Becoming a physician is rewarding in time but is an ultimate investment that takes years of training and an abundance of student loan debt. If you develop an unexpected medical condition preventing you from working within your specialty, you will lose your income but not your financial obligations. You will still pay for student loans, mortgage, dependents within your family, and normal lifestyle expenses - let alone your medical expenses.
A disability insurance policy provides necessary protection to your income and lifestyle if you become disabled, but how does your policy define total disability? If you commit your entire career to a specialty only to lose the ability to perform the duties related to your current role, what then? That’s where a true own occupation disability rider comes in.
What Is True Own Occupation Disability Insurance?
Typically, a disability insurance policy will have a base definition within the policy stating that you are considered totally disabled if you are unable to work in your own occupation, and NOT gainfully employed in another occupation or specialty. Physicians are at substantial risk of disability due to the required fine motor skills and expertise to continue performing their hands-on patient care. If an Orthopedic Surgeon develops essential tremors or a Hospitalist cannot physically work in a hospital setting, they will collect the full claim if they are not working in any other gainful employment. However, with True Own Occupation, they will be able to use their board certification and expertise to work in another occupation or specialty.
So what is a true own occupation disability insurance policy? This is a definition of total disability that will consider you to be totally disabled if you cannot perform the substantial duties of your own occupation or specialty, even if you are still working in another occupation or specialty. The Orthopedic Surgeon, who developed essential tremors, can now earn an income in teaching, research, or a different occupation or specialty and still collect their full monthly benefit claim. The Hospitalist, who cannot physically work in a hospital setting, could still use their Internal Medicine board certification and work in telemedicine.
Benefits of True Own Occupation Disability Insurance
With true own occupation disability insurance, you’ll enjoy several benefits that include:
- Protecting your income by redefining your policy for the strongest definition of total disability for physicians.
- The ability to be gainfully employed in another occupation or specialty without losing your monthly benefits
When to obtain a True Own Occupation Disability Insurance Policy
The best time to purchase a true own occupation disability policy is when you’re healthy and young. When you first apply for coverage, insurance companies will undergo medical underwriting to determine your offer. If you do have any pre-existing conditions, they will likely be excluded but can sometimes result in being declined for coverage or further modifications. If you are a resident or fellow, we would recommend beginning to shop for true own occupation disability insurance policies.
If you already have a long-term disability insurance policy without true own occupation, we can help assess if this can be added to your existing policy as each insurance carrier differs.
Disability Insurers That Offer True Own Occupation
Several major insurers offer true own occupation disability insurance. However, each insurer may provide different definitions, disability qualifications, and policy options for the rider. Here’s a closer look at five major disability insurance companies and their various options for the definition of total disability.
Guardian provides true own occupation disability:
- Enhanced True Own-Occupation: You will be considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation (specialty), even if you are gainfully employed in another occupation. With this definition, there are 2 additional ways to qualify as totally disabled:
- Enhancement for Doctors Performing Surgical Procedures - If your occupation is limited to an M.D. or D.O. and more than 50% of income is earned from performing surgery, you are considered totally disabled even if you are gainfully employed in your practice or another occupation so long as you are not able to perform surgical procedures.
- Enhancement for Doctors Providing Hands-On Patient Care - If your occupation is limited to an M.D. or D.O. and more than 50% of income is earned from performing hands-on patient care, you are considered totally disabled even if you are gainfully employed in your practice or another occupation so long as you are not able to perform hands-on patient care.
Ameritas has two own occupation disability options from which to choose:
- Own Occupation for the Length of the Benefit Period: This is considered True Own Occupation. Total Disability means that as a result of sickness or injury, you are not able to perform the substantial duties of your occupation (specialty), even if you are gainfully employed in another occupation or specialty. Any income received from your new employment while collecting claims, due to the inability to perform your own specialty, will not affect your monthly benefits.
- Own Occupation and Not Working for the Length of the Benefit Period: This rider is nearly identical to True Own Occupation, except you cannot work in another occupation while you receive benefits. If you are working in another occupation or specialty while collecting claims, the claims would be adjusted based on your new income.
Standard has two own occupation disability options to choose from
- Own Occupation Rider: In order to add true own occupation, you will need to make sure this rider is attached to your disability policy. This rider considers you totally disabled if due to injury or sickness, you can no longer perform the substantial duties of your occupation (specialty), even if you are gainfully employed in another occupation or specialty.
- Regular Occupation Definition of Total Disability: If you do not attach the “Own Occupation Rider”, you will have this definition of total disability. This will consider you totally disabled if you cannot perform the substantial duties of your occupation or occupations, that you are regularly engaged in at the time your disability begins, and you are not working in another occupation. If you cannot perform within your specialty but decide to be gainfully employed in another occupation, you will receive partial disability claims.
Principal has 3 definitions of total disability to choose from
- Regular Occupation Rider: Principal does have True Own Occupation but the terminology they use is “Regular Occupation.” This is a rider, so we recommend checking to make sure it’s included within your quote or policy. You are considered totally disabled if you cannot perform the substantial duties of your occupation/specialty, regardless of the income you earn from another occupation or specialty while disabled.
- Transitional Occupation Rider: This is a rider that is very similar to True Own Occupation (Regular Occupation). If you are totally disabled from your own specialty, but you decide to work in another occupation or specialty while collecting claims, you will be able to do so. However, with the Transitional Occupation rider, you cannot profit while disabled. For example, let's assume you were earning $200,000 before you became disabled, and then started collecting $120,000 in annual disability claim benefits. If you decide to work in another occupation and earn $100,000, you will be earning $220,000 combined with disability benefits. Since this is $20,000 above your pre-disability income, Principal will need to offset your claims to make sure you do not earn more than your pre-disability earnings of $200,000.
- Base Definition of Total Disability: If you do not have any riders defining total disability, as listed above, you will be covered under Principal’s base total disability definition. You must be unable to perform the substantial duties of your occupation or specialty and you are not working in any other occupation. If you are working in another occupation, this will be considered a partial disability and claims would offset according to your new income earned.
MassMutual also offers true own occupation through a rider you will need to attach to the policy.
- Own Occupation Rider: Provides total disability benefits if you cannot perform the main duties of your own occupation/specialty, even if you are working in another occupation while disabled.
- Total Disability, or Totally Disabled, base definition: If you do not have the own occupation rider as mentioned above, you do not have True Own Occupation. Instead, you will have the base definition of total disability which states to be considered totally disabled, you must not be working at any other occupation while disabled.
Is a True Own Occupation Disability Insurance Policy Right for You?
The truth is that your disability insurance is only as good as your policy details and riders. Fortunately, we’re here to help you find the disability insurance policy that best suits your needs, specialty, and income.
Contact us today to learn more and discover if the true own occupation disability insurance policy is right for you.