Disability insurance policies vary greatly based on the quality and rating of the insurer, the definitions of disability they offer, the maximum benefit limits available and their premium rates. It is more important than ever for professionals to take the time to compare the contractual provisions of policies they are considering and to understand how and why they differ. There are 3 important factors to consider when evaluating any disability insurance policy: Many other insurance terms and factors can influence which policy is the best fit for your needs and your decision to buy a policy. Consult with a professional insurance adviser or financial planner who specializes in working with physicians or other professionals. They will be familiar with which policies are best suited to the needs of an individual physician or the physician’s practice. If you need assistance in finding a reputable adviser AMA Insurance's Physicians Financial Partners program offers physicians access to vetted financial professionals all across the country. Professionals must pay careful attention to the definition of disability found in their policies because it ultimately determines how any claim for benefits will be judged. There are 3 definitions of disability commonly found in the insurance industry with significant differences between them. A key component of an individual disability income insurance policy is the price (or premium). Premium rates are based on factors such as the insured’s age, gender, monthly benefit, waiting period, optional riders and the insured’s occupational classification. As a general rule, the younger a physician is, the lower the cost. Policies with more specific definitions of disability are more expensive than those offering a broader definition—like a policy with a any occupation definition. In addition, other factors can influence the price of the policy, such as the type of plan being purchased:
Residual disability policy: Adding a residual disability rider to the policy would allow a disabled person to continue receiving benefits proportionate to the loss of income if they returned to their occupation on a part-time basis. Generally, to qualify for residual disability benefits, one must experience an income loss of 20% or more as compared to pre-disability earnings. Additionally, if the loss of earnings is greater than 75% or 80%, depending upon the rider’s provisions, 100% of the monthly disability benefit might be paid.
Related AMA Resources Disability insurance and other policies for physicians and their families AMA Insurance Agency, Inc. Thriving in Residency |