What Is an Any-Occupation Policy?

An any-occupation policy is a type of disability insurance that categorizes the kind of work for coverage purposes. Any-occupation coverage provides for when the insured is unable to work in a job that is reasonably suitable for them based on their education, experience, and age. 

An any-occupation policy terminology, as used in disability insurance policies, identifies the conditions under which a policyholder receives benefits. 

Understanding an Any-Occupation Policy

The any-occupation terms in the policy specify the type or nature of work that a policyholder is able to perform. If they are capable of still working, even if it is at a lower-paying job, an any-occupation policy would not pay benefits. In contrast, the own-occupation policy is one that would consider the policyholder disabled if they are unable to perform the same job as they did before an accident or injury.

For example, under an any-occupation policy, a surgeon who injured their hands would not receive benefits if they could still work as a doctor in the medical field, but not as a surgeon. Under the own-occupation, they would continue to receive benefits until they could return to practicing surgery again.

However, if their disability prevents the policyholder from performing any occupation for which they are reasonably qualified, they would qualify for benefits. Returning to the example of the surgeon, if they could not function in a hospital setting without specialized equipment or assistance the benefits will continue.

Employer-provided disability insurance may only be available as an any-occupation policy. Employees may purchase a supplemental disability policy for additional protection.

Before paying claims, an insurance company will assess the individual's disability and salary history, in addition to performing a wage analysis of other similar and available occupations before determining a payout amount.

Own-Occupation Policy

Own-occupation coverage is for the insured’s specific occupation with no other stipulations. If they are unable to perform the material and substantial duties of their pre-injury occupation, the benefit is paid, regardless of whether they choose to work elsewhere.

For example, if the pre-disability surgeon found a new profession as a marketing director for a software company, they would still receive the full benefit. If the insured meets the definition of totally disabled and becomes employed in a new occupation, their total disability benefit will not be affected or lessened by any income from the new profession, regardless of the amount.

Additional Any-Occupation and Own-Occupation Hybrid Policies

Transitional own-occupation coverage is own-occupation with an adjusted benefit. If the insured chooses to work in any other occupation, the earnings from the new profession might reduce the benefit amount. If the surgeon's full benefit amount was $8,000 each month and their new marketing position paid $6,000, the benefit could decrease to $2,000.

Some insurers offer a bonus-hybrid version of disability insurance. At the beginning of receiving benefits, the own-occupation definition guides payments. After a defined period of months or years, the coverage changes to a stricter definition of occupation. For example, it may only continue to pay the benefit if the insured remains unable to work at a profession for which they are qualified and does not work at any other occupation.