Long-term disability insurance provides you with financial assistance when you are unable to work. Like most of us, you likely rely on your ability to earn a living to stay financially afloat, which makes long-term disability insurance so important.
When you become unable to work due to injury or illness, you need long-term disability coverage that covers what you would earn if you were working. If you are a high-income earner, you want your disability coverage to reflect that.
This is where own-occupation disability insurance can help. Your long-term disability insurance (“LTD”) policy may have an own-occupation disability option or any any-occupation option.
Own-occupation disability
Own-occupation disability policies pay you a benefit if you are unable to perform your regular occupation. This can be important if you are a professional working in a specialized occupation, such as a doctor, accountant or business owner.
A long-term injury or illness that prevents you from doing your specialized job can significantly impact your earning capacity, even if you can perform other jobs. For example, if you are a surgeon and permanently injure your hand, you may be able to work at some jobs but never be able to perform surgery again.
Own-occupation disability coverage is typically more comprehensive to account for the substantial drop in earning capacity. However, this means it is usually more expensive.
Any-occupation disability
In contrast, any-occupation disability coverage is often less expensive. Any-occupation coverage provides benefits if you become disabled and are unable to work in any occupation.
The right type of coverage for you depends on your specific situation. If you work in a job that is highly specialized, own-occupation coverage might be better, since there may be other jobs you can work at even if you can no longer work in your chosen field.
To qualify for any-occupation coverage, you would need to show you cannot perform any work at all, which is often challenging.
