Are there different types of individual disability insurance policies?
Yes. There are several types of policies. Two of the most common include: (1) The “Own Occupation ” policy. This type of policy insures you against becoming unable to perform “the substantial and material duties of your own occupation”. This coverage pays a monthly benefit if you can no longer perform the specific tasks of your work (as a contractor, for example, or as a dentist, etc). Benefits with this type of coverage are paid regardless of whether you are able to perform other types of work. (2) The loss of income policy. This coverage pays only for loss of income. In other words, if you switch occupations due to a disability, the policy will provide benefits based on a specific formula relating to reduced income. You will not be paid just because you can no longer perform your occupation, and your benefits will depend on the difference between what you could have earned and what you actually do earn in a new occupation. Other types of individual disability policies provide coverag
