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Understanding ‘Own-Occupation’ Disability Insurance

By Thomas Lloyd

The most important first step any physician must take when beginning the process of selecting an individual disability insurance policy is educating themselves about the various inherent differences between each contract.

A clear relationship exists between the price of each contract and its definition. Disability insurance is a product which clearly follows the mantra ‘you get what you pay for.’ These show a ranking of the best levels of coverage for physicians.

·      1. ‘True Own-Occupation’ with medical specialty protection language.

o   Such a definition means that, because of a sickness or injury, you are not able to perform the material and substantial duties of your medical specialty (your occupation is the one in which you are engaged in at the time you suffer an injury or sickness). When you are disabled and receiving a benefit, you are still allowed to work and earn an income in another medical specialty as long as it’s not your original specialty.

o   This is very important because it allows physicians the choice of going back to work in the medical field and earning an income without jeopardizing the loss of their benefit from the insurance company.

·      2. ‘True Own-Occupation’ without medical specialty protection language

o   The second choice available is a ‘true own occupation’ definition without medical specialty protection language. This contract shares the same language listed above without the medical specialty designation. This definition would pay a benefit if a sickness or injury prevented the proposed insured from working in their own-occupation as a physician. It would continue to pay the benefit if that individual chose to work in another profession outside of medical field (i.e. consulting, teaching, etc) and the claim amount would not be reduced. However, it would not allow the choice of working as a physician in another specialty.

·               3. ‘Modified Own-Occupation.’

o              Such contracts would pay a benefit if the disabled person could not perform their specific occupational duties (as a physician) but would not continue to pay if that individual chose to be gainfully employed in another field. In other words, a benefit would only be paid if that person never went back to work again – in any profession.

            Most physicians want to ensure protection of their training and education in the medical field by obtaining a policy that has a pure own-occupation definition with medical specialty language but other physicians sometimes may not. Make certain that when comparing different forms of coverage that you comparing ‘apples to apples’ with contracts that share the same definitions and contract structure. Finding the answers to such questions will ensure a proper selection is made for protection that is the single most important block of protection in your financial picture.


Thomas Lloyd is a financial representative specializing in disability insurance with the Guardian Disability Insurance Brokerage in Rockville, MD. The firm services physicians and executives nationwide for all aspects of business and personal disability insurance benefits.


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