Disability insurance policies generally provide coverage when a person has been injured or become sick to the extent that they are unable to work their “own occupation” or “any occupation.” Some disability policies contain features of both coverages, providing coverage for disability from one’s “own occupation” for a certain period (usually two years), and then providing coverage only if the person is disabled from work in “any occupation.”
Understanding the differences between how disability coverage works when it is based on an “own occupation” standard versus an “any occupation” standard—and making the necessary showing under the applicable standard—can be critical to whether your disability claim is paid.
An “own occupation” disability policy provides benefits if an insured is disabled from engaging in their “own occupation.” If the person’s occupation is a physician, then the person is disabled if his or her medical condition prevents working as a physician. An “own occupation” policy is also “referred to as ‘occupational coverage,’” because it insures a person against being unable to work in his or her chosen occupation (Ellena v. Standard Ins. Co., 2013 WL 6492318 *5 [N.D.Cal. 2013]).
In contrast, an “any occupation” policy will only provide benefits if the medical condition involved prevents the claimant from working in any occupation. In the example of a physician, in order to receive benefits under an “any occupation” policy, the physician would have to be disabled from any work in any field, even as a medical assistant.
Thus, California courts have explained that “there is a distinction between ‘own occupation’ coverage, which indemnifies against disability that renders an insured unable to perform his or her own occupation, and ‘any occupation’ coverage, which indemnifies against disability that renders the insured unable to perform any occupation” (Id. at *5).
Case law has explained that it is generally “easier to obtain claim” payment under an “own occupation” policy than under a policy that uses an “any occupation” standard (Dozier v. Sun Life Assur. Co. of Canada, 466 F. 3d 532, 535 [6th Cir. 2006]). Similarly, other courts have described “the more lenient own occupation standard” standard for obtaining disability policy benefits, as compared to the any occupation standard. Indeed, it is well-accepted that “own occupation” coverage is “broader and generally more expensive” than “any occupation” coverage (Ellena, supra, 2013 WL 6492318 at *5).
A person making a claim under a disability policy should determine whether he or she is insured under an “own occupation” or “any occupation” disability policy. Once the applicable standard is determined, the claim should be presented in a manner—and with factual support—to meet the appropriate standard.
It does no good to show that one is disabled from his or her own occupation if the policy only covers disability from “any occupation.” Moreover, it is important to determine whether the policy imposes different standards based on the timing of the claim, as many policies change from an “own occupation” standard to an “any occupation” standard after two years of covered disability.
Insureds who are making a disability claim and who have any questions about the applicable standard that applies—or what is necessary to meet that standard—should seek legal advice from an attorney experienced in disability claims to assist them.
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