Disability Insurance: "Own Occupation" vs. "Any Occupation"

Disability polices provide coverage only if the disability actually prevents you from doing your "occupation." So how the policy defines "occupation" is important. There are usually two types: "any occupation" and "own occupation." The former provide benefits if your disability prevents you from doing "any occupation" you are qualified to do by education, training or experience. For instance, a trial attorney that can no longer handle the stress of being in the courtroom may be disabled from being a trial attorney, but she isn't disabled from doing non-trial work, so she wouldn't get "any occupation" benefits.

The second type of policies, on the other hand, provide a benefit if your disability prevents you from doing your "own occupation." Thus, the trial attorney whose disability prevents her from doing trial work would be covered because she could no longer do her "own occupation." As you've probably figured out, "own occupation" coverage is better, and more expensive than "any occupation" coverage.

Some policies include step-down occupation definitions. The first two years of coverage will be for "own occupation" and then the coverage changes to "any occupation" to age 65.

Most policies define the insured's occupation to be what she is doing at the time she becomes disabled. This sometimes becomes an issue when the insured's disability isn't acute but slowly progresses over time, causing the insured to gradually modify her occupation so that it has changed by the time she files a claim. To cope with her disability, our trial attorney might slowly change her practice to doing mostly appellate work so that, by the time she files her claim, her "own occupation" arguably is no longer that of a trial attorney but of an appellate lawyer, which her disability doesn't prevent her from doing, opening the door for the insurer to argue that she's not disabled under her "own occupation" policy. It might have been better for her to have filed her claim when she was mostly doing trial work so that it was clear that was her "own occupation" when she became disabled (and then she might have been able to collect those benefits and still earn a living doing appellate work).

As you might imagine, there is a lot of litigation over what these occupation definitions mean and how to apply them.

Brenden J. Griffin is a shareholder at Gabroy, Rollman & Bossé, P.C., and has been litigating disability, life, health and ERISA insurance claims for over 10 years. He can be reached at 520-829-9645.