The Own Occupation definition of physician disability insurance is both the strongest and most desirable coverage in the disability insurance industry. Unfortunately, so many variations of this type of coverage have been created and tossed around the proverbial insurance playground that it can be difficult to say what “type” of Own Occupation you are really paying for.
These variations allow every carrier in the market to tell you that it has an Own Occupation definition. However, when you look at the others’ provision of Own Occupation, you can boil down the quality of their coverage to two key points:
I. As a physician, does your interpretation of the coverage actually align with the language used in your contract?
II. Would that particular own occupation definition of disability perform for the entire duration that your illness/injury impacts your specific medical profession?
For today, we will only be covering the first point. We will visit the second point in a later post.
The Own Occupation provision is the single most important feature of your entire insurance contract.
Behind Enemy Lines…
Lets examine the “variations” in which Own Occupation Disability Insurance can be interpreted. The strength of your Own Occupation disability policy is determined by answering these questions:
1- In your policy, is your occupation defined using categories determined by the Department of Labor? If so, you should be aware that this is the broadest definition. These definitions represent occupation titles as general as “surgeon.” There are only about 30 occupational categories in this list. Most carriers use this definition, and it is considered a much weaker version of disability insurance for physicians.
2- In your policy, is your occupation defined using categories determined by the American Board of Examiners? If so, this represents a strong & specific definition of Own Occupation. For example, rather than the category, “surgeon,” we see job descriptions including: Abdominal Surgeon, General Hand Surgeon, Orthopedic Hand Surgeon, Head Surgeon, Neurological Surgeon, and many others. This list contains about 181 much more specific categories.
3- In your policy, is your occupation defined using Current Procedural Terminology (CPT) Codes? This represents the most exact definition of your occupation. This takes into account all CPT codes you submit for services rendered and defines your occupation by those terms.
Why are these distinctions so important? Because clarifying this definition will determine your ability to perform your “Occupation” as defined in your policy. Remember, this all boils down to the expectation that if you are unable to do your job because of and illness/injury, you will receive DI benefits. Make sure your Occupation has a strong definition. If your contract language said, “We might provide benefits if you become injured and are unable to do your job,” I’m sure you would start shopping around immediately.
The Belly of the Beast
Did you know that when carriers ask you what you do during the application process, the purpose is merely to determine how much they are going to charge you for your particular product and not necessarily how they are going to process your claim? Virtually all policies bought in the market will have the same phrasing in regards to claim payments: “…based on your inability to perform the job duties that you were doing at the time of claim.” What does this mean? Well, regardless of what your agent has told you, it depends entirely on the interpretation of the three words: “your job duties.” Following the same Occupation definition language stated in the three questions above, here’s what may happen depending upon each interpretation:
1- Department of Labor: If you can’t perform your duties then benefits will be paid if you can’t be an MD any longer. A worst-case scenario: You can no longer perform surgeries as an Ophthalmologist because of an ankle injury that prohibits you from using the feet controls required. However, you are still considered capable of performing other surgeries outside of your specialty. Result: no disability benefit.
2- American Board of Examiners: If you can’t perform your duties then benefits will be paid if you can’t be an MD in your subspecialty any longer. Same ankle injury prevents you from ever performing surgeries specific to Opthalmologists. Result: Receive Disability Benefits.
3- CPT Codes: If you can’t perform your duties then benefits will be paid if you can’t be an MD based on your CPT Codes. Result: Receive Disability Benefits.
There have been more instances than I’d like to count where I perform a Disability Insurance policy review, only to inform a client that they are not getting the coverage they think they’re paying for (or worse, after an illness has already taken place). Do not let these issues happen to you, find out now what coverage you have BEFORE a claim.
ASK THIS QUESTION and GET IT IN WRITING FROM THE CARRIER (not your agent)!
The question to ask is, “If I became disabled and cannot perform my medical subspecialty, but can work in the broader medical field from which I specialized, will I still get paid the FULL BENEFIT I PURCHASED?”
This provision is the single most important feature of your entire contract. Don’t leave it up to chance since most reps don’t really understand the details and finite functionality at claim time. Let us help you with the answer! As your agent, we believe it is our responsibility to not only make sure that you now exactly what you’re paying for, but to provide guidance through the claims process when needed. Contact us any time for a free disability policy review and consultation.