I'm in my late 40s and work as a senior leader at a nonprofit organization. My role is largely based on some very specific and somewhat esoteric subject matter expertise I have (rather than, say, generic management experience). Although far from wealthy I'm able to meet my expenses and save some for retirement on the roughly $150k I make.

My wife and I are trying to get our financial house in order and recently started working with some "financial advisors" whom we are belatedly realizing are basically just salesmen (they tried to sell us on whole life which after researching, and with thanks to this sub, we realized really isn't a good fit). That said, we do think we need supplemental life and disability insurance beyond the coverage we get at work and I'm hoping to clarify what we actually need and don't need.

The LTD policy I have through work covers up to 60% of salary to a max of $10k/month and I assume is taxable. It doesn't say anything about occupation, so I assume it is an "any occupation" policy.

Our advisor is currently submitting an application for disability insurance for me to MassMutual (with which he's associated). I asked him whether it was "own occupation" and he said "Own occupation usually applies to highly specialized professions with specific skills like surgeons, dentists, etc. This doesn't apply in your case."

I always hear surgeon as the classic example of "own occupation" but are these policies really only for medical professionals? As mentioned, my work focus is esoteric and there are actually far fewer people who do what I do than there are surgeons.

To be clear, if I were to be somehow disabled to the point that I couldn't do my current job but I could still do some sort of executive/consulting role--okay, fine, I could live with that and wouldn't need a payout. But if I were disabled such that I was unable to do my job but I could be a telemarketer, or bag groceries, would that mean I'd get zero payout? Because if so, I'm questioning the value of such a policy. The key differentiator I suppose is that for my job (and with no disrespect to others) I need to have very sharp critical thinking skills. My nightmare scenario is a case of Long Covid where brain fog would keep me from doing executive/consulting work but wouldn't be so bad that I couldn't do some other kinds of much less interesting and lower paid work.

Or maybe I'm overthinking this and disability insurance is really for the sort of thing where I couldn't do any of those?

Comments

meamemg t1_jefvcid wrote on March 31, 2023 at 6:34 PM

Any occupation generally is any occupation for which you are reasonably qualified by way of your training and background. So, while you should check the language of the policy specifically, they probably would not be able to force you to be a grocery bagger. See https://www.mkdisabilitylawyers.com/blog/change-of-definition-what-does-it-mean-for-my-long-term-disability-ltd-benefits/

Employer provided LTD benefits are taxable, unless you choose to pay income tax on the value of the premium. Your current policy should indicate somewhere a definition of disabled which would tell you whether it is own occupation or any occupation.

Coronator t1_jegupc2 wrote on March 31, 2023 at 10:36 PM

Own occ is rarely needed for most office job types. Your financial advisor is correct - it’s really only needed for very specific professions requiring specific (especially physical) skills (doctors, dentists, musicians, tradesmen, etc).

Think of it this way - if you or I lost a finger somehow, no big deal. A neurosurgeon loses a finger, and now they are out a million dollars a year in income.

Own Occ is a lot more expensive. Anything that would keep someone from doing a typical office job would likely keep them from doing any job (such as a terminal cancer diagnosis, or degenerative neurological condition).