The basic premise of a long term disability insurance contract is this – you and the insurance carrier sign an agreement that says the insurance carrier will pay you a monthly benefit in the event that you become disabled.
But what actually determines whether you are considered disabled?
It depends on what the definition of disabled, or “Total Disability”, states in your insurance contract, and there can be many definitions.
Let’s take a look at a few of them.
We will start with arguably the best definition of disability, which all doctors should have in their insurance policy.
Under the own occupation disability insurance definition, you will receive benefits if you are unable to work in your “own occupation”, regardless of whether you find employment in another occupation or field of work.
Own occupation language in your disability insurance policy will typically look something like this:
"You will be considered totally disabled if you are unable to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation."
Let’s apply this own occupation disability insurance definition to a potential scenario:
Jim is a surgeon who loves HGTV’s Fixer Upper, and when he is not practicing medicine, he likes to spend time working on his home. One fateful weekend, Jim’s hand slips on a saw and his finger has to be amputated. Jim is no longer able to perform surgery but may be perfectly capable of working in another medical specialty, or even in a completely different occupation outside of medicine.
Under the own occupation disability insurance definition, Jim is unable to perform the material and substantial duties of his own occupation – aka he cannot perform the duties of being a surgeon. If Jim has an own occupation disability insurance policy, he will receive full benefits regardless of whether he chooses to work in another medical specialty or even a different career outside of medicine. This is why the own occupation definition provides the most flexibility for the policyholder and is a critically important feature in disability insurance for doctors.
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Here’s the exact language in each of the major own occupation disability insurance policies for doctors.
Ameritas: Own occupation disability insurance language
Total Disability or Totally Disabled means that, solely due to sickness or injury, you are not able to perform the material and substantial duties of your occupation.
Your occupation means the occupation or occupations that you were engaged in, based on the duties you were performing for wage or profit, at the time disability began. If you are not employed at the time of disability, your occupation means any occupation you are able to perform based on your education, training, and experience.
If you are a physician or dentist and have limited your duties to the performance of the usual and customary functions of a specific, professionally recognized medical or dental specialty, we will consider that specialty your occupation.
Ohio National: Own occupation disability insurance language
Total Disability or Totally Disabled: You have a Total Disability or you are Totally Disabled if due to a Sickness or Injury, in and of itself, you are not able to perform the Material and Substantial Duties of Your Regular Occupation, and you satisfy the Regular Care of a Physician provision in the policy.
Your Regular Occupation: The occupation(s) in which you are regularly engaged on the date of Disability. If Your Regular Occupation on the date of Disability is limited to a professionally recognized specialty in medicine, dentistry, or law within the scope of your degree or license, we will deem that specialty to be Your Regular Occupation. If you are unemployed, retired, or otherwise not working on the date of Disability, Your Regular Occupation means any occupation you are able to do based on your education, training, and experience.
The Standard: Own occupation disability insurance language
Total Disability/Totally Disabled means that due to your Injury or Sickness:
- You are unable to perform the Substantial And Material Duties of your Regular Occupation.
- You are under the regular care of a Physician appropriate for your Injury or Sickness. This Physician’s care requirement will be waived when we receive written proof, satisfactory to us, that further care would be of no benefit to you.
If you are a physician or dentist and have limited your Regular Occupation to the performance of the Substantial And Material Duties of a single specialty recognized by the American Board of Medical Specialties (ABMS) or American Osteopathic Association Bureau of Osteopathic Specialists (AOABOS) or American Dental Association (ADA), then that specialty will be deemed your Regular Occupation.
Here’s the exact medical occupation language in Northwestern Mutual’s disability insurance policy
Northwestern Mutual: Medical occupation disability insurance language
Total Disability: The words “Total Disability” or “Totally Disabled” mean the Insured is unable to perform the substantial and material duties of the Regular Occupation.
If the Insured can perform one or more of the substantial and material duties of the Regular Occupation, the Insured will be considered Totally Disabled if:
- the Insured is not Gainfully Employed in an occupation;
- more than 50% of the Insured’s time in the Regular Occupation at the time Disability began was devoted to providing direct patient care and services; and
- the Insured is unable to perform the substantial and material duties which accounted for more than 50% of the Insured’s charges for direct patient care and services as evidenced by the Billing Codes for the 12 months before the Disability began.
If the Insured can perform one or more of the substantial and material duties of the Regular Occupation and is not considered Totally Disabled, the Insured may qualify as Partially Disabled.
Regular Occupation: The words “Regular Occupation” mean the occupation of the Insured at the time the Insured becomes Disabled. If the Insured is regularly engaged in more than one occupation, all of the occupations of the Insured at the time the Disability starts will be combined together to be the “Regular Occupation.” “Regular Occupation” is not restricted to a specific company or industry.
If the Insured is unemployed, retired, or not Gainfully Employed outside of the home for more than 15 hours a week at the start of Disability, the “Regular Occupation” of the Insured consists of the normal daily activities, including household duties, performed by the Insured at the time the Insured becomes Disabled.
Gainful Employment. The terms “Gainful Employment” and “Gainfully Employed” mean any work in any occupation performed for which a person receives or would be expected to receive compensation, remuneration, profit or benefits.
An any occupation definition of disability is broader and provides more leverage to the insurance company to deny claims. Under this definition, you will typically only receive benefits if you are unable to perform any work for which you have been trained, even if it’s not your medical specialty. Any occupation language in a disability insurance policy will typically look something like this:
“You will be considered totally disabled if you are unable to perform all the substantial and material duties of any occupation for which you are fitted by education, training, and experience.”
Let’s apply this definition to Jim’s scenario as described above.
If Jim had a disability insurance policy with an “any occupation” definition of disability, the insurance company could argue that Jim is still able to work as a doctor in other medical specialties. Based on this, the insurance company could prove that Jim has the ability to still work as a doctor even though he could not perform the material and substantial duties of being a surgeon.
The situations above explain why own occupation is so critical for doctors to have in their disability insurance policy.
Learn More: Physician Disability Insurance
Jack is the Head of Content Marketing at LeverageRx, the personal finance company that simplifies how healthcare professionals shop for financial products and services. A Creighton University graduate and former advertising creative, he has written extensively about topics in personal finance, work-life, employee benefits, and technology. His work has been featured in MSN, Benzinga, TMCNet, StartupNation, Council for Disability Awareness, and more.