Posted on: February 19, 2017 by Chuck Krugh, CFP
Most physicians who have spent time shopping around for disability income insurance, or actively doing financial planning for themselves and their families, understand the importance of the distinction between own occupation and any occupation language in disability insurance policies.
Naturally, a disability policy that covers you against injuries and illnesses that prevent you from working in your own occupation is more likely to pay out benefits than one that only pays if your disability prevents you from working in any occupation! It’s a much broader definition of qualifying disability!
But what does “occupation” mean? For doctors, a lot can ride on how the policy defines the term “own occupation.” Many orthopedic surgeons and heart surgeons would be put out of practice by injuries that prevent them from standing at the operating table for hours at a time, doing procedures that require a good deal of physical strength. But the same injury might still allow them to work in a much less physically punishing specialty, such as routine family care.
But the difference between an orthopedic surgeon and primary family care doctor represents quite a bit of money.
If you’re in a higher-earning specialty, or planning to enter one in the future, it’s worthwhile to take a close look at precisely how different carriers define the “own occupation” clause within their insurance contracts.
When it comes to insuring physicians, some insurers apply a stricter definition to occupation than others.
From the point of view of a practicing physician, the best kind of disability policy to own is one that states that you will be considered total disabled when your illness or injury are substantial enough to prevent you from performing the material and substantial duties of your occupation – and then adding a time element, such as ‘over the twelve months previous to the onset of the disability.’
At least one carrier includes language in its contract that commits to paying benefits even if you are gainfully employed in another occupation – as long as you can’t work in your former occupation due to your injury or illness.
This is a true “own occupation” policy, and is often a great fit for our clients who can qualify. But premiums are naturally comparatively high as well.
In other case, a less pure ‘own occupation’ policy works very well – especially if medical underwriting is more favorable or if you have preexisting conditions that make it more difficult to qualify with that particular carrier.
What to do now
If you are currently practicing in a relatively high-paying specialty, and are already own disability insurance, call us at 866-899-7318 for a no-obligation review of your existing coverage. We can take a look at your current coverage and walk you through a variety of common disability scenarios. This process can help you decide quickly if your current disability income insurance does what you need it to do, given your financial situation and goals.
If you don’t currently own disability insurance, or if all your coverage is employer provided and thus not portable, or you believe you may need additional coverage given your income level, again, call us today.
Meanwhile, take a few moments to fill out the form on this site to receive a free disability insurance quote. That will help us make better recommendations for you, and help get appropriate insurance coverage in place faster to help protect you and your family.