Total Disability
"Any Occupation" or "Own Occupation"
- Any occupation - the inability to perform the material duties of any occupation
- Own occupation - the inability to do the material duties of your own occupation
MR. WATSON: You have to be total disability to receive the full benefit. What is the definition of being disabled. You can't simply make up your own. The policy defines it.
MR. WATSON: Let's just say again that you are making $100,000 in salary. And you bought a $3,000 a month benefit. You could have bought how much of a benefit? $5,000. But you only bought a $3,000 benefit. Got it? To get this benefit, you must be totally disabled. You've got to meet the policy's definition of total disability. And it depends upon which definition you bought. There's any occupation and there's own occupation , those are the two definitions. Just for illustrative purposes, guys, any occupation is the inability to perform the material duties of any occupation. If you can do anything, you're not disabled. Does that make sense?
ALL: Yes.
MR. WATSON: So to get that $3,000 a month benefit from the policy you purchased, you have to meet the company's definition of being totally disabled. Each insurance company has its own guidelines for qualification purposes. Let's say you could only qualify for one that was any occupation. That means that to qualify you must be unable to do anything. That's not a good definition to have.
WOMAN: That's pretty hard to qualify for, huh?
MR. WATSON: It would be.
WOMAN: Brain damage?
MAN: Quadriplegia?
MR. WATSON: Basically, yes. But let's go over the policy that would cover your own occupation. It's the inability to do the material duties of your own occupation. Ex., There was a South African doctor, did the first heart transplant. His name was Christian Barnard. Part of his duties was making an incision right here, down the middle of your chest.
MR. WATSON: He developed a form of arthritis. He couldn't make that incision anymore. Well, he could, but the incision ended up over here, behind the patient's back.
MR. WATSON: So instead of being a surgeon this guy became an author, lecturer, consultant. He did all these other things and made more money than as a heart transplant. True story.
MR. WATSON: Under own occupation, was he still getting paid by the disability income policy even though he was able to work doing other things?
ALL: Yes.
MR. WATSON: So even though he's making more money doing these other things, he qualified for disability benefits and received those disability benefits tax-free.
MAN: Even though he's generating income on other stuff?
MR. WATSON: That's right. Pretty cool, isn't it?
MAN: Uh-huh.
MR. WATSON: They don't let everybody have this kind of definition. It's difficult to qualify for. Depends on the job classification. Job classifications will be discussed in another segment but are usually
- AAA, for the least risk occupations (Doctors, CPAs, etc)
- AA, (Sales people)
- A
- B
- C- most hazardous (Off-shore underwater welders)
where Class C occupations probably would not be allowed this definition or maybe would not even qualify for Disability Income because their occupation is extremely hazardous.
Let's use a carpenter as an example. A carpenter uses his right hand. If he lost his right hand, would he be disabled? Under any occupation, would he be disabled?
ALL: No.
MR. WATSON: Under own occupation if you lose your right hand can you still hammer with your right hand?
ALL: No.
MR. WATSON: Own occupation definition would be the best definition.