A key feature of disability insurance is the definition of disability, which determines if benefits are paid. Own-occupation (“Own-Occ”) policies define disability as the inability to work in the particular field or trade you were trained for. For example, bus drivers and flight attendants and doctors all need to use their hands and sight to work. If they have difficulty seeing, or lose the use of an arm, they cannot perform their job duties.
Any-occupation (“Any-Occ”) policies define disability as the inability to engage in any type of employment. It is a much more restrictive definition because you are not considered disabled unless there is no type of work that you can do. Social Security uses an Any-Occ definition of disability to qualify people for benefits.
Naturally, Own-Occ policies are more expensive than Any-Occ because they allow people to collect benefits when they could do a different type of job. Policies are also available with a split definition of disability (i.e., a certain number of years of Own-Occ, followed by a switch to Any-Occ) to keep premiums more affordable.
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