Disability Insurance Quotes – How your Occupation Affects Your Quotes
Posted on February 4th, 2012
When you request disability insurance quotes from an agent or broker, you will be asked for your occupation. The reason for this can be found in any policys definition of total disability. In an own-occupation definition of disability, for example, total disability is usually defined as, due to injury or illness, you cannot perform the usual and customary duties of your occupation.
In a disability insurance policy, as in any insurance policy, the insurance company is taking on a risk. O
Tags: Disability Insurance, Disability Insurance Quotes, Insurance Quotes, Quotes
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Own Occupation Disability Insurance- Do you Need it?
Posted on January 14th, 2012
Before I share my thoughts about own occupation disability insurance, I thought I should give you definitions of True Own Occupation and Modified Own Occupation, as they arent always clearly identified.
True Own Occupation: Due to injury or illness, you cannot perform the material and substantial duties of your Occupation. You will be considered totally disabled even if you are gainfully employed in another occupation, provided that, due to injury or illness, you are not able to work in your own occupation.
Modified Own Occupation: Due to injury or illness, you cannot perform the material and substantial duties of your Occupation and you are not gainfully employed.
So, the difference in language is easy to see the main difference between the two is that in the True Own Occupation definition, you can work in another occupation and will still receive your full benefits (as long as you cant work in your occupation), whereas in the Modified Own Occupation definition, you will no longer receive your benefit for total disability if you go to work in another occupation.
I have to add that, if you have a Residual benefit in your policy, you might be eligible to receive a partial benefit if you are disabled per the policy language and you choose to work in another occupation. If you choose to work in another occupation and you have a loss of income of at least 20% (or 15%, depending on the policy), you could receive a percentage of your benefit based on your percentage of income loss.
Which Definition is Right for you?
When looking at both modified and own occupation disability insurance, I ask my clients, if, due to illness or injury, you cant work at your occupation, could you potentially work in another occupation (remember, this would be your choice not the insurance companys)? Many times, the answer comes quickly. A good example would be a surgeon with a hand injury. Clearly (unless robotics are involved), if a surgeon has a hand injury, he wouldnt be able to perform surgery, but might want to work in general practice or teach or do something else entirely. This person would be better suited to a True Own Occupation definition of disability.
However, take an Executive who works mostly at a desk. If she couldnt perform the duties of an Executive, the answer to the above question is most often No. In cases like this, especially if there are budgetary concerns, I would recommend the Modified Own Occupation definition (it is less expensive).
You will hear many arguments in the industry as to which definition serves the policy holder better. I cant argue with someone who tells me that the true own occupation definition is better than the modified definition because I would agree that a richer benefit is better than one that has restrictions on it. However, the question I ask that person is, If a benefit is better (and more expensive) but the person doesnt need it, is still a better benefit?
The bottom line is, benefits in a disability insurance policy should be tailor-made for each client and their particular needs. There are a lot of moving parts and cost factors to consider, so make sure you work with an agent/broker who works with several companies and understands this tailor-made concept. You will probably wind up with the policy and premium that fits your needs.
Tags: Disability Insurance, Insurance, Occupation Disability, Occupation Disability Insurance
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Disability Insurance, Simplified
Posted on May 16th, 2010
Disability is often overlooked by many people, including other Financial Advisors. Some think it is too complex to understand, too difficult to collect on a claim, or too hard to be approved for. There were times when Advisors had to go through a 17 page application form, and then cross their fingers hoping that the client would be approved. Consumers didn’t know what they bought at purchase time, and sometimes had challenges at claim time. Well, that was then.
Today, there are programs that are Guaranteed to Issue. What does that mean? Well, if you are actively working, and not currently hurt or disabled, then you qualify. Disability Insurance is a little different than . I Read more…