I often have physicians around the country contacting me looking for the best available individual disability insurance policy to protect their income. The definition of disability is the most important part of the contract because this is the way the company determines if they are going to pay a claim.
A true own occupation definition states that if due to sickness or injury and you cannot work as a physician, in your specialty or sub-specialty or whatever it is you are doing at the time of claim, it will pay you your monthly benefit. A true own occupation definition policy will not reduce the benefits even if you work in another occupation.
Here is where it is important that you work with an experienced independent broker because not all contracts are the same and physicians often receive mixed information.
First of all, not all contracts call their definition “own occupation.” For instance, Principal has a “regular occupation” definition of disability. Although it is not called own occupation, the language is the same. It states if due to sickness or injury and cannot work in you occupation, it will pay you your monthly benefit regardless of income earned elsewhere. MetLife calls their own occupation “your occupation.” Again, it still covers you in your medical specialty the same way.
Some companies offer own occupation for a shorter period (2 or 5 years) and thereafter the policy becomes an “any occupation” definition where it won’t pay a benefit if you are able to work in any occupation. This can be very tricky. I have had doctor clients come to me asking about some of these companies and the agents didn’t properly tell them that the own occupation definition is only for 2 years!
Association plans tend to be marketed as having own occupation but again, many of them are only own occupation for 2 years. Sometimes this is found in the small print and sometimes it is front and center. It is important to read the literature carefully!
If you are a physician and later change medical specialties, you do not need to modify your policy. For example, if you started out as an internal medicine medical resident and later change to a cardiology specialty, your policy will cover you as a cardiologist even though you purchased your policy while practicing internal medicine.
Some companies offer a “transitional occupation.” These policies still cover you in your medical specialty. The difference is that it will start to reduce benefits if you earn more income elsewhere that exceeds your pre-disability income.
Some companies give you the option of a “modified own occupation.” This typically says it will cover you and pay you benefits if you cannot work in your medical specialty and are not working. This reduces the cost of the policy.
For more information about own occupation definitions of disability or to request a personalized quote comparison, contact Set for Life Insurance today!
