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Why "own occupation"?

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  • Why "own occupation"?

    Just to play devil's advocate -- why are people so emphatic that you should get long-term disability insurance that covers you if even if you could do some kind of work different than your current practice?  For a temporary situation (say a year or two of cancer treatment or rehab) I can see wanting to just wait until you can go back to your regular job.  But for something permanent it can really accelerate a downhill slide to cast yourself as unable to work because of disability if you could in fact be doing some kind of work.  Clearly it makes sense to protect against loss of income since most replacement jobs would probably pay less than being a doctor.  But as doctors we are presumably more aware than most of how important it is to keep getting out in the world and on with your life if you're in any way able to do so.  So why do we want to insure ourselves against having to do that?

  • #2




    Just to play devil’s advocate — why are people so emphatic that you should get long-term disability insurance that covers you if even if you could do some kind of work different than your current practice?  For a temporary situation (say a year or two of cancer treatment or rehab) I can see wanting to just wait until you can go back to your regular job.  But for something permanent it can really accelerate a downhill slide to cast yourself as unable to work because of disability if you could in fact be doing some kind of work.  Clearly it makes sense to protect against loss of income since most replacement jobs would probably pay less than being a doctor.  But as doctors we are presumably more aware than most of how important it is to keep getting out in the world and on with your life if you’re in any way able to do so.  So why do we want to insure ourselves against having to do that?
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    Disability insurance is unlikely to cover ones prior income, I know mine doesnt, just basic bills. Own occupation is important since they cant deny you your basic income if you can earn money elsewhere, that to me is pretty much the definition of insurance. Just because you cant operate anymore doesnt mean your bills or student loans magically disappear of course.

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    • #3
      I think maybe you aren't understanding how it works.  If you have crappy definitions then you have to be basically totally disabled from any job whatsoever, which is pretty hard to meet.  If you have own occupation you can for instance get disabled from a more minor injury which prevents you from working as a doctor.  You are unlikely to find a non-doctor job that pays anything close to your current income, thus the need for "own occupation" and/or specialty.  Having own occupation doesn't prevent you from actually getting a job in another field after being disabled..

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      • #4
        "Own-Occupation" is the most liberal definition of Total Disability and, therefore, protections your ability (or inability) to perform the duties associated with your medical specialty. In the event that an accident or illness takes that away, you can use your education, training and experience to earn as much income as possible in another occupation or medical specialty. Additionally, in the event that you are disabled and can never practice in your medical specialty again, benefits are paid and continued income documentation is no longer required (if your policy is a "Loss of Earnings" policy, you must document your earnings on an ongoing basis in order for the insurance company to determine the percentage of income that you lost in order to determine how much to pay you). This will get old very fast.)

        However, as good as "Own-Occupation" is, there is a grey area. What if you can still perform your duties but for less hours per day, less days per week or the number of procedures that you can perform is reduced and this causes a loss of income? Under "Own-Occupation" alone you would receive nothing as you are performing the duties associated with your specialty. For that reason, you also need an income loss component in your policy known as the Residual Disability or Partial Disability Rider.

        A policy with an "Own-Occupation" definition of total disability is not substantially more expensive (in some cases less) compared to "Loss of Earning" policies. You have spent a tremendous amount of money and time learning your craft and, in the event the ability to continue practicing is taken away from you, you should be paid. The fact that you are smart, motivated or resourceful enough to do something else and be good at it and rewarded financially as a result of your efforts, should not even be taking into consideration. Otherwise, you must strive for mediocrity in order to continue to receive some or all of your disability insurance benefits!

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        • #5
          My husband and I were very careful to pick own occupation because it had been drilled into our heads, but I'm wondering if it really gives any benefit in his case--he's a radiology resident. There have to be very few injuries that would disallow him from practicing radiology, but allow him to do something else.

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          • #6
            While that may be true, think about it. Floaters in his eyes or the ability to differentiate among shades of grey could be career ending for him but still allow him to do any number of other jobs using his education training and experience.

            As I mentioned before, the cost for "Own-Occupation" coverage is not necessarily more expensive (and in some cases can be less expensive) compared to those with other, less liberal definitions.

            Unless there was a significant cost savings associated with a more restrictive policy, why would you knowingly want to settle for anything less?

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            • #7




              While that may be true, think about it. Floaters in his eyes or the ability to differentiate among shades of grey could be career ending for him but still allow him to do any number of other jobs using his education training and experience.

              As I mentioned before, the cost for “Own-Occupation” coverage is not necessarily more expensive (and in some cases can be less expensive) compared to those with other, less liberal definitions.

              Unless there was a significant cost savings associated with a more restrictive policy, why would you knowingly want to settle for anything less?
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              Good point.  I heard somewhere that there are something like 50 shades of gray.

