Own vs Any Occupation

Comparing TPD insurance? Understand the difference between Any vs Own Occupation cover.

Any occupation cover and own occupation cover are two types of cover that apply to Total and Permanent Disability Insurance (TPD). They sound similar but are different when it comes to claim time.

Both payout when injury or illness forces you out of work...

But the key difference is the types of jobs you are forced out of.

Own occupation

Covers you as long as you are unable to work in your own occupation or profession (i.e. the job you have currently been working in).

Any occupation

Covers you if unable to return to the workforce in any occupation that is suited to your education, training or experience. This is a much broader definition that's harder to prove.

So how does it work? The table below discusses that ways in which a payout is triggered for both types of cover.

Own vs Any Occupation: When do they payout?

This will depend on the extent of your disability and your ability to work.

Extent of your disability
Own Occupation
Any Occupation
Your disability leaves you unable to work in any type of occupation.
  • Eligible for payment
  • Eligible for payment
You can no longer work in your occupation from before but you are still able to work in a different field e.g. anything suited to you:

  • Education
  • Training
  • Experience
  • Eligible for payment
  • No cover

What occupation type should I go for?

It depends on your occupation.

In many cases, it makes more sense to choose an own-occupation policy

For instance, if you've invested a lot of time and effort to get into the position you are currently working in, then 'own-occupation' is probably your best option. That's because if something goes wrong and you can't do your job anymore, it's highly unlikely you'll be able to find a job that earns you the same income. Own-occupation makes sure those years of hard work, studying and training are protected if something bad happens.

Any-occupation is cheaper

While 'any-occupation' cannot provide the same security and peace of mind that 'own-occupation' can, you will likely pay lower premiums for an any-occupation policy. It might also be a good option if an injury that stops you working at your job means you won't be able to most other jobs. For instance, if you're an accountant then you'll probably need a severe injury to stop you from working - which would stop you from working most other jobs too.

You may not have a choice

For certain professions, you might not have an option. Many insurers do not cover trades such as electricians, carpenters and scaffolders with an own-occupation policy due to the likelihood of a payout.

What's right for me? Both have a catch

There is an upside to both types of policies and it essentially comes down to a matter of preference.

Own Occupation

Own occupation cover is the preferred type of cover to have, as it provides you with the greatest opportunity to make a successful claim, given how specific the terms are. Because of this, it’s also the more expensive of the two types of cover and is harder to take out. It’s also limited to certain types of occupations.

Any Occupation

Unlike own occupation, its terms are quite broad and an insurer could argue that there are suitable jobs that you could perform, some of which might bear little resemblance to your previous occupation. The upshot of this is that any occupation cover is the cheaper form of cover as it's harder to make a claim for a disability (in comparison to own occupation cover).

Own Occupation vs Any Occupation: The reasons for and against

  • Reasons for
  • Reasons against
Own occupationClearer definition of disabilityMore expensive than Any Occupation
Greater chance of a payout in a claimAvailable to less occupation types
Won't payout in superannuation / No longer available
Any Occupation
  • Reasons for
  • Reasons against
Less expensive than Own OccupationLess clear definition of a disability
Available for more occupation typesLess chance of receiving payout
Available in superannuation policies

Which types of insurance are affected by these definitions?

The any occupation and own occupation definitions apply to Total and Permanent Disability (TPD) Insurance and Income Protection Insurance.

Own Occupation

Own occupation cover in a TPD Insurance policy means you will receive a payout if you are totally and permanently disabled and are unable to work in your usual occupation or chosen field of employment.

Any Occupation

Any occupation cover in a TPD policy means you can claim if you are totally and permanently disabled and can’t work in any occupation that you are suited to by education, training or experience.

Own Occupation

Own occupation cover in an Income Protection policy means you will be covered if you are unable to work in your chosen profession due to illness or injury.

Any Occupation

Any occupation cover in an Income Protection policy means you will be covered if you cannot work in any occupation you are suited to by education, training or experience due to illness or injury.

Consider this when applying for income protection insurance

Because Income Protection Insurance protects your ability to earn with most policies paying up to 75% of your current net income, having own occupation cover with this type of insurance is infinitely preferable. If you held any occupation cover and were deemed fit to work in some other job requiring few skills or little experience, you could find yourself earning considerably less, something that Income Protection Insurance is designed to prevent.

How does tax work when it comes to any or own occupation cover?

Recent amendments to The Tax Act have made any occupation cover preferable to own occupation cover, at least for TPD Insurance. This is because the new legislation has made TPD premiums tax deductible to the extent that they relate to a superannuation disability benefit.

How to does TPD insurance look inside tax

This is defined as a benefit paid to a person because they suffer from ill health and have been certified as unlikely to ever be gainfully employed in a capacity for which they are reasonably qualified due to education, training or experience.

While most policies with any occupation cover have definitions quite similar to this, those with own occupation cover are usually quite different, meaning that your TPD premiums won’t be tax deductible.

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