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Understanding "Own-Occupation" Disability Insurance

Most advisors hear that "Own-Occupation" Coverage is the best coverage - but there are so many sub-categories that get agents and advisors, alike, confused.


Think of the claim as having two different claiming definitions.The first being the qualification for what is claimable, and the second being the amount of income you are allowed to keep in another occupation.

  • True Own Occupation Allows you to earn any amount of money in a new occupation if disabled, and receive no offset in disability benefits

  • Transitional Own Occupation Allows you to earn up to 100% of your original occupation’s pre-disability income before any offset in income benefits would occur

  • Modified Own Occupation Disability benefits would be reduced if you earn more than 20% of your pre-disability earnings (treated as partial or residual disability)

  • Temporary Own Occupation Some policies will have a temporary period where you are covered under “own occupation” language, and then the policy will convert to “any occupation”. Most often it will happen after 2 years (many association or group policies are set up this way)

  • Any Occupation You must be unable to work in any occupation you are reasonably qualified for

While “true own occupation” coverage is ideal, it is also the most expensive.  If you are looking to cut cost on your premiums, you may want to consider another form of “own occupation”.  Give us a call and we can help you decide what policy would best fit your needs.


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