Many disability insurance policies, especially long-term disability policies, contain offset provisions that reduce the amount of your monthly benefit if you receive income from other sources, such as Social Security disability or retirement, unemployment compensation, worker’s compensation, no-fault auto insurance, sick leave, severance pay, and others.
Click here for more information about how offset provisions can reduce your monthly benefits.
This is a term that is used in Business Overhead Expense policies. It represents the total maximum benefit payout, and is calculated by multiplying the monthly benefit by the number of months in the benefit period.
Generally speaking, “own occupation” (“own occ”) provisions state that an insured will be considered disabled if he or she is no longer able to perform the duties of his or her occupation.
In some instances, the insured’s occupation is expressly defined as a particular job or specialty—for example, a group policy intended for dentists might define occupation as meaning “dentist” or something even more specific, such as “oral surgeon.” In most cases, occupation is defined as the occupation the insured was engaging in at the time of disability—not the occupation the insured was engaged in when he or she purchased the policy. This is significant, because it means that you can alter your occupation if you stop performing certain duties, take on another occupation, or change jobs prior to filing your disability claim.
Many people also think that there is only one kind of “own occupation” policy. In actuality, insurers have created several different variations of the “own occupation” provisions, so you must be sure to read your policy’s particular language carefully, even if your agent tells you that you are receiving an “own occupation” policy.
Click here for more information about the different kinds of “own occupation” provisions and how they can affect your ability to collect disability benefits.