About Disability

True Own Specialty Disability Insurance will have a definition for (Total Disability or Totally Disabled) That Reads as Follows:

Total Disability or Totally Disabled means that, due solely to sickness or injury, you are not able to perform the material and substantial duties of your occupation (Own Specialty). If you are a physician or dentist and you have limited your duties to the performance of the usual and customary functions of a specific, professionally recognized medical or dental specialty, we will consider that specialty your occupation.

What does this mean for doctors?

If for some reason due to a sickness or injury you are unable to do your specific specialty the insurance carrier will consider you totally disabled even if you are still working in any occupation for wage or profit. You will be eligible to receive your full monthly benefit regardless of how much income you are earning in another field.

There are only a few carriers that offer this preferred definition of disability:

Ameritas, Met Life, Principal, and The Standard

Modified Own Specialty Definition for (Total Disability or Totally Disabled) Reads as follows:

Total Disability or Totally Disabled means that, solely due to sickness or injury, you are not able to perform the material and substantial duties of your occupation and you are not working in any occupation for wage or profit.

What does this mean for doctors?

If for some reason due to sickness or injury you are unable to work in your specialty you will be considered totally disabled so long as you have no other income sources. In the even that you earn income in any field your disability benefit will be reduced or eliminated based on the amount of income you earn doing something different. This is not a preferred definition of disability insurance among the medical community.

Examples of carriers and medical associations that only offer this definition of disability:

North Western Mutual, UNUM, Mass Mutual, New York Life, American Academy of Pediatrics, American College of Physicians, ACOG, American Academy of Pediatrics, American College of Surgeon, American Academy of Family Practitioners, Most Group Insurance Plans offered through your employer.

Modified Own Specialty Definition for (Total Disability or Totally Disabled) with a limited time period for own occupation benefits. Usually 24 or 60 months. Reads as follows:

Total Disability or Totally Disabled means that, solely due to sickness or injury, you are not able to perform the material and substantial duties of you occupation (specialty) and you are not working in any occupation for wage or profit. However, after you have received 24 or 60 months (depending on the carrier), of base monthly benefit due to the same disability, total disability or totally disabled means that, solely due to sickness or injury, you are not able to perform the material and substantial duties of any occupation.

What does this mean for doctors?

If for some reason due to sickness or injury you are unable to work in your specialty you will be considered totally disabled so long as you have no other income sources. This is very similar to a regular modified own occupation definition of disability. Except in addition to this limitation you are also limited to a 2 or 5 year disability benefit in your specialty. After a period of 2 or 5 years (depending on the carrier) you can only continue to receive disability benefits if you are unable to work in ANY occupation for which you are qualified to perform. In addition to this limitation, during the first 2 or 5 years of disability you are also limited in working in any other field. This is the least preferred definition of disability insurance among the medical community. Interestingly enough a lot of professional associations like the AMA only offer plans like this.

Examples of carriers and medical associations that only offer this definition of disability:

American Medical Association, Some Group Plans

Base Monthly Benefit

This means the amount paid under the terms of your policy each month you are totally disabled after you have satisfied your elimination period.

What does this mean for doctors?

This is the amount of benefit you own and are due from the insurance company on a monthly basis. if you own a pure own occupation definition of disability, you will receive this base benefit for the length of your disability policy. Usually to the age of 65, 67, or 70.

Elimination Period or Waiting Period

Means the period of time you must be totally disabled before you are eligible to receive your base monthly benefit.

What does this mean for doctors?

If you own an individual plan your elimination period is the amount of accumulated days you must be disabled before you can start to collect benefits. Elimination periods are usually 90 days. They can be longer if you choose, but it is not normally recommended. It is important to remember that individual plans offer the benefit of accumulating your elimination days. Since most disabilities happen gradually over time this is a very important feature that most advisor over look. Group plans and plans offered through medical associations work differently. Elimination period is the amount of consecutive days of total disability before you can start collecting disability benefits. This is big difference on something that looks very similar on the surface.

Presumptive Total Disability

We will consider you totally disabled if, while this policy is in force, you sustain the total loss of:

  • the sight in both eyes; or
  • the hearing in both ears; or
  • speech; or
  • the use of both hands; or
  • the use of both feet; or
  • the use of one hand and one foot

What does this mean for doctors?

In the event of a major disability as mentioned above, most individual insurance carriers will waive your elimination period and consider you to be permanently disabled. Some of the individual carriers offer better variations of this definition which offer even more protection, but for the most part this is a pretty straight forward definition.

Waiver of Premium

You must continue to pay premium until your claim has been approved. We will waive any premium on this policy as it comes due, until total disability ends, beginning with the date your claim is approved but no before 90 days of continuous total disability. Once we start waiving premium, we will also refund any premium you have paid on or after the date you became totally disabled.

