North Western Mutual’s Disability Insurance Product for Doctors

North Western Mutual’s Disability Insurance Product for Doctors

We have all heard the hype. Yes, Northwestern Mutual has excellent ratings and their brand name is impressive. But that doesn’t mean you should be confused about what own specialty disability insurance really means.

 

Own Specialty is defined as:

 

“Own Specialty or Totally disabled means that, due to sickness or injury, you are not able to perform the material and substantial duties of your medical specialty. You are still considered disabled even if you are working in another specialty or occupation”

 

What this means: If due to injury or sickness you cannot perform your duties in your specialty, then you will be considered totally disabled, even if you are working in any other occupation. So long as you cannot perform at least one or more of the duties in your specialty, you will receive your total disability insurance benefit regardless of your new income. This is great. This is what doctors want.

 

Now here is what North Western Mutual delivers to the table:

The “Medical Occupation” definition of total disability offered by North Western Mutual sounds similar to the true definition of “Own Specialty” listed above. But, it’s much different.

 

North Westerns Medical Occupation of total disability is defined as:

The insured is totally disabled when both unable to perform the principal duties of the regular occupation and not gainfully employed in any occupation. If the insured can perform one or more of the principal duties of the regular occupation, the insured will be considered totally disabled if

1. More than 50% of the insured’s time in the regular occupation at the time the disability began was devoted to providing direct patient care and services;

2. The insured is not gainfully employed in any occupation; and

3. At the time disability began, the insured was primarily engaged:

(I) In a procedure-based medical or dental specialty for which board certification is available and the insured is unable to perform the principal procedures of the medical or dental specialty. The insured will be considered to have been primarily engaged in procedure-based medical or dental specialty if billing codes during the 12 months before the disability began demonstrate that more that 50% of the insured’s charges for patient care and services resulted directly from principal procedure performed by the insured; or

(II) In a non-procedure-based medical or dental specialty for which board certification is available and the insured is unable to perform the principal duties of non-procedure-based patient care and services. The insured will be considered to have been primarily engaged in a non-procedure based medical or dental specialty if billing codes during the 12 months before the disability began demonstrate that more than 50% of the insured’s charges for patient care and services resulted directly from non-procedure based patient care and services performed by the insured.

If the insured can perform one or more of the principal duties of the regular occupation and the insured is not considered totally disabled, the insured may qualify as partially disabled.

 

Wow, that’s a lot of language. Confused? Here’s what North Western Mutual is thinking:

 

They believe that the industry’s True definition of “own Specialty” (Own-Occupation) requires a surgeon (for example) to be unable to perform ALL of their surgical and nonsurgical duties in order to be considered totally disabled. So, they are saying that since most doctors will not satisfy this, that their definition of “Medical Occupation” provides greater clarity and flexibility.

 

This is incorrect. If a surgeon performs surgery and his practice of seeing patients comes from his ability to perform surgery then his specialty is being a surgeon. Therefore, if he becomes sick or injured in a way that causes him to no longer be able to perform the surgery side of his occupation then he is considered to be totally disabled even if he can still see patients in the office. Under the true “Own Specialty” (Own Occupation) definition of total disability offered from Guardian, Ameritas, Principal, and The Standard, the insured would receive their full monthly benefit regardless of the income they were receiving doing something different in the medical field.

 

Northwestern Mutual agents like to ignore or play down that 2nd statement in their definition of Medical Occupation. “The Insured is not gainfully employed.”

 

Plain and simple, regardless of all language they use to describe what medical own occupation actually means there is still a black cloud flying above. And it’s the number 2 statement where they say “the insured is not gainfully employed.” This 6 word phrase means a heck of a lot more than the 7 paragraphs Northwestern Mutual Uses to explain their “medical occupation” of total disability. This 6 word phrase that says not gainfully employed means exactly what it says, not gainfully employed.

 

If a surgeon can no longer perform surgery because of a sickness or injury, North Western mutual will only pay his full benefit so long as he/she is not working.  If he/she is working, they will only recieve their full disability benefit if he/she is earning less than 20% of his/her prior earned income as a surgeon working in another field. This is usually not what doctors are lookign for when they are shopping for “own specialty/Own Occupation” coverage.

 

Northwestern mutual agents will sometimes defend their position by trying to point out to physicians that it will be difficult for them to earn the same amount of income if they can no longer do their specialty. For lesser risk specialties they will tell you that if you can be a doctor (pediatrician) that would mean you probably couldn’t do another occupation anyway, so buy our product.

 

The simple fact is that these things are wrong. How do insurance agents know what your future disability is going to be?  He/She sold you the policy, they aren’t the ones who are bound by a written contract to cover your disability. Your contract is everything.  Why even bother with playing the odds. Just purchase a true own occupation definition of disability from the carriers that actually still offer this benefit. Because you are covered, and you can earn unlimited income in any other field of your choosing if you become disabled in your specialty.

 

It’s not like Northwestern Mutual is offering any super pricing discount. They are just as expensive and in a lot of cases more expensive then the carriers offering “own occupation/own specialty” benefits.

 

Often times once you have convinced the the agent that “own occupation” (Own Specialty) language is too important to ignore, they will tell you about the strength that their company possess. Yes it’s true that Northwestern mutual is an excellent carrier with high ratings. But, so are the other five carriers I mentioned in this blog.

In fact, Northwestern Mutual used to offerexcellent own specialty benefits. But since the late 90’s they switched out of that market and started offering this modified definition of “Medical own specialty.”  This is likely why you’ve heard that it’s hard to get true ownspecailty coverage these days.  Well it’s not hard, it’s always been there.  You just have to work with a carrier that offers it.

 

So don’t be convinced that a true “own Specialty” (own occupation) definition of disability isn’t as important as it is. Read the language and determine with your financial advisor what is really important to you, your family, and your practice.

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