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  • Income Insurance

Everything You Need to Know About Own Occupation Disability Insurance

4 min

Taking the leap into self-employment, whether you’re new to the working world or have spent decades in a corporate office, is one of life’s most exciting moments.

It’s not really a surprise then that more than two million people in the United States alone have said goodbye to stuffy suits and long commutes in the last two years.

But if the events of the last 18 months have shown us anything, it’s that life is unpredictable. And when it comes to your health and wellbeing, you can never be too prepared for any and all possible situations.




That’s even more true when you become a small business owner or freelancer. After all, one in four of us will be forced to stop working at some point in our careers due to an unexpected health or wellness issue.

Now, we’re not trying to make you panic and run toward the first job opening you see. In fact, we’re here to reassure you that—with a little bit of preparation—you can head into your entrepreneurial dreams with one big stress taken off your plate. And it’s all thanks to disability insurance.

Here at Asteya, we refer to our policies as “disability income insurance” rather than just disability insurance as we find the name more straightforward in terms of what it's protecting. With that said, we know that the world of disability insurance can be confusing, especially when you’re navigating it for the first time as a self-employed person. That’s why we’re going to break down everything you need to know about one of the most common types of insurance for freelancers–own occupation disability insurance.

What is own occupation disability insurance?

Generally speaking, the purpose of disability insurance is to provide you with money to support you and your dependents should you be forced to stop working due to an unexpected injury or illness.

When your ability to earn a consistent income is so important, disability insurance is there to cover you when that ability is taken away. You’ll pay a monthly or annual premium to the insurance company to maintain your policy. If you ever need to make a claim (and your claim is approved), you’ll then be provided with a monthly payout that can be used however you’d like.




But, not every illness or injury will impact your work in the same way. Depending on your profession, you may be able to continue working in some capacity, just not in the same field that you were in before. Other health or wellness problems may make it impossible for you to work at all. This is where you’ll start to see policies broken down into own occupation or any occupation disability insurance.

Own occupation disability insurance, as the name suggests, will cover you if your unexpected health situation prevents or limits you from being able to work in the same job role that you were doing before the event occurred. That means you’ll still be eligible to receive benefits, even if you could work in some other way, regardless of whether that’s in a similar job in your industry or something completely different.


This type of insurance is typically broken down into three main categories:

  • True own occupation: If you become disabled, you can still claim the full benefits from your policy, even if you choose to work elsewhere. This is usually the most expensive type of policy but it’s the most comprehensive in terms of coverage.

  •  Modified own occupation: This type of policy defines disability as your inability to do any job at all, which means you’ll be ineligible for benefits if you choose to work somewhere else. Even if you can work, you’ll only receive benefits if you don’t take another job.

  • Transitional own-occupation: Similar to true own occupation, this type of insurance will limit your benefits to the difference between your benefit amount and your post-disability income. You’ll only be able to claim if you make less than you did before your disability.


As you can see, the fine print on your own occupation insurance is really important to understand. It’s also important to know what these policies consider as a disability and what isn’t covered before you make any final decisions on what to invest in.


What is considered a disability?

When you’re looking into own occupation disability insurance, it’s even more important that you understand what exactly is covered by your policy and what isn’t.

The most common coverage should always include total disability, which means that you’re not able to work in either your current role or any other job. With this coverage, there’s usually the expectation that you’re currently undergoing medical treatment in the hope that you will eventually recover from your illness or injury and could go back to work later on.




You may also have partial disability coverage included in your policy. This would allow you to claim benefits for any health or wellness issue that isn’t so severe that you need to stop working completely but may reduce your ability to perform certain tasks or require you to work fewer hours. The important aspect of partial coverage is that you’ll need to show that your responsibilities or income have been reduced as a result of your illness or injury.

Finally, there’s a presumptive disability. This is the most severe type of coverage and will allow you to claim benefits for health and wellness problems that are considered permanent and debilitating. No matter what type of insurance policy you have, you will be able to receive benefits as it’s generally considered that you won’t be able to recover from conditions that fall under this category.

As you’re looking at the details of what is and isn’t covered by your policy, it’s also important to note anything that may be considered a pre-existing condition. These are usually health and wellness issues that you already have ahead of taking out your insurance policy. It’s especially important to understand any specifics around pre-existing conditions, as many policies will not allow you to make a claim for any illness or injury that could be associated with a condition that existed before you took out the policy.

How is any occupation disability different from own occupation?

Unlike own occupation insurance, any occupation disability does not allow you to claim benefits if you are able to work in any way, regardless of what the job is and what industry it’s in.

On the front end, this type of policy will generally be one of the cheaper options in terms of monthly or annual premiums, but it’s also the strictest form of disability insurance when it comes to definitions of what you can and can’t do.

The key difference to be aware of between any occupation disability and modified own occupation is that, with modified own occupation, you’ll receive benefits if you could work but choose not to. With any occupation, you have to be physically or mentally unable to perform job tasks for any kind of work, in any industry.

It’s really important to think carefully about possible outcomes before jumping into any occupation policy, as you could end up in a situation where you’re only able to claim benefits if your condition is severe enough to prevent you from working.


Who should choose any occupation over-owned occupation?

Whichever type of insurance policy you’re interested in, it’s good to consider what exactly your day-to-day job looks like before making any final decisions. You’ll usually find that, for certain occupations, one kind of insurance is better suited than the other. 

If you work in a highly-paid or highly-skilled position, own occupation will often be your best choice. For example, a contractor or builder who loses the use of a limb would be unable to work in their chosen field but may still be able to do some other kind of job like office work or shifting to a supervisory role. In that situation, they wouldn’t be able to claim any benefits if all they had was any occupation insurance because they’re still capable of doing work to some extent.




For individuals who work in lower-paid jobs or are in positions that don’t require specialized skills (like retail, food service, hospitality, or customer service roles), any occupation insurance will usually be sufficient. In these cases, any disability that would stop them from working in these jobs would likely prevent them from doing any work at all, so benefits under this type of policy would still be paid out.


Keep your future earnings protected from an unexpected bump in the road

There’s a lot to work on when you’re getting started with your own business, but thinking about how you’re going to grow and succeed isn’t the only kind of future planning you should be doing.

Considering how your life could be impacted if you were suddenly unable to work isn’t something that anyone wants to think about, but having a safety net to support you in case the unexpected were to happen is a smart financial move.

Particularly if you’re working in a highly-skilled industry, knowing that your insurance coverage will be there to keep you and your family afloat is peace of mind that’s hard to find anywhere else.

Prepare for the unexpected and apply now for a “no exam” disability insurance policy with Asteya.



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