….is super vital. The devil is in the details of definitions. Protecting your income will require you to sharply assess the policy. You have to understand your policy. Remember that you are protecting your number one asset. Your Money. Your Cash Flow. This all based upon your ability.
The insurance company will define your occupation. Your occupation is one of the most critical factors in determining the type of coverage. It is a policy differentiator. There are 4 different definitions of own occupation that you need to pay attention to. There are listed from strongest to weakest.
- Own Occupation or Regular Occupation (Know as True Own Occupation): The inability to perform the substantial and material duties of your occupation. This definition would allow the client to work in another occupation and still collect all of his or her benefit, regardless of how much they might earn in a new occupation, if disabled from their previous or original occupation. So a doctor could collect a his $20,000 dollars of monthly benefit and make $500,000 dollars as an insurance broker. This is the best definition to have on your policy.
- Transitional Own Occupation: This differs from our the first definition because the client can choose to work in another occupation. By doing so, the insurance company will compare the new income of the new occupation to their previous pre-disabilty benefit. If your new earnings are less than your pre-disability earnings, the client will receive the full disability benefit. Now, if the new earnings are more than your pre-disability benefits, the client will take a reduce amount of the pre-disability benefit.
- Own Occupation and Not Working (or engaged): This means, the inability to perform the substantial and material duties of your own occupation and not working. The and not working is the detail that differentiates this from our first definition. The key here is that clients are protected in their occupation– and the carrier cannot force them into another occupation.
- Any Occupation: This definition comes with language that relates the definition of disability to the client’s level of training and experience, but please do not be fooled. Based upon some occupations and health conditions of the clients, this is the best offer.