The strength of the provisions of any disability policy varies based on the type of policy. The main policies are individual, association plans, loss of earnings, and employer sponsored group plans.
We recommend all our clients, as physicians, to obtain a policy that protects them in their own specialty. This kind of policy is defined as an own-occupation policy, which protects the income you earn in your own specialty and continues to pay benefits if your disability requires that you choose a new specialty or occupation. The most comprehensive policies are own-occupation, non-cancelable, and guaranteed renewable; these policies put you in total control, not the insurance company, practice or association. The insurance company cannot raise rates, reduce rates, add exclusions, or cancel your policy at anytime; you are in control, and the policy is portable and goes wherever you go. The benefit is determined by your income and you can obtain up to a maximum of $15,000 per month with one company and $20,000 per month of coverage total.
The strength and integrity of association plans are determined by the association. You have no control if the insurance company decides to raise rates, reduce benefits, add exclusions, or cancel you anytime. The definition of disability is not own-occupation for the full benefit, and there are no “true” guarantees. You cannot continue coverage if you leave the association, which can pose a problem as almost 40% of disability applications are either issued with exclusions or declined.
These types of policies protect you against a loss of earnings. Unlike own-occupation plans, these policies will only pay if you are disabled and are also suffering a loss of income. The insurance company would pay you a percentage of your full benefit proportionate to what you’re earning in your occupation.
These plans share the same characteristics of association plans. It is important to obtain an individual plan before going on the group plan in order to maximize the monthly benefit you are eligible for. Contact a licensed DI4MDs.com agent for any questions or guidance.
This policy provision increases the policy benefit on an annual basis without evidence of medical or financial insurability. This provision helps the benefit level keep pace with the rising cost of living.
A benefit period is the maximum amount of time the insured may receive proceeds for a continuous disability. The benefit period is subject to underwriting requirements. The insured may select a benefit period of two years, five years or up to retirement age of 66 or 67.
A concurrent disability occurs when there is more than one injury or illness. Though there is more than one factor causing disability, the concurrent disability benefits are paid as if there is only one injury or illness; the insured will be considered to have one disability. Once a continuous period of disability begins, it remains one period, no matter what or how many injuries or illnesses caused the start or continuation of disability.
A disability caused by cosmetic surgery or transplant surgery is considered the same as a total disability due to illness after six months of coverage.
A cost of living rider increases the disability benefit each year according to a percentage derived from the Consumer Price Index measure.
Also referred to as the qualifying period, the elimination period is the time during which an employee must be disabled before benefits will begin.
Disability policies include specific conditions in which a disability will not be covered. For example, many plans will not provide benefits for disabilities arising from being in a war, participating in a riot, committing a felony, or self-inflicting an injury.
The future purchase option rider allows the insured to buy additional monthly benefits on specific option dates. This is regardless of the insured’s health, as long as the earned income at the time justifies the increase of benefits.
A grace period is the 31 days immediately following the due date of a premium. The policy will continue during the 31 days, but if the premium is not paid by the end of the grace period, all coverage will be terminated.
If premiums are paid by the end of each grace period, no changes can be made to any part of the policy, except the price of the premium. After three years, the premium price can change, but only if the change applies to all policies with the same benefits insuring the same risk class.
The maximum benefit period is the longest length of time benefits are payable as long as the employee remains continuously disabled.
A non-cancelable rider changes a policy and all riders from a guaranteed renewable status to a non-cancelable and guaranteed renewable status. With this rider, the insurer cannot change the policy or its premiums as long as all premiums are paid by the end of each grace period.
An underwriting category in which insured are placed based on their specific customary job duties.
This policy provision or rider pays a specified benefit percentage if the policyholder is unable to perform one or more duties of his own occupation.
A pre-existing condition is a physical or mental condition that existed before the effective date of the insurance coverage. Most policies exclude or reduce benefits for pre-existing conditions.
A premium is the periodic payment required to keep an insurance policy in effect.
The grounds for presumptive total disability, a total and permanent loss because of injury or illness, can be defined as one of the following:
• Loss of speech;
• Loss of hearing in both ears, not restorable by hearing aids;
• Loss of sight in both eyes – this means that both eyes must measure at or below 20/200 after efforts have been made to correct vision;
• Loss of use of both hands;
• Loss of use of both feet;
• Loss of use of one hand and one foot.
This provision protects employees who return to work, but become disabled again from the same or a related cause. If this situation occurs within a certain period of time, the insured is considered still disabled from the original disability and is not subject to a new elimination period. The recurrent disability provision encourages employees to return to work without the fear of losing benefits if the disability continues.
The term regular occupation refers to the insured’s job at the time the disability began.
The rehabilitation benefit is an added benefit for those who join a vocational rehabilitation program approved by the insurer. While still receiving total disability benefits for up to 36 months, the rehabilitation benefit will pay any reasonable costs of the program that are not covered by other plans, policies or programs.
This term means that income from all sources including insurance cannot exceed 100 percent of the insured’s pre-disability earnings.
If the insured is residually disabled, but not totally disabled, the residual disability rider provides a reduced basic monthly benefit.
An additional incentive is usually provided for a period of time to encourage disabled employees to return to work. This is called a return to work provision. The insured can receive up to 100 percent of pre-disability earnings, based on a combination of disability benefits and return-to-work earnings, under this provision.
The survivor benefit is an amount payable to the insured, the insured’s estate, or the insured’s designee if the insured dies while receiving total disability benefits. The survivor benefit is a lump sum payment that provides benefits to the insured’s eligible survivors. This is an optional benefit for most policies.
This rider changes the definition of total disability by allowing the insured to work another job while still totally disabled from the regular occupation.
As long as benefits are being paid out, no further disability premium payments are required from individuals who become disabled and qualify for benefits. The waiver of premium is typically issued after the insured has been continuously disabled for a specified period of time.
We are unbiased independent insurance agents advocating in the best interests of our clients. While most agents are generally selling insurance for one insurance company, we feel it is our duty to our client to do a full review of their needs before going out into the marketplace to find which product fits their personal needs. Given that disability insurance is the hardest type of insurance to obtain, we negotiate with the insurance companies on your behalf to help you receive the best coverage possible in a timely manner. If you would like to receive a quote you can request one on our site, or if you would like to set up an appointment feel free to contact us to set up a conference call or to meet personally.
This is the most important definition when insuring someone in a highly specialized occupation. For example, if a surgeon can no longer perform surgical procedures but can return to work full time as a general practitioner, he still qualifies for full disability benefits under the own-occupation provision.
This provision gives the insured total control over the policy. The insurance company cannot raise rates, reduce benefits, or add exclusions after the policy is in force. This provision also extends the presumptive disability benefit to lifetime.
Policies pay residual benefits whenever income is reduced by 20 percent or more with a loss of time or duties due to disability. For example, if a policyholder earned $100,000 annually, was disabled and then returned to work earning $50,000 annually, she would have a 50 percent loss of earnings, and thus qualify for a 50 percent residual benefit.
The future purchase option rider allows the insured to buy additional monthly benefits on specific option dates. This is regardless of the insured’s health as long as the earned income at the time justifies the increase of benefits.
