Comparing the definitions of disability
Tuesday, March 31st, 2009
When inspecting your possible disability insurance needs it’s crucial to understand the fine print of your policy. Unlike life insurance there is much more greyzone surrounding what qualifies for potential claim.
The definition of disability used in a disability insurance contracthas a direct impact on the insuredsability to collect when he/she needs the money most. Below are three coremeanings of disabilities used in major illness and injury disability insurance contracts.
Any Occupation
Under this first definition, total disability means the absolute inability of client to be employed at any kind of occupation. That’s why if you are IT consultant and your problem prevents you from performing your necessary occupation duties but you can still gainfully work as (for example) clerk you will see your claim denied.
Regular Occupation
Under this definition, total disability represents the inability to perform your regular occupation due to an illness or an injury.
Own Occupation
Is the gold spin]standard|basic|normal[/spin] definition - Under this definition, total disability is also defined as the inability to perform your regular occupation no matter if you can work in another gainful occupation.
All your are closer the better the definition of mentioneddisability the more you get. It has meaning because the insurance company has an increased likelihood of paying out your claim. The question concerning the Any Occupation classification found in some disability group plans is it leaves a outstanding deal of foggy area surrounding the insured’s option to find place at another occupation during the time of claim. The upgrade from Any to Regular Occupation
represents significant value. However, The upgrade from Regular Occupation to Own Occupation can
rise question in particular instances. An Own
Occupation classification provides the gain in a very skilled employment such as a a scientist but less value for employments such as white collar. The main reason for this is an expert could easily have an injury (speaking about surgeon for example) to his/her hands which prevents from being a surgeon but allows he/she to work as a physician. In this case the insured would continue to get the disability benefits even though the client is gainfully employed as a family physician. The possiblity of white collar or even a lawyer collecting under the Own Occupationclassification is much more smaller.
The “own occupation” classification is not cheap - usually ranging in a plus cost of 20% to 30% of the base premium.
As an example - on a disability insurance policy with $1,500 a year premium the own option can take a plus $300 to $450 a year.
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