The 4 Most Common Definitions of Own Occupation:
True Own Occupation:
The True Own Occupation definition states: You are considered totally disabled if, due to sickness or injury, you are unable to perform the material and substantial duties of your regular occupation/specialty. For example, if you were totally disabled in your regular occupation/specialty you would receive your total disability monthly benefit even if you established a new job and earned even more than your previous occupation/specialty. This definition is typically only found in Individual Disability Income Policies and considered by many to be the best own occupation definition.
Transitional Own Occupation:
This is similar to the true own occupation definition above with one major exception. If you choose to establish a new occupation, your new occupation income, plus any additional disability benefits (Social Security, Workman’s Compensation, ETC.) received cannot exceed 100% of your pre-disability earnings from your original occupation/specialty. If the sum of your benefits and new occupation exceed your original income then your benefits from the transitional policy will be reduced. This definition is typically only found in Individual Disability Income Policies. * Please be aware that this definition can very between companies.*
Basic Own Occupation:
This definition state that you are considered to be totally disabled if solely due to sickness or injury, you cannot perform the material and substantial duties of your regular occupation and you are not working in any gainful occupation. In other words, you cannot be forced to work in a new occupation, however, if after the disability you choose to work in another occupation, then the carrier will consider you to be partially or residually disabled and will pay benefits based on your percentage loss of earned income (if the policy has a residual disability clause). This clause can be found in all types of Disability Income Policies including: Individual Disability Income Policies, Association Group Disability Policies and Employer Sponsored Group LTD Long Term Disability Policies.
This definitions defines total disability as your inability to perform the duties of your occupation/specialty (normally for only 2 or 5 years); and you must be unable to perform the duties of any occupation for which you may be suited by training, education or experience. The carrier may force you to return to a new occupation or else stop paying your benefits. This clause is typically found in Association Group Disability Policies and Employer Sponsored Group LTD Long Term Disability Policies.