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Choosing The Right Disability Insurance

Disability insurance is a way for workers to protect their ability to earn an income. The insured pays a premium to an insurance company in return for the promise to pay a predetermined monthly benefit if the insured is no longer able to work and earn an income.

There are two important specifications to consider within disability insurance: the “own occupation” type of policy or the “any occupation” policy. An own occupation policy will pay a monthly benefit amount if the insured is unable to perform the duties of his or her own occupation.

An any occupation policy will pay a monthly benefit only if the insured is unable to perform the duties of any occupation. This is a big difference in abilities. Take, as an example, the work of a surgeon. If a surgeon hurts her hand and can no longer perform surgery, she is considered disabled with an own occupation policy. With an any occupation policy, she would not be considered disabled – she could still earn an income, say, teaching students, or working in a lab. Her insurance benefits would not pay out.

Review your disability policy carefully to determine which option is applicable.

SARA PEAK is a freelance writer with expertise in finance and wealth management. Have a money question? E-mail us at

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