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Products  Disability Insurance (DI) Definition of a Disability
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Definition of a Disability
The Best
Own-Occupation Definition – “True Own-Occ”
Sample Policy Language:
"You are unable to perform the substantial and material duties of Your Regular Occupation; and you are under the regular care of a Physician appropriate for your Injury or Sickness."
Translated:
The insurance company will consider your client's occupation to be the occupation he/she is engaged in at the time he/she became disabled. It will pay benefits even if your client returns to work in another occupation. When possible, use policies that contain the true Own-Occupation definition.
Example:
A trial lawyer, Mr. Stevenson, damages his vocal cords and prevents him speaking, thus making it so that he can no longer lead a case in the court room, he can collect disability benefits even if he returns to work as a research attorney. So, for example, as a Trial Lawyer he earned $250,000 per year. He had a DI benefit of $150,000 per year. While collecting DI benefits of $150,000 per year, he can earn an income of $200,000 per year (or any other amount) as a research attorney.
Solid Coverage
Modified Own-Occupation
Sample Policy Language:
"You are unable to perform the substantial and material duties of Your Regular Occupation; and you are not engaged in any other gainful occupation; and you are under the regular care of a Physician appropriate for Your Injury or Sickness."
Translated:
Your client can return to work in another occupation, but will not receive the full benefit. Instead they will receive the same ratio of their benefit as the ratio of their old income to the newer income.
Example:
The same trial layer above, Mr. Stevenson, becomes a research attorney and can no longer collect his full disability benefits. His disability benefit will be based on a percentage of lost or reduced income. In this case, his annual benefits of $150,000 would be reduced to $120,500 due to having a 20 percent loss of income. Remember, his income is now $200,000 instead of his pre-disability income of $250,000.
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