We recently had a client who was considering obtaining disability insurance sponsored by the AMA. Below is our AMA disability insurance review summarizing the key differences between the AMA sponsored policy and individual policies. The client found it very helpful so we have reproduced it here for your benefit.
This is an association policy, and is not as comprehensive as an individual disability insurance policy. As you are probably aware the contractual terminology of an insurance contract determines if benefits will be paid so I assume you would like to establish the most comprehensive plan available. Association plans such as the AMA, AAEM, ACEP, etc. are designed to be supplemental to individual coverage. The reasons for this are that the policy provisions can be changed, the policy can be cancelled, and premiums increased by the insurance company at any policy anniversary.
The premium that you quoted was accurate but only for the first year, the second year premium will increase between 25-45% and there are scheduled increases at regular intervals thereafter. The insurance company can change the premiums at any policy anniversary. The individual plans we recommend have guaranteed level premiums to age 67, policy provisions can never change and only you – not the insurance company – can cancel coverage.
Other significant differences are as follows:
- The AMA policy is not specialty specific, if you can work in another area of medicine or occupation benefits will be reduced or eliminated as per the residual benefit. The policies we recommend will pay you the full disability benefit if you are unable to practice Emergency Medicine regardless if you can work in another specialty or occupation.
- To qualify for AMA benefits the elimination period must be continuous and you must not work in any occupation. The individual policies allow part time work in your specialty to qualify for benefits and also provide a provision that allows non-continuous satisfaction of the 90 day waiting period in a period of 180-210 days.
- The AMA policy does not have a presumptive disability benefit (loss of sight, speech, hearing, use of two limbs etc.) The individual policies we recommend will pay such benefits for life.
- With the AMA policy, to qualify for residual benefits you must be totally disabled for the entire elimination period. Again the individual policy allows either total or residual disability to qualify for residual benefits.
- The AMA benefits are paid to age 65 compared to age 70 with individual policies.
- Mental/nervous and substance abuse disabilities are limited to 24 months with the AMA plan. Individual policies do not have this limitation.
- The AMA future purchase option can only be used once within the first 3 years of the effective date and expires at age 40 while with the individual plans the option can be utilized each year up to age 55.
Have any questions about our AMA disability insurance review or would like a complimentary review of your plan? Contact us today.