How Can I Tell If I Have a True Own Occupation Policy?
We frequently consult with physicians and dentists who tell us they think they have an own-occupation (or “own occ”) policy. Unfortunately, not all of them actually do. Sometimes, it turns out that even the insurance agent who sold the policy didn’t realize the policy doesn’t offer true own-occupation coverage.
Your ability to collect on your insurance policy depends first and foremost on the exact definition of “total disability,” so it’s important to make sure you know whether or not your “total disability” provision offers true own occupation coverage long before you want to file a claim.
Start by getting a copy of your policy, then turn to the “Definitions” section. Look for the term “Total Disability” or “Totally Disabled,” then compare what your policy says to the examples below.
The Best True Own-Occupation Provisions
Total Disability means that, because of your Injury or Sickness, you are unable to perform one or more of the Material and Substantial Duties of your Own Occupation.
Disability or Disabled means that because of an Injury or Sickness, You are prevented from performing at least one of the Material Duties of Your Regular Occupation.
These provisions are now rare, but they provide the very best own-occupation coverage. Why?
- They pay benefits if you are working in another occupation; and
- Unlike the typical own-occupation policies, which require that you be unable to perform all of your material and substantial duties, these provisions pay benefits if you are prevented from doing any of your material and substantial job duties.
If you have one of these provisions in your disability insurance policy, you should strongly consider keeping this coverage in force!
Very Good Own-Occupation Provisions
“Total Disability” and “totally disabled” mean injury or sickness restricts the Insured’s ability to perform the material and substantial duties of his regular occupation to an extent that prevents him from engaging in his regular occupation.
“Total Disability” means a disability of the insured:
- Which results from sickness or accidental bodily injury of the Insured; and
- Which prevents the Insured from engaging in the regular occupation of the Insured, even if the Insured is engaged in a different occupation.
These types of provisions offer some of the best “true own-occupation” coverage available. Many of these policies aren’t even sold anymore, but doctors who bought them in the 1980s and 1990s can still take advantage of the smart investment they purchased.
What makes these policies so favorable is that:
- They pay benefits even if you’re working in a different occupation; and
- They pay benefits if you are prevented from working in your regular occupation.
This particular type of own-occupation provision can be construed more broadly than provisions that only pay if you can’t perform your material and substantial duties. Under these policies, if you can still do one of your material and substantial duties, but not long enough or well enough to engage in your regular occupation, you can still collect benefits. For instance, if you are an endodontist who can only sit long enough to do one short procedure per week, no one would refer cases to you and no practice would hire you. Even though you can technically do one of your material and substantial duties, you can’t do it with the pace and persistency required to actually work as an endodontist.
Good True Own-Occupation Provisions
You will be considered totally disabled if you are unable to do the substantial and material duties of your regular occupation.
“Total Disability” means that because of Injury or Sickness, You are unable to perform the important duties of Your Occupation.
Total disability means that, because of sickness or injury, you are not able to perform the material and substantial duties of your occupation. You will be totally disabled even if you are at work in some other capacity so long as you are not able to work in your occupation.
While not as flexible as the older own-occupation policies, these types of policies still provide true own-occupation coverage, because they pay benefits even if you’re working in a different occupation. These are typically the most favorable policies you can buy today. Though they are more expensive than other policy types, they offer the greatest coverage for doctors who can no longer practice in their particular job, making them worth the investment—particularly for specialized fields like interventional pain medicine/anesthesia, surgical medicine, endodontics, cosmetic dentistry, and the like.
Weaker True Own-Occupation Provisions
Total Disability means that due to Injuries or Sickness you are unable to perform the duties of your occupation.
Total Disability or Totally Disabled means that, because of sickness or injury, you are unable to perform all of the duties of your occupation.
These policy types offer true own-occupation coverage in that they allow you to collect benefits even if you’re working in another occupation, but their particular wording makes them more difficult to collect on. Rather than requiring that you be unable to perform the “material and substantial” or “important” duties of your occupation, these policies require that you are unable to perform your job duties. For example, if you’re a surgeon who cannot perform surgery because you have an essential tremor, but you can still read x-rays and consult with patients, the insurance company can assert that you can still do some of your job duties, and are thus not totally disabled.
Provisions That Are NOT True Own-Occupation
Total Disability means solely due to Injury or Sickness,
- you are unable to perform the substantial and material duties of Your Occupation; and
- you are not working.
Total Disability/Totally Disabled – Because of Your Injury or Sickness:
- You are unable to perform the substantial and material duties of Your Regular Occupation; and
- You are not engaged in any other gainful occupation.
Total Disability or Totally Disabled means that, as a result of Sickness or Injury, You are unable to perform with reasonable continuity the substantial and material acts necessary to pursue Your Usual Occupation in the usual and customary way and You are not working in any occupation.
Until the end of the Initial Period, the Insured is totally disabled when he is unable to perform the principal duties of his occupation. After the Initial Period, the Insured is totally disabled when he is unable to perform the principal duties of his occupation and is not gainfully employed in any occupation.
The Insured is Totally Disabled if he/she cannot perform the main duties of his/her Occupation due to Sickness or Injury. If the Insured is not working in any occupation, we will pay the Total Monthly Benefit. If the Insured is working in a new occupation, we will base the benefit on the Insured’s Loss of Income.
Beware of these policy provisions. While they do contain the phrases “your occupation” and the like, none of these policies offer true own-occupation coverage, because:
- They only pay total disability benefits if you are not working in any occupation/are not gainfully employed, meaning that you can’t work in another job and still collect benefits; or
- They pay benefits if you’re working in another occupation initially, then stop allowing you to work in another occupation after a certain period of time; or
- They pay benefits if you’re working in another occupation, but they only provide a portion of your total benefit amount.