You want the best disability insurance for your clients, so that means selling them own-occupation disability insurance – right? Not necessarily. Although own-occupation is certainly the best option for SOME workers, it may not be right for everyone. Learn more about own-occupation vs. any-occupation disability insurance so you can identify the best disability insurance option for each of your clients.
Any-Occupation Disability Insurance
Any-occupation disability insurance provides benefits if the policyholder experiences a qualifying disability that prevents them from working in any job. If the policyholder can no longer carry out the duties of their own job, but they could work in a different industry or in a different position in their regular industry, they may not qualify for benefits. Instead, they’ll be expected to switch jobs to continue earning a living.
Own-Occupation Disability Insurance
Own-occupation disability insurance provides benefits if the policyholder experiences a qualifying disability that prevents them from working in their regular job. If the policyholder can no longer carry out the duties of their own job, they can qualify for benefits – even if they could work in a different industry or in a different position in their regular industry.
Own-Occupation Coverage Can Save the Day
The difference between own-occupation and any-occupation disability insurance may seem minor, but it can be huge in certain situations.
For example, let’s say Paul is a surgeon who loses fine motor skills in his primary hand due to a health condition. He can no longer operate, but he could work as a primary care physician. That might not sound so bad – until you realize that there’s a massive pay difference. According to Doximity, general surgeons earn $451,151 on average. Some surgeons earn much more. Neurosurgeons, for example, earn $773,201 on average. Doctors who specialize in family medicine only earn $273,865 on average. That’s a very respectable salary, but it’s also a huge drop, and it could require some major lifestyle adjustments.
An own-occupation policy can help surgeons like Paul avoid having to take a major pay cut. With a true own-occupation policy, the policyholder can receive benefits even if they decide to work in another position that doesn’t pay as well. This is an ideal option for individuals who may want to keep working because they love their work, but who don’t want to take a pay cut.
But Own-Occupation Coverage Is Oversold
Right now, own-occupation coverage probably sounds pretty great … if you’re a surgeon.
Own-occupation coverage is more expensive than any-occupation coverage, and for workers in many professions, it simply isn’t necessary.
Imagine the following scenario. You’re pitching disability insurance to Beth, who works as a computer programmer. You convince her that own-occupation disability insurance is the way to go. Then she sees the premium, and it’s more than she expected. Due to the cost, she decides not to buy disability insurance at all – she can’t afford own-occupation coverage, and she doesn’t want to spend money on a lesser policy. Two years later, she experiences a disability that makes her unable to work in any job, but she doesn’t have coverage. You lost a sale, and she’s experiencing financial hardship.
Own-occupation insurance is great for some workers, but it’s also oversold.
Who Needs Own-Occupation Coverage?
When you read about own-occupation insurance, you’ll often see surgeons used as an example. This isn’t a coincidence. Surgeons are prime candidates for own-occupation coverage because they are top earners with jobs that require unique physical capabilities.
Dentists are also great candidates. Dentists need to be able to perform sensitive dental work, and a disability could make this impossible. Really, anyone whose job requires unique physical capabilities should consider own-occupation disability insurance.
That leaves a lot of workers who DON’T need own-occupation coverage. Any-occupation insurance may be a good option for anyone whose unique job requirements are driven only by mental ability, such as accountants and computer programmers. It’s also a good option for middle-income clients who are looking for a more affordable policy.
Are You Guilty of the Own-Occ Oversell?
If you’ve been pushing own-occupation disability insurance to all your clients, it’s time to reconsider. Remember, some coverage is better than no coverage. If you’re only offering the most expensive options, you may be scaring away clients who need something more affordable. A similar mistake occurs when insurance agents oversell non-cancelable and guaranteed renewable policies.
Want more information on how to close more disability insurance quotes by avoiding the own-occ oversell? Get the handout.