An insured has a disability income policy with an 'Own Occupation' definition of total disability for the first two years, and then 'Any Occupation' thereafter. The insured, a skilled surgeon, loses the use of their dominant hand in an accident one year into the policy. Which of the following statements is true regarding their disability claim?
- AThe insured can qualify for total disability benefits because they cannot perform the duties of a surgeon.
- BThe insured must wait until the 'Any Occupation' period begins to file a claim.
- CThe policy will only pay partial disability benefits, as the insured is still alive.
- DThe insured will not be considered totally disabled because they can still perform some other type of work.
Show answer & explanationAnswer & explanation
Correct answer: A. The insured can qualify for total disability benefits because they cannot perform the duties of a surgeon.
Under an 'Own Occupation' definition, an insured is considered totally disabled if they cannot perform the material duties of their specific job. As a surgeon who lost the use of their dominant hand, they cannot perform their 'own occupation' and would qualify for benefits during the initial two-year period.
Why the other options are wrong
- B. The insured can file a claim immediately, and the definition of disability will be based on the current policy terms.
- C. Total disability benefits would be paid if the definition of total disability is met, not partial.
- D. This statement reflects an 'Any Occupation' definition, which applies later in the policy.
Own Occupation vs. Any Occupation Disability
Two definitions of total disability in disability income policies: 'Own Occupation' means unable to perform one's specific job, and 'Any Occupation' means unable to perform any job for which one is reasonably suited by education, training, or experience.
- Own Occupation is more generous to the insured.
- Any Occupation is more restrictive for the insured.
- Policies often combine them, starting with Own Occupation.
Memory trick: Your 'OWN' job matters most at first, then 'ANY' job becomes the test.