Disability Insurance: Own Occupation vs Any Occupation

Disability income contracts are intended to protect you from income loss when you are sick or injured. The most important factor of the contract is how disability is defined. Long-term disability is intended to protect those who are totally disabled from performing their duties. Many contracts not only provide benefits while the claimant is disabled from working, but also require an earnings loss from the disability. Many assume that long-term disability is too expensive, however, employer sponsored long-term disability is generally very inexpensive compared to a personal long-term disability contract.

Own Occupation

This term refers to when a claimant, whether they are in a group or individual disability contract, is disabled because they are unable to perform the material and substantial duties of their occupation. This definition is still met when the claimant is totally disabled and not working at all. Typically, group policies have a limited term policy, a two-year Own Occupation period for selected employees. After that two-year period is up, the contract continues to pay but the definition changes to Any Occupation. Some limited term policies provide claimants with a 5-year benefit. However, some contracts will continue to use the definition, Own Occupation, until the claimant turns 65 years old or to their Social Security Normal Retirement Age. It is unusual to see an individual disability policy with anything less than Own Occupation coverage.

Any Occupation

Any Occupation, also known as Any Gainful Occupation, refers to when a claimant is unable to perform the material and substantial duties of any gainful occupation. Any Gainful Occupation refers to an occupation where a person’s performance is based on education, training, and experience. The Gainful Occupation may be required to provide the claimant with a defined income level in order to no longer be classified as disabled.

For more information about long term disability insurance in California please contact Bernardini & Donovan Insurance, located in Redlands.

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