Own-Occupation Policy - Explained
What is an Own-Occupation Policy?
If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
What is an Own-Occupation Policy?
An own-occupation insurance policy is a type of policy that covers individuals who suffered a disability during the period of employment. When an individual becomes disabled and is unable to carry out the tasks he or she was trained to perform, the own-occupation insurance policy provides coverage. This type of insurance policy allows an individual to claim disability insurance benefits and offers them protection from losing their means of income when they become disabled. Whether a disabled person is able to earn an income doing another job they are not trained for does not disqualify such person from the benefits of this insurance policy. For instance, when a driver becomes disabled in the legs, he can take up another job that does not require active use of legs and still earn an income.
There are some key points that should be noted in an own-occupation disability insurance policy. These are;
- The term disabled or disability is defined in the insurance contract by different carriers, this term has flexible definitions.
- A policyholder will only receive benefits if they are unable to work in their own occupation.
- Whether a policyholder finds another job or occupation or not does not deprive them of the full benefit payments in an own-occupation policy.
Back To: INSURANCE & RISK MANAGEMENT
What does an Own-Occupation Policy Cover?
An own-occupation insurance policy is otherwise called a "pure own-occupational policy." This policy protects an individual from losing their means of income because of a disability they suffered while on a particular job. In an own-occupation policy, a policyholder is entitled to a monthly benefit paid by the insurance carrier. Although own-occupation policies are more expensive than other forms of disability insurance policies, they offer more benefits. This policy only covers individuals that are working as at the time they become disabled.
Example of How Own-Occupation Policies Work
The illustration below will help you better understand how an own-occupation disability insurance policy works; Brandy is a professional typist that works with a reputable organization. As an own-occupation policyholder, if Brandy suffers a disability that made him lose his hands or finders, he is entitled to receive full benefits paid by the carrier of the policy. If Brandy thereafter takes up a job with another firm that does not require the use of fingers, he is still entitled to receive full benefits payment. An own-occupation disability insurance policy is only designed for individuals who suffer a disability during the period of employment.
- What is insurance?
- Captive Agent
- Independent Agent
- Captive Insurance Company
- Combined Ratio
- Claims Adjuster
- Capital at Risk
- Assigned Risk
- Incurred But Not Reported
- Qualified Actuary
- Cession (Re-Insurance)
- Burning Cost Ratio
- What is an insurance contract?
- Accidental Means
- Anti-stacking Provisions
- What is an insurable interest?
- What are the common categorizations of insurance?
- National Association of Insurance Commissioners
- Insurance Regulatory Information System
- American Academy of Actuaries Definition
- American Association of Insurance Services Definition
- American Council of Life Insurance Definition
- American Insurance Association Definition
- American Risk and Insurance Association Definition
- LLoyd's of London
- Associate in Insurance Services (AIS) Definition
- Associate in Loss Control Management Definition
- Associate in Marine Insurance Management Definition
- Associate in Personal Insurance Definition
- Associate in Reinsurance (ARe) Definition
- Associate in Risk Management Definition
- Associate in Commercial Underwriting Definition
- Associate in Insurance Accounting and Finance Definition
- Associate in Surplus Lines Insurance Definition
- Chartered Insurance Professional Definition
- Chartered Life Underwriter Definition
- Chartered Property Casualty Underwriter Definition
- Vehicle insurancePrivate Passenger Auto Insurance Risk Profile
- Underinsured Motorist Coverage
- Uninsured Motorist Coverage
- Omnibus Clause
- Health Maintenance Organization
- Capitated Contract
- Point of Service Plan
- Children's Health Insurance Program
- Disability Insurance?
- Credit Disability Insurance
- Life Insurance?
- Cash Surrender Value
- Absolute Beneficiary
- Acceleration Life Insurance
- Accelerated Benefit
- Accelerated Option
- Accelerative Endowment
- Charitable Gift Life Insurance
- Incontestability Clause
- Waterfall Concept
- Assumed Interest Rate
- Clean Sheeting
- Hazard Insurance
- Homeowners, Renters, and Fire Insurance?
- Participating Community (Flood Insurance)
- Insurance Considerations for Business
- Business Liability Insurance
- Commercial General Liability
- Liability Risk Retention Act
- Excess Insurance and Umbrella Insurance Policy
- Business Interruption Insurance
- Key Person Insurance Definition
- Own-Occupation Policy
- Self-Funded Health Insurance Plan
- Basket Retention Policy
- Commercial Blanket Bond
- Alternative Risk Transfer Market Definition
- Commercial Property Casualty Market Index Survey
- What are the primary obligations of the insurer?
- Earned Premium
- Reservation of Rights Letter
- Collateral Source Rule
- What are the primary obligations of the insured?
- Insurance Premium
- Affidavit of Loss
- What is the general structure of an insurance contract?
- Ambiguity Principle
- Accommodation Line
- What are the common disputed provisions in an insurance contract?
- Absolute Exclusion
- All Risks Clause
- What is required for the termination of an insurance contract?
- Risk Management
- Professional Risk Manager
- Associate in Management (AIM)
- Financial Risk Manager
- Forecasting (Business)
- Objective Probability
- Unconditional Probability
- Enterprise Risk Management (ERM)
- Operational Risk
- Business Recovery Risk
- Political Risk
- Asset Protection
- Performance Bond
- Barra Risk Factor Analysis Definition
- Above Ground Risk (Mining Industry)
- Bumbershoot Policy (Maritime)
- Abandonment Clause (Boat or Vessel)
- Bobtail Liability Insurance (Trucking Industry)
- Anti-Indemnity Statute (Construction)