The first component to confirm in disability protection is the definition of disability, which determines what must occur before someone can collect policy benefits. While there are several definitions available, for physicians it’s recommended to have an “Own Occupation” definition of disability, which pays benefits if you are unable to perform the duties of your current occupation.
However, if you earn income from another occupation or source it can reduce or eliminate policy benefits.
The True, or Specialty, Own-Occupation definition states that you’re considered disabled if, due to injury or illness, you’re unable to perform the material duties of your current occupation. In addition, there is no penalty for engaging in a different occupation or earning income from another source while on claim. This is the ideal definition because if you become disabled from your current occupation, you can then work in another occupation (consult, teach, write a book, etc) without jeopardizing policy benefits.
The other definition is the version typically found in many employer and group policies not requiring medical underwriting. Often called “modified” own-occupation, this version also pays benefits if you’re unable to perform the duties of your current occupation. However, if you earn income from another occupation or source it can reduce or eliminate policy benefits.
Yes, because these definitions are very different in actuality. Most disabilities are not catastrophic. Without the true own-occupation definition, you would be penalized for earning income from another source while on claim, which can be a significant length of time. A number of our clients on claim are still able to make valuable contributions for which they can be and are compensated.
Combining the permanent discounts we can obtain with the accurate pricing of the top insurance carriers, the cost for the true own-occupation definition can be very close to the cost for the lesser definitions. It’s definitely worth exploring based on your specific occupation, age and health.
Click on the video below to see Billy being interviewed by Dr. Jeremy Pyle, a plastic surgeon in Raleigh, NC, regarding disability insurance. This educational series has been shown to residents and fellows across North Carolina.