If you’ve been on long-term disability insurance benefits for some time now, you may be familiar with the terms ‘own occupation’ and ‘any occupation.’ But what do they really mean?
Most group disability insurance policies have a two-pronged definition of total disability. Initially, to be considered disabled, you need to be unable to perform the duties of your own occupation. But, later, usually after one or two years, you need to be unable to do ‘any occupation’ in order to be considered totally disabled. This transition from own occupation to any occupation is referred to as the change of definition. And it is an extremely common time for benefits to be denied. As it is generally easier to prove you can’t do the essential duties of your own occupation than it is to prove you can’t do the essential duties of any occupation.
In this article, we are going to overview each term so you can fully grasp what they mean and understand what you need to prove in order to keep your benefits.
Looking for more information on long-term disability in Canada? Check out our Ultimate Guide to Long-Term Disability.
Own occupation
Every policy will have its own specific wording on the definition of disability during the own occupation period. However, case law has established some general principles that can be applied.
For instance, you do not need to prove that you are unable to do every single job duty in order to meet the definition of disability in this period. You just need to show that you are unable to perform the essential duties of your occupation.
The next standard courts consider is whether your claim is reasonable. The question is, “Would any reasonable person desist from work in your circumstances?” So, in order to prove you are disabled during the own occupation period, you need to show that your inability to work is reasonable. And that any sensible person would stop working if they were in your shoes.
Another thing to keep in mind is that the own occupation definition of disability looks at whether you are able to complete the work duties of your regular employment. This regular employment doesn’t necessarily refer to your specific job, per se, but rather the type of work you are doing — whether that is for your current employer or anyone else. For example, suppose you are a heart surgeon, and you have developed a severe tremor in your hands. As a result of the tremor, you are no longer able to safely perform any surgical procedures at your place of work or any other hospital. Then, generally speaking, an own occupation policy would say you are totally disabled, and you would qualify for benefits — even though the person in this example could perhaps work as a general practitioner or a general cardiologist.
The own occupation period usually has an expiry date
It is also important to note that the own occupation period usually only applies for a limited period of time. In most policies, it expires after two years of coverage. After which, the definition of disability changes to any occupation. However, this isn’t always the case. For instance, if you have ‘true own occupation’ coverage, then this period will never expire — even if you are gainfully employed in another field. This type of coverage is common among medical professionals, lawyers and independent business owners. However, it is rarely found in group disability insurance policies.
Any occupation
The any occupation definition of disability doesn’t literally mean any occupation. Any occupation refers to occupations that you may reasonably be qualified for, given your experience, education and training. In addition, most policies require that these occupations are “gainful.” Some will outright state that it has to be an occupation in which you could earn equal to or more than a specific percentage of your pre-disability earnings (i.e., 70%). However, most policies DO NOT include a reference to a percentage of pre-disability earnings. The vast majority are silent on this. This makes it more difficult to determine if you meet the criteria for disability from any occupation. However, even without a reference to a percentage, some judges will interpret any occupation clauses to mean at least 60% of your pre-disability earnings, but not always.
Example
Now that we’ve covered the fundamentals of any occupation let’s break it down even further by looking at an example. To keep things simple, we will consider the same example we used above. (i.e., you are a heart surgeon who can no longer complete your essential work duties due to a severe tremor in your hands). But now, you have passed the change of definition and entered into the any occupation period.
In this case, you may not automatically qualify for benefits since this definition doesn’t just relate to your profession. It also considers any other type of work that you may reasonably be able to do based on your education, experience and qualifications. So, suppose you can’t work as a surgeon because of a severe tremor, but your disability wouldn’t prevent you from working as a general practitioner. And as a general practitioner, you would be making 60% or more of your indexed monthly earnings. In that case, the insurance company may be able to prove that you could work somewhere, which may allow them to terminate your claim.
Keep in mind this is just an example. These kinds of situations are much more nuanced in the real world. You should always speak to a disability lawyer if you’ve been denied after the change of definition, as it isn’t always this clear-cut.
A summary: Disability insurance own occupation vs. any occupation
Own Occupation
- The own occupation period typically expires after two years. But this period varies from policy to policy
- You must be able to prove that you are incapable of performing the essential duties of your own occupation.
- Own occupation doesn’t just refer to your specific job with your employer. Rather, it means your occupation in general with your employer or any other employer.
- You need to be able to prove that any reasonable person would desist from work in your circumstances.
Any Occupation
- Once the own-occupation period expires, the any-occupation definition of disability is applied
- “Any occupation” doesn’t literally mean any job. “Any” refers to occupations that you may reasonably become qualified for given your training, education and experience.
- In most cases, these jobs that you may reasonably be suited for must provide at least 60% of your pre-disability income. But not always
- It is much more difficult to pass the any occupation test of disability
Final thoughts
As you can see, the any occupation test is much more stringent than the own occupation. You need to prove that you are unable to do a potentially wide variety of occupations, rather than just your current one. Another difficult aspect of it is this test is quite subjective. One person may think you could work elsewhere, while another would disagree.
Insurance companies will often try to push the boundaries on what is considered a reasonably suited position. And they may try to force you back to work even though you are legitimately disabled from any occupation. We’ve seen this happen time and time again. But the important thing to remember is you don’t have to take the insurance company’s decision at face value. You can appeal it instead. We’ve helped thousands of Canadians win long-term disability benefits after the own occupation, any occupation change of definition. Call us at (888) 480-9050 for a free consultation today.
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