What does this mean for doctors?

Once you realize you are disabled you will obviously submit your claim to the insurance company. During this period you continue to pay your disability premiums. You also continue to pay your premiums during your elimination period.. Once your disability insurance claim is approved you will receive a refund for all premiums paid during your elimination period. You do not make any more disability payments while you are collected benefits.

Non-Cancelable and Guaranteed Renewable

You have the right to continue this policy to age 65 (or 67 and 70) on each policy anniversary. Until age 65 (or 67 and 70) we shall not:

  • Cancel this policy except for nonpayment of premium; nor
  • increase the premium; nor
  • add any restrictions

What does this mean for doctors?

Most doctors purchase policies with a non-cancelable and guaranteed renewable definition. Having this present on your policy guarantees that as long as you pay your premiums your individual disability insurance carrier guarantees that they will never raise your premiums, cancel the contract, or make any changes to policy definitions. This means that your Doctor Disability Shop Discount is guaranteed for the life of your contract and can never be taken away. Only Individual carriers offer non-cancelable and guaranteed renewable contracts. All group contracts are subject to changes and cancellations. All medical association policy are subject to cancellation, rate increases, and policy provision changes at any time.

Guaranteed Renewable Only.

Until you reach 65, you policy cannot be canceled and restrictions cannot be added, as long as you continue paying premiums as due. We reserve the right to change the premium rates; however, the change will apply to all policies of this form and class for your state. Your new premium will be based on your original issue age and occupation

What does this mean for doctors?

This option can sometimes be a safe way to offset some of the high premiums for own specialty disability insurance. If your carrier offers this option it can be used to reduce your costs. Your policy is guaranteed renewable, but the insurance carrier reserves the right to increase your policy on a class basis. Talk to your advisor. Rate increases have never been exercised but that doesn’t mean they never will. However, sometimes the savings in premium make this a good option. Talk to your Doctor Disability Shop agent for more information.

Residual Disability Benefits or Partial Disability

  • your loss of monthly earnings is at least 15% or 20% (depending on your carrier) of your prior monthly earnings; and
  • your loss of monthly earnings is the result, directly and apart from any other cause, of an injury or sickness as defined in the policy; and
  • you are able to perform one or more, but not all, of the material and substantial duties of your occupation; or you are unable to work in your occupation for 80% or 85% (depending on your carrier) or more of the time as was usual prior to the start of your disability.

What does this mean for doctors?

Most disabilities fall under residual claims. This means you are disabled and have met your elimination period but you are still working in your specialty. Although you might be able to do the duties of your occupation, you might not be able to earn the same income due to your limitations. When you have residual benefits on your policy you are also protected from the risk of partial disability while working in your specialty. You will receive a pro-rated amount of your disability benefit while on residual disability claim. This formula is based on the percentage of income you are earning now against the income you were earning prior to the date your disability began. This is an important feature and is usually mandatory for all physicians.

Cost of Living Adjustment or (COLA)

As long as you remain disabled, the base monthly benefit will be increased by the lesser of 6% (sometimes this is 3%, 4%, 5%, or greater depending on your carrier) compounded annually or the change in the consumer price Index (CPI-U), on each anniversary of the date of disability. Benefits will not be increased by this rider after the age of 65 but will remain at the same level applicable at the age 65 until benefits cease. You have a qualified right to purchase the increase amount under this rider upon your recovery and return to your occupation on a full-time basis.

What does this mean for doctors?

Most physicians recognize the fact that what a dollar buys today might not be of the same value 10 years from now. That’s why we purchase COLA riders when applicable. This is a inflation protection rider that guarantees that your disability insurance benefit is keeping base with the rise in inflation. Having the compounded option simply means your benefit grows using compounded interest.

Catastrophic Benefits Rider or (CAT)

Following the elimination period for this rider, we will pay the catastrophic benefit amount for each month that you are catastrophically disabled due to injury or sickness. Catastrophically disabled means you are unable to perform two or more activities of daily living without stand-by assistance; or you require substantial supervision due to sever cognitive impairment. Activities of daily living are: dressing, toileting, transferring, continence, eating, and bathing. Benefits continue as long as you remain catastrophically disabled or to the end of the Catastrophic Maximum Benefit period on your policy.

What does this mean for doctors?

You have the option to add this rider to your policy. It will provide you with an extra monthly benefit above your base monthly benefit in the event you become catastrophically disabled as mentioned above. It is a very inexpensive rider as statistically the likelihood of not being able to perform two of six activities of daily living before your retirement age is small. However, for some reason it is the most recognizable disability when one is asked if they can describe what being disabled means. This is can end up being a valuable rider on your policy and you should discuss the benefits further with you Doctor Disability Shop adviser.

sidebar1

sidebar2