Definition of disability: what changes outcomes

• Medical disability: A physician determines you cannot safely perform certain activities or work duties.
• Contractual disability: The insurer evaluates whether your condition meets the policy’s written definition.
  This evaluation controls whether benefits are paid—and how long they continue.
• Why this matters: Two people with the same injury can receive very different outcomes under different policy definitions.

Disability insurance is a legal contract first and a medical product second.

• Own-occupation: You are considered disabled if you cannot perform the material and substantial duties of your specific occupation.
  This is the most protective—and typically the most expensive—definition.
• Any-occupation: You are disabled only if you cannot work in any reasonable occupation for which you are suited by education, training, or experience.
  This definition is far more restrictive and often leads to claim denials.
• Modified or transitional definitions: Some policies start as own-occupation and later convert to any-occupation after a set number of years.

The definition answers one question: “Disabled from what, exactly?”

• Highly specialized professionals: Surgeons, dentists, pilots, engineers, executives, and skilled trades rely on specific physical or cognitive abilities.
  An injury that ends the occupation may still allow other forms of work.
• Broad or transferable roles: Administrative, general management, or advisory roles may be easier to adapt to after injury.
• The risk mismatch: Without own-occupation coverage, being “able to work at something” can eliminate benefits—even if your career is over.

If your income depends on a narrow skill set, your disability definition should match that reality.

• Own-occupation example: A surgeon loses fine motor control and can no longer operate. They transition into teaching or consulting.
  Under true own-occupation coverage, full benefits may still be paid.
• Any-occupation example: The same surgeon can teach or consult and is therefore not considered disabled.
  Benefits may be reduced or denied entirely.
• Modified definitions: Benefits may be paid initially, then discontinued once alternative employment is deemed possible.

The injury may be identical—the outcome is driven by language.

• Residual / partial disability: Pays benefits when you can work but earn less due to injury or illness.
  Critical for gradual recoveries or reduced workloads.
• Loss-of-income vs. loss-of-duties tests: Some policies require income loss; others focus on inability to perform duties.
• Benefit period limits: Certain definitions tighten after 24 or 60 months.
  This transition is easy to miss during purchase.

The best definition can be undermined by a poorly designed supporting clause.

• Professionals with licensure or physical skill dependence: Own-occupation coverage is often essential.
• Business owners: Definitions should be coordinated with business overhead and key-person planning.
• Employees with group coverage: Group plans often use restrictive definitions; individual policies can supplement gaps.
• Early-career workers: Locking in stronger definitions early preserves options as income and specialization increase.

Disability risk isn’t about whether you can work—it’s about whether you can earn what you were earning.

Is own-occupation always better?
Not universally. It is more protective, but also more expensive. The value depends on how specialized your income is.

Can group disability plans be trusted?
Group plans provide a baseline, but often use restrictive definitions and cap benefits. Many professionals supplement with individual coverage.

Can definitions change after purchase?
No. Once issued, the definition is contractually locked in—as long as premiums are paid.