Video and Transcript 5: A Modified Own Occupation Definition Of Disability
Georgia previously gave you a brief history lesson because it really does explain why this insurance product has become so complicated. With a modified own occupation definition, you have to be very careful. This is where the confusion takes place. Insurance companies that sell modified definitions of disability will carefully market the product as an own occupation policy, which may lead you to think it is a true own occupation plan when in fact it is not. We have witnessed this happen so often that we must say buyer beware. It is the reason why this video is so important. We want to warn you and to teach you what to look for so that you do not end up with a modified own occupation policy thinking that you have secured your specialty in the best possible manner. An example of a modified own occupation reads you’d be considered totally disabled if you’re unable to perform the material and substantial duties of your occupation as long as you are not working in any other occupation. Going back to the surgeon with a modified own occupation, as long as the surgeon is unable to perform surgery, he or she would receive a monthly cash benefit. However, as soon as he or she started to earn a salary, say as a medical director, the disability benefits would either cease or be reduced.
Christopher just gave you one example of a modified own occupation definition. Here is another directly from an insurance company’s website and I quote, “Medical own occupation disability insurance for doctors and dentists. Whether you can only perform some of your main responsibilities or can no longer perform any of them, you’ll have options. You could continue to work and receive a partial benefit, stop working and collect a full benefit, or switch gears to a new career while our medical own occupation disability income insurance helps make up some of the difference in your earned income.” Are you confused? You should be. This is just an example of how insurance companies will target market physicians and lead them into thinking their specialty and profession is receiving the best protection when in fact it is offering an inferior definition of disability. No matter how an insurance company or agent glorifies the modified definition, it will not allow you to collect total monthly benefits while simultaneously receiving a full salary working in another occupation.
When presented any marketing materials for disability insurance, always ask what the definition of disability is exactly in the policy. Match it to what you read here as the true own occupation definition. If there are any variations which seem to complicate the definition, stop and research further. In addition, ask the insurance company this simple question. Am I able to receive total disability benefits and still work outside my occupation and receive a full salary? Insist on receiving an answer from the insurance company directly, not a broker or advisor. And then ask for an example of how that definition works. You see, an insurance company that offers a true own occupation definition will be happy to provide you an example and often distribute examples in their brochures. Unless you undergo this process, you could be led into believing the policy you are purchasing has superior protection for your specialty when in fact it does not.
The least favorable definition of disability in a policy is referred to as an any occupation definition which reads you will be considered totally disabled if you are unable to perform the duties of any occupation by which the individual is suited by training, education, or experience. Found in social security and group disability plans, this definition means that although you may not be able to be a physician in your specialty and have subsequently lost your income, if you could work in any other capacity, you are not considered disabled. Going back to the example of the surgeon, even though the claimant could no longer perform surgery, if the individual could work in any other capacity, there would be no disability benefits. In summary, we ask that you remember three simple truths. One, only a true own occupation definition will provide the best protection for your specialty. Two, this definition is not found in group disability insurance or association plans. Three, it is the only definition which allows you to receive your total monthly benefit while simultaneously giving you the choice to work outside your specialty and receive a full salary without any benefit offsets whatsoever.