When and if an own occupation policy can be obtained, the annual premium can be quite expensive.
A modified own occupation policy is one that pays only if an insured is unable to engage in his or her chosen occupation and is also unable to work in a reasonably alternative occupation--or one for which the client is qualified by education, training, or experience.
A projection of 3% of gross client income may provide a rough estimate of the premium cost for a modified own occupation policy with a 90-day elimination period.
This strategy is cost-effective and a more readily available alternative than an own occupation policy.
While it is almost always a good idea to recommend an own occupation policy, coverage may not be available, the client may not qualify for this type of coverage, or the cost may be prohibitively expensive.
First, premium costs tend to be lower than for an own occupation policy.