Winter 2008
To Own Occ or Not To Own Occ
by Diane Yohn, CLU, RHU, FLMI, CLF
When people purchase a product, they may not fully understand or use all of the features and benefits of that product. I know I do not use all of the features of my cell phone or iPod. Consumers rely on their advisors to help them through the features and benefits of insurance contracts, including disability insurance.
For me, one of the most misunderstood disability income insurance riders is the Own Occupation Rider.
For the average executive, business owner or management person, the Own Occ Rider is not generally the first rider I would recommend. I have seen statistics that 95% of all disabled people return to work in their previous occupation or do not return to work at all.
Regular Occupation
The Protector+
Your occupation at the time Disability begins. If you have limited Your practice to a professionally recognized specialty in medicine or law, the specialty will be deemed to be Your Regular Occupation. If You are retired at the time Disability begins, being retired will be deemed to be Your Regular Occupation.
What does the Own Occ Rider do?
This rider allows insureds to work in other occupations while receiving full benefits from their IDI policies. Covered individuals would receive payments from two places: income from their new job as well as the from their IDI policies.
Where is Own Occ appropriate?
For an insured who is highly educated and compensated — and in a specialized line of work — the Own Occ Rider might be both desirable and appropriate. For example, a neurosurgeon would be considered totally disabled if she developed a tremor in her hands, and could no longer perform neurosurgery. She might be able to re-train as a family practice MD or decide to teach.
Under the Own Occ Rider, she could collect income from her new occupation as a family practice physician in addition to the disability income benefits payable with the Own Occ Rider. In specialty occupations, Own Occ may also be helpful from a competitive standpoint to make policies less subject to replacement.
Total Disability/Totally Disabled
The Protector+
Because of Your Injury or Sickness:
- You are unable to perform the substantial and material duties of Your Regular Occupation; and
- You are not engaged in any other gainful occupation; and
- This requirement is removed with Own Occ.
- You are under the regular care of a Physician appropriate for Your Injury or Sickness. This Physician’s care requirement will be waived when We receive written proof, satisfactory to Us, that further care would be of no benefit to You.
If you are not sure
If your customers are not sure if the Own Occ Rider is a good idea for them, ask, “If you could not perform the functions of your regular occupation what else could you do?”
If your customers do not have the Own Occ Rider when they become totally disabled so long as they choose not to work in another field they could collect full benefits while they remained disabled.
If your customers would like the option of working in another field while receiving disability benefits, then the Own Occ Rider would fit the bill.
Diane Yohn, has over 25 years’ industry experience. A past president of the Minnesota Chapter of GAMA, she is passionate about selling disability insurance and developing new agents entering the DI marketplace. She lives and works in Minnesota and is known at The Standard not only as an outstanding human being and professional, but also for her sense of humor and repertoire of Ole and Lena jokes. (It’s a Minnesota thing.)
Ms.Yohn kindly agreed to share her perspective based on her experience in the disability insurance industry. She is not an employee of The Standard and the views expressed do not necessarily represent the views of The Standard.