The most important factor to take into consideration when choosing to protect your income with disability insurance, is the DEFINITION of total disability on your policy.
All white collar occupations should be protected with a DI policy that has “own-occ” definition of total disability. This will allow you to work in another occupation and still receive 100% of disability benefits, if you can’t work in your occupation.
Doctors want to make sure their definition of disability protects the duties of their medical specialty. A surgeon who gets his income exclusively from performing surgeries, can become totally disabled in his specialty if he or she develops a condition or has an accident affecting a hand or even a finger. This person could continue working in medical field as a General Doctor, for example; Specialty Own-Occupation DI will pay 100% of disability benefits regardless of the new income received from the new specialty/occupation, if the surgeon can’t perform the duties of surgery specialty.
Modified Own-Occupation Definition
Also called Own-Occ and Not Working – this definition of disability gives the client the option to choose not to work in another occupation, if she or he can not perform the duties of their regular occupation – and receive 100% of DI benefits. If they can’t work in their occupation and do choose to work in another occupation, then the disability becomes residual or partial, and residual disability benefits will be paid, based on the % of loss of income. If the income from the new occupation is the same or higher than the old occupation, no loss of income occurs and no benefits will be paid at that point under this definition of disability.
Limited Own-Occupation (2 years Own-Occ; 5 years Own Occ)
Own-Occupation for 2 or 5 years, and Not Working thereafter – will provide the best definition of disability for the first years of a disability giving you enough time to try to recover and figure if you will be able to go back to work or if you’re still disabled and unable to do any of your job’s duties, and maybe consider taking another job. This definition of disability may be the only option for certain occupations, or some may choose this definition for the lower cost versus the full or true own-occupation definition.
If you have any questions about the disability insurance definitions, contact one of our experienced disability insurance professionals. Email INFO@LifeGuy.com or call 877-LIFE-GUY