policies and you shouldn’t rely on an insurance agent to disclose this information. Oftentimes, your agent may not even realize all of the ramifications of the language and definitions in the policy that he/she is selling to you. Additionally, most of the newer disability policies now contain language saying that you cannot rely on an agent’s statements and/or that agents cannot change the terms of a policy. Consequently, you should always read a policy from start to finish and make sure you have a clear understanding of what you are buying, before purchasing a disability policy.