Any Occupation Disability Insurance
Once you make the wise decision to buy disability insurance, you have to decide what kind of disability insurance you want. Individual disability insurance policies can come with many options that let you customize your coverage and control your costs. One key issue is what you want the definition of disability to be, and whether you want an any occupation disability insurance policy.
How to Decide If You Need Any Occupation or Own Occupation Coverage
Cost is a factor, but it shouldn’t be the only factor. Think about it this way. If you buy a less expensive disability insurance policy that doesn’t provide benefits when you need them, your policy isn’t doing you any good. By spending a little extra to secure the coverage you need, you’ll get more value from your coverage, and you’ll protect your long-term finances.
Of course, you don’t want to waste money on pricey coverage terms you don’t actually need.
When deciding whether you need any occupation or own occupation disability insurance coverage, ask the following questions:
- Does your job have specific physical requirements? This could be anything from the ability to lift heavy objects to the ability to have a very steady hand. If your job has any requirements like this, you might want to consider own occupation insurance instead of any occupation insurance. However, if your job doesn’t really have any specific physical requirements, you might be OK with any occupation coverage.
- Does your job require extensive training and education? If you had to obtain an advanced degree in order to qualify for your position, you’ve put in significant time, money and energy into your field, and you may not be interested in retraining for a different industry. If that’s the case, you might want to consider own occupation insurance. However, if you would be fine with retraining for a different industry, you might be OK with any occupation coverage.
- Would you take a significant pay cut if you had to switch to a different job? If you earn an above-average salary in your current occupation, a job change could mean earning significantly less. If you would have to take a substantial pay cut, you might be interested in own occupation coverage. However, if you could find jobs that pay similarly in other industries, you might be OK with any occupation coverage.
Basically, it boils down to this: Could you imagine a disability that would keep you from working in the position you’ve trained for but wouldn’t prevent you from working in other positions, and would you be OK with switching jobs in that situation?
What Is Any Occupation Disability Insurance?
- Any occupation disability insurance is a type of disability insurance policy that uses an any occupation definition of disability.
- Disability insurance provides monthly benefits if the policyholder experiences a qualifying disability. This raises a critical question – what counts as a qualifying disability?
- According to the Social Security Administration, the law defines disability as “the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.”
- Individual disability insurance policies that you can buy from private insurance companies don’t necessarily use this definition. One big difference is that individual disability insurance can often pay benefits for disabilities that last for less than 12 months. A policy’s elimination period is how long you have to wait after experiencing a disability before you can become eligible for benefits, and it’s often only around 90 days.
- Individual disability insurance policies can also have different terms and exclusions. One key difference is whether the policy uses an any occupation definition of disability or an own occupation definition of disability.
Any Occupation vs. Own Occupation
- An own occupation disability insurance policy provides benefits if you can’t perform the duties of your own job because of your disability. An any occupation disability insurance policy provides benefits if you can’t perform the duties of any job because of your disability.
- Depending on your situation, this difference can be absolutely critical or mostly irrelevant.
- For example, let’s say you are a neurosurgeon. You develop a tremor in your hand and can no longer operate safely. There are still many jobs that you can do, but they would almost certainly involve a significant pay cut. Whether or not you qualify for disability insurance in a situation like this depends on the terms of your policy. If you have own-occupation disability insurance coverage, you can qualify for benefits if you can’t do the “material and substantial duties” of your job. Performing safe operations is clearly a key duty of a surgeon, so you should be eligible for disability benefits. On the other hand, if you have any occupation disability insurance, you only qualify for disability benefits if your disability prevents you from doing any job. Since you can still work, you probably won’t qualify for benefits.
- This could play out differently. In another example, let’s say you’re a computer programmer. It’s caused vision problems, a decline in cognitive function and movement issues, among other things. You can no longer perform the duties of your job as a computer programmer. Furthermore, you can no longer handle any job, and your doctor has ordered you to rest and focus on recovery. In a situation like this, you will likely qualify for disability benefits whether you have an any occupation policy or an own occupation policy.
Do You Need an Any Occ (or Own Occ) Policy?
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