Step three, studying the availability and affordability of coverage. In step three, we will teach you how to evaluate all your options through a balanced comparison. That is where a spreadsheet analysis comes into play. We display the six most competitive carriers for each residents which contain the four key components, and which have special programs for residents throughout the country. On the left hand column, you will see the key components listed which compares and contrasts the policy features of each carrier. We present our disability analysis, sampling a 30-year-old physician, located in the upper left hand corner. Normally, we present this spreadsheet with the benefits versus the cost so that you are able to maintain and determine which carrier best suits your needs according to your personal budget. Because the majority of premium for each carrier is contingent upon several factors including, gender, age, and specialty and whether discounts apply, we felt it appropriate to leave the monthly premium as To Be Determine.

It is the personalized guidance through this analysis where we witness physicians truly begin to learn and understand their options. Our mission is to educate you, guide you, and empower you, leaving you free to make your own decisions. As we view the analysis in detail, we note the six columns are headed by the top six insurance companies that heavily market to physicians. They are listed alphabetically beginning with Ameritas, Guardian, Mass Mutual, Ohio National, Principal and Standard. As it stands now, these are the top six carriers. That being said, this is a dynamic industry and requires the utmost attention by any advisor, to the changes in the industry and the corresponding updates to the various products. So, please, just regard this as a sample exercise.

We compare each policy feature line by line starting with the true own occupation definition, and moving down to the monthly premium. With respect to the six carriers, each one offers the true own occupation definition of disability. That is the first thing you should look for in a disability policy, the first key component. We would not present a carrier that did not offer the true own occupation definition. It is equally important that the true own occupation definition last for the entire benefit period. In this sample, the Benefit Period, is to age 67, so the true own occupation definition is to age 67. Why do we make this clarification? Because some insurance companies will offer a true own occupation definition but only for a limited number of years, usually two or five, and then that definition switches to a modified or any occupation definition. That is why it is important to always ask to be shown the actual definition in your policy. Otherwise, you may be told it has a true own occupation definition and not realize the definition will change after so many years. Once those years pass, if you are still disabled in your specialty, your benefits, if any, would dramatically change. That is why we specify, the true own occupation definition must be for the entire benefit period.

The second item to look for in your disability policy is the second Key Component, the Non-Cancellable and Guaranteed Renewable feature. You may recall from our education, with this feature you are secure knowing that once you purchase your policy, the benefits will not be changed, the policy will not be canceled or replaced, and the premium will not increase. Only an individual policy offers this feature. The combination of a true own occupation definition and a Non-Cancellable Guaranteed Renewable Feature are what help provide the best coverage. As with the true own occupation definition, all the carriers displayed contain this feature. Moving to the third line of our analysis we review the third key component, the residual benefit. Here we see a slight variation in terms of percentage of loss of income before you become eligible for a claim. The residual benefit only requires that you be partially disabled in your specialty. The percentage of income loss in your policy determines when you are eligible to collect partial benefits. A 15% loss of income due to a partial disability would allow you to apply for 15% of your monthly benefit. A 20% loss requires that you suffer at least 20% loss in your income before you are able to collect 20% of benefit. Ameritas, Guardian, Mass Mutual and Ohio National only require a 15% loss of income before you become eligible to receive benefits. If your monthly benefit was $10,000 per month and you filed a partial disability claim for 15% loss of your income you would receive $1,500 per month. Currently, Principal and Standard require a 20% loss of income to qualify for a Residual Benefit.

As we review each line, we recognize how these carriers may differ and how important that difference is when comparing the benefits versus the cost of each policy. The difference in the Residual Benefit is noteworthy. Common sense dictates, once an illness or injury occurs and affects your ability to work, the sooner you begin receiving financial assistance to help you heal and recover the better for you. Next, we come to the Fourth Key component, the Guaranteed Future Purchase Rider, also referred to as the Future Purchase Option Rider, the Future Increase Rider et cetera. We are referring to these riders as a Guaranteed Future Purchase Rider, but each policy has has its own terminology. It is this fourth key component that allows residents and fellows to begin to strategize how best they are able to protect their income for their entire career. Before we begin to strategize, we need to closely examine these riders and learn how they function in your policy. Ameritas’s Future Increase Option Rider allows you to increase every year until age 55 with no medical questions. The only questions they ask is do you have any other disability insurance and how much is your income? They will ask for proof of income, either a copy of your contract, or pay stub or tax return. Once you qualify, you can increase as much as your income will allow. It does not matter if you have any medical pre-existing conditions that transpired between the time you took your policy out, and the time you become contracted as an attending physician. Guardian, Mass Mutual and Ohio National have riders that work in a similar fashion except that Ohio National allows you to increase to age 60 versus age 55.

Standard and Principal have stricter guidelines. They will extend an offer to increase every three years and ask you to complete an application process which will verify your income status. There is no requirement to answer medical questions. If you submit the application and are approved, you must purchase at least 50% of the benefit or the rider is terminated. If you do not submit the application as requested, the rider is terminated. There are no such restrictions with Ameritas, Guardian, Mass Mutual and Ohio National. The offer to increase is extended every year and you are completely free to apply or not apply. If you do apply and you are approved, it is still your decision as to whether or not you wish to accept the additional coverage. If you choose to wait another year, you are free to do so.