What is True Own-Occupation?

If you are a medical professional and you have done any research at all about disability insurance, you have probably heard of the term “true own-occupation.” It can be a little confusing to understand exactly what that means and do you really need it on your policy? Let’s break it down: 

The definition of disability on a policy is essential to understanding what types of claims would be covered if you were ever disabled and out of work. These definitions range from very narrow to broad in their coverage potential. The two most common definitions we are going to look at here are “true own-occupation” and “any occupation.” 

“True own-occupation” is often referred to as just “own-occupation” or “regular occupation” There are other forms of “own-occupation” that we will get into in later blog posts, so for the sake of this article, we will refer to the definition as “true own-occupation.”

The “any occupation” definition of disability is the standard definition on a lot of insurance contracts. Under this definition, if you are able to work in any capacity in which you are suited for by education, experience or training, regardless if you actually take another job, you would not be paid your disability benefits. This is a very strict definition of disability which is harder to qualify for a claim, however it is cheaper to have on your policy.

The “true own-occupation” definition of disability is defined by any condition that would prevent you from performing the material and substantial duties of your regular occupation, even if you are gainfully employed in another occupation. This is the most broad terminology and protects your income better than any other definition. It does, however, come at a cost of an increase in premium. Some insurance contracts use this as the default definition of disability, and other insurance contracts you would have to specifically endorse this as a rider on the policy. This definition is typically recommended for medical and dental professionals to best protect them in their medical specialties. 

Let’s break down how this would play out in an example: 

A surgeon gets in an accident and loses complete use of their right hand. They are now unable to perform their regular surgical duties as they have in the past. This surgeon has an offer to continue teaching at the medical school now that they can no longer continue in their surgical specialty. 

If they have an “any occupation” definition on their insurance policy, they would not qualify for any disability benefits because even though they are out of work, they are still qualified to continue teaching at the medical school, even if they choose not to take the job. 

If this surgeon has a “true own-occupation” definition of disability on their policy, they would be able to receive the full disability benefit of the policy after satisfying the elimination period, even if they choose to take the offer to teach at the medical school. They would be able to “double dip” if you will, as they could collect their benefit from the insurance carrier as well as their new salary as a teacher. This is all because they cannot perform the duties of their specific medical specialty under the “true own-occupation” definition of disability. 

As you can see, the definition of disability on your policy can be very critical. If you are a physician, dentist or other similar medical professional, you will want to make sure you have the “true own-occupation” definition of disability on your policy to fully protect your years of education, training and future earning potential.