You are a medical Resident or Fellow and you’ve heard regular mention of the term “Specialty Own Occupation”…what in the world does this mean?
Ok disability insurance, Total Disability defined goes a little like this…
“If you are unable, due to accident or illness, to perform the material or substantial duties of your occupation, you are deemed to be totally disabled…so long as you are NOT GAINFULLY EMPLOYED. “
You probably noticed the BOLD ending to the definition above. This language is referred to as Modified Own Occupation total disability. If you can’t do what you were doing and you aren’t earning any income doing anything at else, the insurance company will pay the benefits every month. In most professions, including many executive based occupations like accounting or marketing, this definition can work just fine and provide appropriate protection.
However, for you as a resident or fellow who is wrapping up years of school and training and maybe even additional years learning a finite craft, the Modified Own Occupation language simply doesn’t cut it…not for a pediatrician or hospitalist and in no way for a surgeon!
So, most companies offer an “Own Occupation” rider to increase the flexibility of the definition of Total Disability. This rider removes the “gainfully employed” wording completely. This means that if you can’t perform your pre-disability duties and have a 75/80% loss of income due to the illness or accident, you will receive your full monthly benefit EVEN IF YOU ARE EARNING OTHER UNLIMITED AMOUNTS OF INCOME. Voilla, we have just protected your income as a trained physician even if you could now teach or work in any other medical field or occupation whatsoever.
Now, let’s take this one step further…what if we add this line to the policy definition for Total Disability?
“if you have limited your duties to a medical specialty we will deem that specialty to be YOUR OWN OCCUPATION.”
Now, you have included a “SPECIALTY DEFINITION” Rider to your discounted Disability Insurance policy from Renaissance Financial.