For those of you out there offering supplemental disability coverage, watch your carrier’s language, one adviser cautions. Not that the carrier would say anything profane, of course, but the “own occupation” definition could be just as cringe-worthy as a loaded four-letter word, if you aren’t careful.

"A few words in your policy can make the difference between getting benefits or nothing at all," says Jim Edholm, president of Business Benefits Insurance in Andover, Mass.

If a top-end policy includes the "own-occupation" definition, a policyholder is deemed disabled if he can’t perform the job he was performing when the disability began, Edholm writes in Massachusetts Lawyers Weekly.

But definitions of own-occupation vary from carrier to carrier.  One insurer defines disability as "an injury or sickness the insured employee is unable to perform each of the main duties of his or her own occupation,” and has "…suffered a loss of income of at least 20%."

Since "each" means "each one," under this definition, an employee isn’t disabled unless he or she can’t do any of the main duties of the job, Edholm writes.

However, according to Edholm, some carriers offer a definition that inserts the word "one" in place of the word "each" or "most."

"By choosing a policy with the 'one main duty' definition, there’s no wiggle room.  If you can’t do one main duty, you’re disabled.  Period," Edholm says. 

He notes that plans with that definition typically cost about 10% more, but may well be worth the price for an attorney, doctor, dentist, architect or other highly paid professional, Edholm says.

There you have it, pros. Do you know how disability is defined by your carrier? I hadn’t even heard of the "own occupation" definition until now. Had you? Share your thoughts in the comments.

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