Why Physicians Should Look For Disability Insurance Outside of the American Medical Association

Why Physicians Should Look For Disability Insurance Outside of the American Medical Association

If you are a physician then chances are you have received solicitation from the American Medical Association (AMA) to purchase disability insurance using their name through US Life.

Remember from all our other blogs that the Physicians and Dentists purchase disability insurance more than any other white collar professional. This is because you have been told that you need to purchase own occupation or own specialty disability insurance and you are looking for a disability contract that covers your abilities in your specific specialty, not just your ability to work.

The American Medical Association through US Life does not offer the type of own occupation/own specialty disability insurance that physicians are looking for, but they will never tell you that.

Here is what we have learned about the AMA sponsored plan through US life:

  • Their definition of disability is by far one of the worst available in the industry
  • For 60 months totally disabled or total disability means your complete inability to perform the substantial and material duties of your current occupation beyond the end of the elimination period, and you are not engaged in any occupation.
  • After a period of 60 months you are only considered disabled if you are unable to work in ANY occupation for wage or profit for which you are qualified for based on your education, training or experience.
  • The AMA plans premiums are not guaranteed. They increase currently in 5 year intervals.
  • Your waiting period of 90 or 180 days must be total and consecutive. This means if you go back to work on the 73rd day your waiting period will start over from scratch.
  • You can only purchase a benefit up to 12,500 a month.
  • The rates typically start out low and will increase as you age. The rates are not guaranteed and are always subject to change.

Ok, so for someone who knows disability insurance like we do, that’s bad. You’re a doctor. Why would you purchase a policy with such a limitation? Is it because of the price? You aren’t trying to win the award for cheapest disability insurance premium are you? No, you are trying to buy a policy that protects all that you have worked for.

This plan clearly states that you are only considered disabled by them if you are not able to perform the duties of your specialty and are not working in any other occupation for wage or profit. And to add to the already sub-par definition they limit this to only 60 months. After 5 years of payments, they reserve the right to determine if you are qualified to work in ANY occupation. If they determine you are then benefits will cease. Their premiums are not locked in and are guaranteed to increase ever 5 years, and they reserve the right to change their increase amounts. So if you actually do the math, you will spend more during the life of your AMA contract then you would have had you just purchased the right type of policy to begin with.

So be smart, read the AMA contract, it’s obvious that the AMA plan is the wrong direction to go if you are truly looking for specialty protection.

Good Own Specialty coverage will pay you if you are unable to perform one or more of the duties of your specialty even if you are working in another field. Good Own Specialty coverage will allow you to accumulate your waiting period and pay your benefit to the age of 65, 67, or 70 regardless of your ability to work in another field. And finally, good own specialty coverage will never increase in premium.