"Own Occupation"

Don’t be blindsided by the simple words “own” and “occupation".  Joined together, in a policy of disability income insurance, these words become a minefield, ready to blow up your and your family’s life in the event of a disability. 

“Own occupation” is a complicated insurance policy phrase requiring your complete attention and understanding before you can believe you have done what you could to protect your own and your family’s future.

For those who don’t earn high incomes, the nuances of “own occupation’ clauses in disability income policies are not of great import.  But, to those earning the “big bucks” the definition of “own occupation” in their disability income policies can be the difference between life as they know it and an economic wasteland.

A cardiac surgeon making $750,000 a year and up, who becomes disabled and can’t practice and earn as a cardiac surgeon, adds a financial catastrophe to the already heavy burden of the disability.  Smart high earners insure themselves and their families by taking out “own occupation” disability policies to provide substantial disability benefits while they are disabled and unable to earn anywhere near their usual income. 

And, when buying these policies, these people are usually smart enough to ask their insurance agent or broker if their policy has an “own occupation” clause.  If the agent says “yes”, they feel content.  But that question hardly touches the core of what a person with a substantial income should be asking.

The major issue for the prospective policyholder is the way “own occupation” is defined in their policy.  Is it the occupation at the time you buy the policy or is it occupation at the time you become disabled?  Are there time limits on how long the ”own occupation” benefits will be paid?  How does the policy define “unable to perform the duties of your occupation”?  What happens if you start working in a totally different occupation while disabled? Are you entitled to benefits? Are there any other limitations or restrictions on the type of injury or illness which will trigger benefits in the event of a major disability?

Each of these issues is among a myriad of other considerations which have to be understood and evaluated before a high-earning professional can feel comfortable that whatever could reasonably be done to protect the family’s future has been done. 

Some other important considerations are:

* Should the renewal of your policy be guaranteed in case you contract an illness or injury which might lead your insurer to think it is in its best interests to cancel your coverage before you actually become disabled?
* Should you include a cost of living clause in the policy to keep your benefits in line with the cost of living since disability benefits may go on for years and years?
* Should you contract to continue benefits after age 65, the usual termination of policy benefits?
* Should you contract for residual (partial) disability in the event you still can do “some” but not “all” of your “own occupation”?

As with everything else, you have to pay for any additional coverage protection.  But, the important thing is that you should have the opportunity to decide before you buy the policy whether you want or need the added protection. 

So, if you are a person to whom an “own occupation” clause is important, you shouldn’t feel secure even if your insurance adviser assures you that your policy contains an “own occupation” clause. 

While you are thinking of it, read your disability insurance policy TODAY!   The language may be tough to understand but you can do it if you try.If you haven’t the time, get someone who knows to help you with it NOW.

Making the effort NOW is better than having your complacency shattered by receiving a letter from your disability carrier when the chips are down: BENEFITS DENIED!



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