As we observe Independence Day this weekend, let’s consider how much “freedom to choose” you would have if you became totally disabled. If you are a physician or dentist, I assume you have some type of disability insurance. Do you have “True” Own Occupation coverage?  “True” Own Occupation is the definition of total disability that offers the most potential “freedom to choose” during a claim.

What is “True” Own Occupation?

Though each carrier has its own wording for its definition of total disability, a generic version of “True” Own Occupation reads as follows:

  • You will be considered totally disabled if, due to injury or sickness, you are unable to perform the material and substantial duties of your occupation.

That’s it. No added restrictions.

Freedom to Choose

Let’s assume you are a physician or dentist who purchased a $12,000 per month policy with “True” Own Occupation coverage. Later, you become totally disabled and lose the ability to perform the material and substantial duties of your occupation. In this situation you would likely qualify to receive your $12,000 disability check every month.

While you are at home and not working, you’ll be collecting your $12,000 monthly disability check. However, you begin to get restless and you want to work again. You can’t go back to your original occupation because you’re disabled and you can’t perform the duties of your original occupation. However, you might be able to do a less demanding, less physically skilled job, such as teaching. Perhaps you’d like to take a teaching position at a local dental or medical school with a salary of $10,000 per month. However, you’re concerned that taking another job would jeopardize your $12,000 monthly disability check.

Fortunately, you have “True” Own Occupation coverage, so you will have the freedom to choose without being penalized:

  • You can choose to stay at home and not work and continue to receive your $12,000 monthly disability check, or
  • You can choose to take the teaching position, receive the full $10,000 monthly salary from that job, AND continue to receive your full $12,000 monthly disability check.

That’s the beauty of “True” Own Occupation and an important reason why it means freedom of choice for you at claim time. Anything less than “True” Own Occupation would penalize you in some way in this type of claim situation.

More Restrictive Definitions of Total Disability

You may wonder why I use the term “True” when I refer to Own Occupation in this post. It’s because so many insurance companies claim to offer Own Occupation coverage when they’re really offering a restrictive substitute. Below are two common examples of some carriers’ definitions of total disability that are sometimes represented as “True” Own Occupation, but are really a poor substitute:

1. “Modified Own Occupation”

  • You will be considered totally disabled if, due to injury or sickness, you are unable to perform the material and substantial duties of your occupation, and
  • You are not gainfully employed in another occupation.

2. “Own Occupation, Then Any Occupation”

  • For the first 24 months of benefits, you will be considered totally disabled if, due to injury or sickness, you are unable to perform the material and substantial duties of your occupation,
  • Thereafter, you will be considered totally disabled if, due to injury or sickness, you are unable to perform the duties of any reasonable occupation.

As you can see, “True” Own Occupation is the only definition of total disability that does not add restrictive language. And that’s why “True” Own Occupation means freedom of choice for you.

Less Freedom With “True” Own Occupation Substitutes

Let’s examine how “Modified Own Occupation” and “Own Occupation, Then Any Occupation” would have treated you in the hypothetical disability scenario above:

1. Modified Own Occupation

This definition of total disability would have considered you totally disabled as long as you remained at home and not working in another occupation. However, their definition states that you cannot be gainfully employed in another occupation and still be considered totally disabled. With this definition, your concern that taking the teaching job could adversely affect your $12,000 monthly disability check would be well founded. You would be penalized for going to work in another occupation while on disability claim. Taking the teaching job could cause you to lose all or part of your $12,000 monthly disability check. The restrictions of Modified Own Occupation mean less freedom for you at claim time.

2. Own Occupation, Then Any Occupation

This definition of total disability would have considered you totally disabled for the first 24 months of your disability. Thereafter, you would be considered totally disabled only if you are UNABLE to perform the duties of another reasonable occupation. With this definition, after 24 months of disability, you would be penalized simply for being ABLE to perform the duties of the teaching job, whether you actually accepted the job or not. At this point, you would not have the freedom to choose to stay home, not working, and continue to receive your full $12,000 monthly disability check. If you are able to work at the teaching job or any other reasonable job, the insurance company will stop sending the check, and you would be force to work in another occupation, whether you liked it or not. The restrictions of “Own Occupation, Then Any Occupation” are excessive. That’s why this definition of total disability should be avoided whenever possible.

Believe it or not, many physicians and dentists are currently covered by policies with “Modified Own Occupation” and “Own Occupation, Then Any Occupation” – and most probably don’t realize it. Many individual policies have “Modified Own Occupation” as their definition of total disability, especially if the insurance carrier does not specialize in physicians and dentists. Many employer group disability policies (LTD) and professional association policies also have “Modified Own Occupation” and some have “Own Occupation, Then Any Occupation” as their definition of total disability.

Steps You Can Take Now

Take a look at your disability policy. Which definition of total disability does your policy have? You need to know. Don’t take the insurance company’s or the insurance agent’s word for it. Whether you have an individual or group policy, read the policy to find out which definition of total disability it has. If you can’t find your policy, call the insurance company and order a duplicate policy. When you receive the duplicate policy, read it and find out if you have “True” Own Occupation. If you need help doing this, contact a specialist in disability insurance for physicians and dentists.

Get “True” Own Occupation coverage and celebrate your freedom to choose. Happy 4th of July.

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