Why is the definition of total disability so important?

The definition of total disability is used to determine whether or not you qualify for total disability benefits. With an own-occupation policy, you will be considered totally disabled if you are unable to perform the material or substantial duties of your occupation. Some policies will deem your occupation to be your medical or dental specialty.

Can my policy be cancelled by the insurance company?

This is an area where you need to take control of your disability insurance policy. Insist on a non-cancellable, guaranteed renewable policy. That means the policy cannot be cancelled or changed by the insurance company prior to age 65 or 67. The premium rate is also guaranteed to remain the same until this age. As long as you pay the premium on time, only you have the right to cancel the policy.

How much individual disability insurance can I get?

Every disability insurance company has their own chart, called “Issue & Participation Limits.” The chart lists the amount of insurance the company will allow based on different income levels. Contrary to popular belief, individual insurance companies do not typically issue flat percentages of income, such as 60%, to all income levels. Generally, the higher your income, the lower the percentage of income covered.

If I already have a policy I want to keep, how much coverage can I get?

The “Issue & Participation” chart will determine the amount of coverage an insurance company will allow, based on your income. If you decide to keep your existing policy, the company will simply subtract the amount of the existing policy, and will issue a new policy for the remaining amount allowed.

If I get disabled, when will my benefits begin?

Your policy will have an elimination period which is the number of days at the beginning of a disability that you will not be covered. The most common elimination period among physician and dentist policies is 90 days.

Am I covered for partial disability?

With a “residual disability provision,” the policy pays if you are partially disabled. Some policies include residual disability as a built-in benefit, while others offer it as an optional rider. Residual disability coverage should be included in every physician and dentist policy.

What is the Recovery Benefit?

If you continue to suffer a loss of income resulting from your disability even after you return to work full-time, many policies will pay a monthly benefit. For example, consider that you have been out of work on disability for a year. You return to your practice but may not have a full work load right away. It may take time to rebuild your work load and return your income to its pre-disability level. The Recovery Benefit pays during that time. Some policies pay until you have reached 80% of your pre-disability income. Others only pay for a limited time, such as one or three years.

How does the Cost of Living Rider work?

The COLA rider annually increases your monthly benefit on the anniversary of your claim. If you become long-term disabled, inflation will reduce the buying power of your monthly benefit. The COLA rider is your only means of increasing your monthly benefit while disabled. The increase may be tied to increases in the CPI-U, with a stated maximum, or it may be a guaranteed increase. Most leading physician and dentist policies currently offer a choice of 3% and 6% riders.

Do I need the Guaranteed Insurability Rider?

The younger you are, the more you need a Guaranteed Insurability Rider on your policy. This rider allows you to increase your monthly benefit in the future, regardless of your health, as long as you qualify based on your income.

Are there any limitations for disabilities caused by Mental & Nervous and Alcohol & Substance Abuse (M&N) conditions?

Most polices offered today will limit payments for M&N disabilities to 24 months during your lifetime. There are a few policies offered today that cover M&N conditions the same as any other disability. It’s important to know which ones they are.