Should I Buy “Own Occupation” or “Any Occupation” Disability


If for any reason that you are under the impression that if you’ve seen one disability policy, you’ve seen them all, then I have some news that may be a real shock. There are two important definitions, and which your policy relies on can affect your ability to make a successful disability claim. The definitions pertain to your occupation, and specify whether own occupation or any occupation is a factor in determining if you’re fully disabled under the terms of the policy.

Own Occupation Disability Insurance

Under an own occupation definition, disability would be established as a result of your inability to work in your current occupation. That means that you wouldn’t have to prove that you are unable to work in any capacity, but only within your own field.

So let’s say that you are a dentist, a truck driver, or a nurse – any injury or illness that would prevent you from performing the primary tasks within those fields would qualify you for benefits under your disability plan.

It wouldn’t matter that you may have a secondary ability to be a teacher, a lab assistant, or a dispatcher for a trucking company. As long as you can’t perform your duties under your occupation, you’ll be considered to be disabled eligible for benefits.

Any Occupation Disability Insurance

As the name implies, any occupation disability insurance is much more open ended. Under such a definition, it wouldn’t matter if you are in a highly specialized career field, such as engineering, and could no longer work in that capacity. If you can be a security guard, a fast food worker, or a greeter at Walmart, you’ll not fit under the plans definition of disability.

Obviously, this type of definition would require a serious level of disability, one that would restrict you from participating in almost any activity. That means that will be more difficult to have benefits paid from a policy that contains this type of language.

“Any” in this case means just that. If there is any capacity that you can work in, regardless of how unrelated it is your current occupation, you will not be considered disabled, and therefore not eligible for benefits.

Important Any Occupation Provision. There’s an even more concerning provision here, and that has to do with income. Disability policies that define disability as any occupation usually do not include any kind of earnings test. That means that even if you were disabled to the point that you can no longer work in a job that pays $100,000 per year, you would be excluded for benefits if you are deemed to be qualified to take a job that pays no more than $20,000 per year.

Which is More Restrictive?

An any occupation provision is by far more restrictive. While under an own occupation provision you merely have to prove that you can no longer work in your current field, under any occupation you must prove that you are entirely incapable of working in any job or business.

Such a policy would certainly be valuable if you were disabled to the point of be completely incapable of working at all. That arrangement would be far better than having no disability insurance coverage whatsoever.

The likelihood of collecting benefits under an any occupation disability policy may be extremely remote. Except for those who are severely disabled, most people are able to work relatively low stress jobs, such as security guard, parking lot attendant, and even toll taker.

Which Policy Will Cost More in Premiums?

This is the reason why someone might choose an any occupation disability policy over an own occupation policy. Since own occupation policies have a far less restrictive definition of what constitutes disability, the premiums will be higher, and maybe substantially so.

This is because under an own occupation policy there is a far greater likelihood that the insurance company will have to pay out benefits. For example, if you’re a dentist and you injure one of your hands, you will certainly be a career ending injury. That would be of the insurance company would have to pay benefits to someone who is employed in a high income occupation, that likely require maximum benefits.

Since an any occupation policy is far less likely to payout benefits of any amount, the premiums are likely to be much lower.

Always Read the Definition of Disability in your Policy

Before accepting any disability insurance policy, you must first read the policy declarations thoroughly, including and especially the section on the definition of disability. It will spell out whether or not policy provides for payment of benefits under own occupation or any occupation, and that by itself make all the difference in the world.

But beyond own or any occupation, you should also carefully examine the definition to see if there any particular exclusions. Many insurance policies contain language that is extremely specific regard to under what circumstances they will pay benefits. Make sure that the language is consistent with your understanding of what constitutes disability in your line of work.

For this reason, disability insurance should be purchased only through trained, experienced professional. Do-it-yourself attempts to purchase disability insurance could end up being a complete waste of money, where you’ll be paying for benefits that you will never receive.

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