Example: An orthopedic surgeon purchases an individual disability plan with a monthly benefit of $10,000. One year later, she begins to experience tremors in her right arm preventing her from performing surgery. A few months later she takes a teaching position at nearby ABC Medical School with an annual salary of $150,000. Will her disability contract pay her benefits? Well, it’s likely to depend on the definition of disability found in her policy.
If she has an any occupation definition and retains the ability to work in ‘any’ other occupation – such as her teaching position – the policy would not likely pay her benefits. If she’s capable of working in another (any) occupation, even at a lower salary, an any-occupation policy would not pay benefits. However, if she has own-occupation language in her contract, full benefits will likely be paid. The definition is specific to her occupation as an orthopedic surgeon. If she can’t perform those duties, she would be considered disabled and the policy would pay benefits – even if she continued teaching.
As a young physician, a contract with an own-occupation definition of disability is most offered preferred. But within the ‘own-occ’ family, there are variations of the definition that you should become familiar with:
- Modified own-occupation: This is the most prevalent type of definition of disability and it typically pays benefits if an insured is unable to perform the substantial and material duties of their occupation and are not working. This definition will not allow an insured to continue receiving full disability benefits if they work in another occupation – but can help replace any lost income.
- Specialty own-occupation: This may also be referred to as “own-specialty occupation” or “specialty occupation”. This language further defines and narrows what your occupation is. You are eligible to receive benefits if you’re unable to perform the specific duties of your own medical specialty – not just some other job in the medical profession. Without a ‘specialty’ definition in your policy, you open yourself up to the risk of an insurance company deciding whether, or not, they think you could work in another capacity or become gainfully employed in another occupation.
As a young physician you should pay careful attention to the specific own-occupation language found in any contract you’re considering. It’s not necessarily that one definition is better than the other. They’re just different – and they come with different price tags. The key is to understand the language, how benefits are triggered and what the coverage will cost you. It’s a combination of these things that should be considered when selecting the plan that best fits your needs.