What is Disability Insurance?
The Definition of Disability Insurance
The definition of disability in a policy should be crystal clear. The definition of disability dictates the path of a claim and ultimately determines how any claim will be processed, adjudicated and paid. When specific wording applies to your specialty as a physician, you want little room for interpretation.
THERE ARE FOUR KEY COMPONENTS YOU MUST LOOK FOR WHEN DEFINING DISABILITY INSURANCE.
KEY COMPONENT ONE: TRUE “OWN OCCUPATION COVERAGE” DEFINITION
The most favorable disability insurance definition available is regarded as “true own occupation coverage” and is defined as: “You will be considered totally disabled if you are unable to perform the material and substantial duties of your regular occupation.” With this definition if because of a sickness or injury you cannot perform the duties of your occupation, you will be able to receive full monthly benefits even if you are able to work in another occupation and receive a full salary.
If because of a sickness or injury you cannot perform the duties of your occupation, you will be considered totally disabled, therefore receiving full benefits even if you choose to work in another occupation.
The value of this policy to a physician that is specialized is that it covers the physician for that particular specialty. A physician would receive full benefits if he or she could no longer perform the duties of that specialty but could work in another occupation or medical specialty.
Learn How To Determine If your Policy Has True Own Occupation Coverage.
Many varied definitions of disability insurance exist that can be referred to as modified own occupation definitions. Only a true own occupation definition will allow you to receive your total monthly benefit while working and receiving a full salary. Do not settle for less when you deserve more.
KEY COMPONENT TWO: NON-CANCELLABLE, GUARANTEED RENEWABLE
Guaranteed Renewable – This provision precludes the insurance company from canceling the policy or making any changes in the provisions of the policy. This protects you should the risk of you becoming disabled increases for any reason.
Non-Cancellable – A Non-Cancellable Policy is a policy
specifying that, as long as you pay your premiums on time, the insurer cannot raise your premium and cannot cancel your policy. Without this protective feature an insurer would be likely to raise premium rates over time or cancel the policy if a claim was ensued.
When the term “Non-Cancellable” is added to “Guaranteed Renewable”, the insurance company cannot change any policy provisions, cannot cancel the policy on you and it cannot increase the premiums. These combined features (as they are often presented) are paramount for a superior individual disability product.
With an endorsed deeply discounted product the savings can be considered insurmountable over time since the premium rate is locked in for the duration of the policy. A young resident physician truly benefits since premium rates increase with age.
Always look for “True Own Occupation Coverage” so you can be considered totally disabled, and receive full benefits even if you choose to work in another occupation.
KEY COMPONENT THREE: RESIDUAL BENEFIT
This is a “must-have” policy feature and will allow you to receive partial benefits while working part-time in your specialty. A medical diagnosis will not necessarily or immediately classify you as 100% disabled. You’ll need the partial benefit to offset the partial loss of income in your specialty. This feature is ideal for doctors who want to continue to work in their specialty part-time.
KEY COMPONENT FOUR: FUTURE INSURABILITY RIDER
This feature locks in your insurability for the future. It allows you to take advantage of your current health status today and lock in the guaranteed right to increased coverage regardless of your health in the future.