%20(2).svg){kind=small}
Disability insurance pays when you can’t work, but each policy defines what “can’t work” means. “Own occupation” usually means you can’t do your own job. “Any occupation” usually means you can’t do any job. Some long-term plans start with your own job, then switch to any job after a set time, such as 2 years.
Why the definition matters
Insurers define disability differently. The definition can even differ between plans from the same company. It decides whether, and for how long, you get paid.
Own occupation
You qualify if you can’t do the main duties of your own job, even if you could do other work. This is the easier test to meet.
Any occupation
You qualify only if you can’t do any job. This is a harder test. Some long-term plans pay for up to 2 years if you can’t return to your own job, then continue only if you can’t do any job.
Other things to check
- Waiting period: how long you wait before benefits start.
- Benefit period: how long benefits can last. Short-term plans often pay for up to 6 months.
- How much it pays: plans usually replace 60% to 85% of income, up to a maximum. Most long-term plans replace 60% to 70%.
- More than one plan: if you have several disability plans, your total benefit usually won’t be more than 60% to 85% of your regular pay.
- Tax: if you pay the whole premium yourself, benefits are generally tax-free. If your employer pays any of it, benefits are taxable.
Government programs
Employment Insurance sickness benefits can pay for up to 26 weeks if you can’t work for medical reasons. The CPP disability benefit is for people who have contributed enough and have a severe and prolonged disability that stops them from working at any job on a regular basis.
Side-by-side
An example
A dental hygienist injures her hand and can’t do her job, but could do office work. Under an own-occupation definition she would likely qualify. Under an any-occupation definition she might not. Whether a claim is paid depends on the exact policy wording.
Put it into numbers
FAQs
Does my workplace plan use own or any occupation?
Ask your employer or read the plan booklet. Some group plans switch from your own job to any job after a set time.
Are disability benefits taxable?
If you paid the whole premium yourself, benefits are generally tax-free. If your employer paid any part, benefits are taxable.
I’m self-employed. What should I look at first?
Without an employer plan, start with how much monthly income you would need, the waiting period you can afford, and the definition of disability.
Sources
General information only, not advice for your situation. Coverage depends on each policy's terms, conditions, limitations and exclusions.