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              • #8




                Just to play devil’s advocate — why are people so emphatic that you should get long-term disability insurance that covers you if even if you could do some kind of work different than your current practice?  For a temporary situation (say a year or two of cancer treatment or rehab) I can see wanting to just wait until you can go back to your regular job.  But for something permanent it can really accelerate a downhill slide to cast yourself as unable to work because of disability if you could in fact be doing some kind of work.  Clearly it makes sense to protect against loss of income since most replacement jobs would probably pay less than being a doctor.  But as doctors we are presumably more aware than most of how important it is to keep getting out in the world and on with your life if you’re in any way able to do so.  So why do we want to insure ourselves against having to do that?
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                For me its more about protecting myself from having to do further training to be competent in whatever other job I would be capable of doing.

                Imagine if you are disabled from your surgical subspecialty, but were deemed "fit" for duty as a radiologist or some other "low-impact" field (thus denied benefits from your insurance company since they view you as not really disabled). While you may physically be capable of performing the new job it would likely require you to go back and do further residency training in your new field, something I am just not willing to do.

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                • #9





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                  For me its more about protecting myself from having to do further training to be competent in whatever other job I would be capable of doing.


                   
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                  Keep in mind that this is typically NOT the case with individual policies. However, group LTD policies may include language such as "After 24 months of payments, you are disabled when UNUM determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience".

                  Even an individual "Loss of Earnings" or "Modified Own-Occupation" policy will not make you work and will include language such as "You are totally disabled when you are unable to perform the principal duties of your regular occupation and not gainfully employed in any occupation. Here, if you cannot perform the duties associated with your occupation or medical specialty, you can decide if you want to be gainfully employed (and work doing something else) or not. It is your choice.


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                  • #10
                    A friend of mine, not an MD, who works in an office, was shopping for disability insurance.  The "own occupation" rider cost about 20% more in premiums, if I remember correctly.  I advised against it, since I could not imagine a disability that would make it impossible for him to do his current job, yet still allow him to do another job.  However, as a surgeon, I don't want to be told that I can work in urgent care or some other field.   I think that demonstrating that I'm disabled as a surgeon will be a lot easier than showing that I'm disabled for any work, or for "substantially similar" work, so I would advise "own specialty" for physicians.  Keep in mind that the amount you pay for "own specialty" is tied to the nature of your specialty, so you won't be paying too much extra for that rider if your specialty isn't procedural.

                    A friend is collecting on his policy right now. He was diagnosed with a neurological condition which intermittently makes doing his procedures impossible, although the condition is otherwise not currently a problem.  He submitted evidence of the diagnosis, and got his first check within a month.  Had he not had the "own specialty" rider, he wouldn't have been able to collect, and would have had to retrain into another specialty.

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                    • #11
                      Agree, its kind of a no brainer.

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                      • #12
                        MSooner -  I'm glad you posted this because I'm also doubtful that "own occupation" is as important for a radiologist as it may be for other specialties.

                        Perhaps a no-brainer for a surgeon, but I haven't seen a single convincing argument that it makes sense for a radiologist.

                        Is the floaters scenario or the impaired shades of grey perception a realistic scenario?  Doesn't seem so to me.  Any ophthalmologists here interested in chiming in?  Realistic enough to warrant a 20% increase in premium?

                        It'd also be great to hear the perspective of a lawyer well-versed in disability insurance claims.

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                        • #13
                          I think it's reasonable  to assume that if you're in a specialty with a lower likelihood of disabiltiy you will pay a lower premium for the "own occupation" rider.  In other words, you probably are being charged a fair amount based on the risk of disability for the practice of your specialty. That's why there are 4 or 5 different categories of jobs.

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                          • #14
                            Question:  would a policy with the same benefit generally cost less for someone who is in a specialty where it is "harder" to become disabled enough to not be able to perform it?  e.g. it will take a lot more for me to be unable to perform my work as a psychiatrist than say for a surgeon who is basically out if he or she looses a finger.

                            I am currently considering looking at some own occupation options and my biggest fear is that it will likely be rather difficult for me to demonstrate disability for something that is a non-catastrophic event, because of nature of my work...

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                            • #15
                              It will vary but, generally, policies for non-invasive practitioners will be less expensive compared to those physicians that perform procedures.

                              That being said, claims experience for psychiatrists in not great. As a result, certain carriers like MetLife and Principal will put your specialty in the same occupation class as some surgeons (so you pay a higher premium).

                              Ameritas, on the other hand puts a psychiatrist in their top occupation class and also may include a "preferred occupation" and association discount making their premium rates very favorable. However, their policy has a 24 month limitation for claims related to mental/nervous and/or substance abuse disorders which some psychiatrists may find unacceptable.

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