Any-Occupation vs. Own-Occupation Disability Insurance

Disability insurance can be a game-changer for high-income professionals in specialized fields like medicine, dentistry and law. It protects your future income if you’re unable to work due to a long-term injury or illness. But with the right policy, you’ll have the option to continue working in another field while collecting disability benefits for your specialty income.

The two main types of coverage — any-occupation versus own-occupation disability insurance — provide very different levels of income protection. Keep reading to learn how each definition of disability affects your ability to successfully file a disability claim.

What’s the difference between any-occupation vs. own-occupation disability insurance?

The key difference between any-occupation versus own-occupation disability insurance lies in the scope of coverage, which is called the “definition of disability”. This is the criteria the disability insurance provider uses to determine if your situation qualifies for disability benefits.

With an any-occupation definition of disability, you must be unable to work in any occupation that suits your education, training and experience. So, if you’re injured but can still reasonably work in another capacity, regardless of whether it’s your field of expertise, you won’t qualify for benefits under an any-occupation policy.

Just imagine spending over a decade working hard to become an attending physician, accumulating six figures of student debt, only to find out you don’t qualify for disability benefits because you can “reasonably” take a $70,000 desk job.

But with an own-occupation disability insurance policy, filing a disability claim primarily hinges on your ability to perform the duties of your occupation at the time the disability began. In most cases, you can continue to collect full benefits if you decide to work in another field to earn additional income at the same time.

In short, any-occupation is a narrow definition of disability that makes it much harder to qualify for disability benefits. Whereas an own-occupation definition specifically protects your specialty income, ensuring you’re covered if you can’t work in your occupation, even if you’re able to pursue other types of work.

Is any- or own-occupation more restrictive?

Let’s consider a real-life scenario to highlight the differences in coverage for any-occupation versus own-occupation disability insurance.

Pretend you’re a surgeon who’s been looking forward to a well-deserved skiing vacation. But after a bad fall, you sustain a serious injury to your thumb and wrist. Suddenly, you go from, “I really needed this vacation,” to questioning, “Will I be able to return to the operating room?”

Under an any-occupation policy, you’d likely be left high and dry in terms of collecting disability benefits since you could still work in another medical role, even if it results in a significant reduction in income.

However, if you had opted for own-occupation coverage, this scenario would look much different. You’d receive a monthly payout based on your inability to perform surgeries. Depending on the exact definition of disability, you might even be able to pursue other income avenues, such as consulting or serving as a medical director, while collecting full disability benefits.

Why your definition of disability matters

We’ve established the importance of choosing own-occupation versus any-occupation disability insurance. Now, let’s further break down how nuanced the definition of disability can get.

To do so, let’s look at the different levels of own-occupation coverage available from the “Big 5” disability insurance providers:

When evaluating the differences in own-occupation coverage, the key is to look at:

1. Whether you can collect benefits while working outside of your normal occupation.
2. If so, how long you can work outside of your occupation without risking your disability benefits.

For example, Ameritas offers several variations of own-occupation coverage, including a hybrid definition that transitions from own-occupation after two years of benefits to an any-occupation definition.

But the nuances continue. Guardian offers an enhanced definition of true own-occupation that’s only available for physicians. With this enhanced language, you can collect full benefits even if you’re working in your own practice (or another occupation) if more than 50% of your income comes from either hands-on patient care or surgical procedures.

This highlights the importance of working with a knowledgeable insurance agent who can fully explain available definitions of disability as well as other optional policy riders. 

How much does any-occupation vs. own-occupation disability insurance cost?

The cost of disability insurance varies depending on the level of coverage. But it also depends on other individual factors, such as age, gender, occupation, state of residence and medical history. That said, own-occupation coverage is more expensive, considering it provides more comprehensive protection. However, for physicians and other high-income professionals with specialized skills, the cost difference is worth the investment.

Here’s a sample quote to give you a better idea of how much own-occupation coverage can cost depending on specialty and gender. Keep in mind that other factors influence premiums.

*Quote is based on a 32-year-old resident/fellow living in Ohio. Includes true own occupation definition, $5,000 base monthly benefit, $15,000 future increase benefit, residual / recovery and mental / nervous coverage added. 3% inflation rider. 90 day elimination period. Includes 10%-30% discounts available through SLP Insurance LLC.

Even if you’re a young resident or fellow with limited income, opting for an own-occupation policy while you’re at your youngest and healthiest stage of life will allow for cheaper rates.

If you can’t afford much coverage right now, it’s important to be strategic with your policy riders. For example, you’ll want to include a future purchase option (FPO) that allows you to increase your monthly benefits as your income increases or for other significant life events. There are several variations of FPOs, depending on the insurance carrier — some of which require an additional premium.

How to get affordable own-occupation disability coverage

Choosing a disability insurance policy takes careful consideration to ensure the best outcome if you ever need to file a disability claim. An experienced independent insurance broker, like SLP Insurance, can be invaluable when shopping around for the best own-occupation policy.

For one, we can explain the fine print, including the subtle differences in definitions of disability and options for enhancing your coverage through policy riders (e.g., partial disability benefits, cost-of-living adjustment, etc.) But we can also help ensure you aren’t paying more than you need to.

Independent brokers aren’t bound to one insurance carrier. Instead, we can prepare quotes from all of the “Big 5” disability insurance providers. Plus, we have access to exclusive discounts you won’t find elsewhere. As an added assurance, if we’re aware of a better deal, we’ll forward your business to that broker.

Let SLP Insurance be your trusted guide to choosing the right disability policy for your needs at the best price. Fill out the quote form below, and we’ll be in touch shortly!