When considering the various options surrounding Disability Insurance, make sure one of the items on your checklist is how the policy actually defines a disability.

Most disability insurance policies have an “own occupation” or “any occupation” definition that spells out when you can collect disability income, and how much.

Own Occupation

With the ‘own occupation’ definition, you must be incapable of performing the material and substantial duties of the occupation you had prior to suffering the disability. Since this type of coverage is more favorable to the insured (you), it tends to be more expensive.


Because your disability insurance will kick-in as long as you’re unable to perform the duties of your job, regardless of whether you could perform the duties of a different job.

Any Occupation

Policies that define a disability as being incapable of performing the duties of ‘any occupation’ are less expensive, but keep in mind, it means that your disability must prohibit you from performing the duties of any job, not just the job you held before your injury or illness.

Income Lost

Some disability insurers are offering a type of coverage that doesn’t define disability in terms of an occupation, but rather in terms of income lost.

Say you are hurt and have to take a job that pays 50% less than the one you had before the injury.

A disability policy based on income would replace some, but not all, of the income lost because of the job change. A common threshold is the policy will start paying after you’ve lost 20% of your income.

Most disability insurance comes with some built-in protection for the policyholders in that the insurers offering the coverage guarantee your policy will be renewed. “Guaranteed renewable” policies mean that if you pay your premium, your insurer can’t cancel your coverage or change the terms.

Further, the insurer can’t increase your premium unless it does so for everyone who has a risk characteristic (age, job type, etc.) similar to yours.

Note. The best option for disability insurance is a non-cancelable policy, which takes all the elements of a guaranteed renewable policy and adds a very important feature: a guarantee that the premium won’t be increased. At least until you are 65.

Tip. As you can see, there are a lot of options for anyone who wants to buy disability insurance. As such, it’s no easy task making sure you get the benefits and coverage terms that best fit your situation. Discuss this with a specialist in disability insurance who can help you obtain what you need at a price you can afford.

If you’d like to learn more, contact one of our Licensed Advisors . We’re here to help.