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Own-Occupation Policy

Wednesday, April 11, 2018


A disability insurance policy is crucial to helping anyone protect their ability to earn an income. A true Own-Occupation policy can help professionals protect the significant investment they made in their education and training. It can provide a benefit when you are unable, due to injury or sickness, to perform the material and substantial duties of your own occupation.

If you have limited your occupation to the performance of the material and substantial duties of a single medical specialty or to a single dental specialty, that specialty would be considered your regular occupation. This is extremely important, because this enables you to continue to practice medicine if you want. You would need to simply modify the field that you practice. For example, a surgeon may consider working as a pediatrician, if disabled as a surgeon, and still be able to receive his or her disability benefits.

More than any other occupations, physicians and dentists need a true own-occupation disability insurance policy with a specialty specific definition. The following is the best definition of disability and is the most favorable to the policy owner and is generally only available within select individual plans and rarely found within employer group plans.

Total Disability or Totally Disabled mean that, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation. You will be Totally Disabled even if you are gainfully employed in another occupation so long as, solely due to injury or Sickness, you are not able to work in your occupation.

What separates this definition from many own occupation definitions found in group plans is the ability to continue receiving benefits if the insured wants to earn an income in another profession. There is no limit as well on the additional income earned in that new profession to offset benefits as long as the insured does not work in their initial occupation.

A basic example of how this definition would work is illustrated in this hypothetical example. A 35-year-old OBGYN permanently injures his operating hand and can no longer perform his duties as an OBGYN because of the injury suffered. He begins to receive benefits as a totally disabled individual under his policy of $10,000 a month. While he receives benefits - he decides to go to law school and change his profession to be a lawyer.

He starts working as a lawyer and earns a salary of $200,000 annually. Since his/her policy has a true own occupation definition of disability, he will still be eligible to receive his annual disability benefits of $120,000 in addition to his new salary of $200,000 for as long as he remains totally disabled and unable to return to work as an OBGYN or until the end of the contract benefit period, whichever occurs first.

Provider Choice’s enhanced own occupation definition is based on your source of earnings and provides more ways to qualify for benefits. Guardian will consider you totally disabled if more than 50% of your income is from:

• Hands-on patient care and, solely because of injury or illness, you can no longer perform hands-on patient care; or
• Performing surgical procedures and, solely because of injury or illness, you can no longer perform surgical procedures.

That’s not all. If you don’t qualify for benefits under the source-of-earnings formula above, then Guardian look at your key duties, including those you were performing in your medical specialty at the time your disability began, to assess whether or not you qualify. Because they evaluate your situation from multiple perspectives, they give you more ways to qualify for total disability benefits. This is some of the strongest, most flexible protection a physician can get.

See how three different physicians qualify for total disability benefits:

The first two qualify using the enhanced formula, and the third under a traditional assessment of how the disability affected his or her ability to perform occupational duties

Own Occupation Policy

Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS), 1901 Research Blvd, Suite 400, Rockville, Maryland 20850. Securities products/services and advisory services are offered through PAS, a registered broker-dealer and investment advisor, (240) 683-9700. James Fegan, Financial Representative. The Guardian Life Insurance Company of America (Guardian), New York, NY. PAS is an indirect, wholly owned subsidiary of Guardian.
Financial Balance Group is not an affiliate or subsidiary of PAS or Guardian.
PAS is a member FINRA, SIPC.


11-Apr-2018 07:21 PM

Consider premium refund or return of premium policies where available, if the premium could be deductible and a disability don’t occur the insured final cost could be substantially less......the refund is usual paid directly to the insured and can be tax free. However any benefits could be taxable.

11-Apr-2018 11:29 PM

This is a great post with good technical details of the "Enhanced True Own Occupaiton" plan offered by Guardian. It is certainly a great fit for certain medical specialties. Here is a post I wrote recently on a partner site with more info into this subject matter!

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