What's at Stake?

We all know what a disability is. But, critical to your insurance protection is the definition of the term “disability” in the disability income policy you buy. You may be disabled, but not in a way which affects your ability to pursue the material and substantial duties of your occupation. If you are able to pursue these duties, then you are not entitled to benefits under your policy.

That’s the key question when you make a claim under a DI income policy. Your actual disability must meet the definition of “disability” in your policy.

You determine the answer to this key question by reading your DI policy carefully. What your policy language says is “the law” of your case. If you have any doubts of the meaning of the language, go it with your insurance adviser or consult a knowledgeable, experienced DI lawyer.

But, first and foremost, the time to pay close attention to the definition of “disability” is before you buy your DI policy. You should want to know to know what you are buying before you purchase your policy. It is too late to find out when you have a claim.

The premium basic DI coverage is generally called “own occupation”. The other basic coverage pays benefits when there is an inability to perform any kind of occupation. “Own occupation” starts to pay benefits when the policyholder is disabled to such an extent that the claimant is unable to perform the particular occupation specified in the policy. Such a policy will pay those benefits while the insured cannot do his usual occupation up until termination date as set forth in the policy.

The inability to perform any kind of occupation means that even if you are unable to do the work you normally do, your benefits may be materially affected or even unavailable, if you have the ability to do any kind of work.

The importance of “own occupation” is magnified the higher one goes up on the income scale. For example, if you are a heart surgeon earning several hundred thousand dollars a year that your family was used to living on, you would want to protect that living standard in the event of disability which prevented you from practicing heart surgery. This would be so even if you were able to practice medicine with your disability because you would likely earn much less per year.