Definition of disability: The inability to perform the material and substantial duties of ANY occupation for which you are suited by training, education, or experience. This includes the ability to pick up a phone, so as you can imagine, this is one of the broader definitions of disability.
Length of time that the disability carrier will provide you protection. This is also the length of time that you could be on disability claim for and receive your monthly benefit. Most times, we set up our policies with a benefit period to age 65. Meaning you will have protection until age 65 and if you were to go on claim and continue to be unable to preform your occupation, you will get your monthly benefit until age 65.
Another word for saying, Insurance Company. Given that we are independent, we work with all of the major carriers for each of the insurance products we help with. On the life insurance side, we have access to hundreds of carriers. Based on your needs and particular situation, we will help match you with the right carrier for you.
On the disability side, there are ONLY 6 carriers that offer the true double dip own occupation definition of disability.
If you have heard of a carrier and they are not listed, it’s because they only offer a variation of that definition of disability we look for.
If you experience a disability/injury that results in time away from work or loss of income, you will want to file a claim with the disability carrier. We are not allowed to be a part of the claims process, but we will help you get the process started and update you along the way. You should file your claim as soon as possible to start the elimination period.
Cost of Living Adjustment (COLA)
The COLA feature allows your monthly benefit to keep up with inflation while you are on disability claim. There are varying levels of COLA (3%, 0-3%, 0-6%, 2-6%). At a minimum, we typically add on 3% COLA to every disability policy. This means, once you go on claim … your disability benefit will increase 3% per year to keep up with inflation (allowing you to buy the same amount of “stuff” with your disability benefit as things around you get more expensive due to inflation).
Definition of Disability
One of the most important aspects of a disability policy, the definition of disability is what determines if you are “disabled” under the contract and if you are eligible to receive the monthly disability benefit. There are several definitions of disability out there; True Own Occupation, Own Occupation, Modified Own Occupation, Transitional Occupation, Regular Occupation, Total Disability, Catastrophic Disability, etc.
As a physician, there is only one definition of disability you should be looking at - True Double Dip Own Occupation. This is the strictest definition of disability for physicians offered by ONLY 6 carriers. The definition goes beyond your specialty and protects your daily duties at the time of disability, regardless of if you are able to do something else.
While typically this is an unwritten rule of what you don’t do at social gatherings involving chips and dip, Double Dip is an important part of the definition of disability that allows you to earn an income while on disability claim. For example, if you could no longer perform your daily duties … but you wanted to re-train for another specialty or work in another occupation altogether - any income you earn will NOT offset the monthly disability benefit you are receiving.
Said another way - if you choose to do something else, you are NOT penalized by the disability insurance company for earning other income.
After we apply and go through the underwriting process, carriers will come back with their offer. Most times, the only changes from what we apply for are exclusions. Exclusions are a specific body part or circumstance in which the disability carrier would NOT pay out a disability benefit for.
For example; 3 years ago, I broke my elbow and had to have surgery with plates and screws. When I apply for disability insurance, I may get approved for coverage - but with a left elbow exclusion. This means that the disability carrier will cover any and all disabilities, except those arising from my left elbow. Most time carriers will also allow a reconsideration period. Meaning in 3 years, if no further issues arise from my left elbow … I can apply to get the exclusion removed from my policy.
A common misconception with disability exclusions is that they will not cover my left elbow in any circumstance (from the previous example). What if I was in a car accident? Would my left elbow just not be covered? The answer is likely yes, my elbow will be covered. The exclusion is only placed on my left elbow from problems that are related to when I originally broke my elbow. If I was unfortunately in a car accident and it would have broken anyone else’ elbow, I would be covered.
Future Purchase Option
This rider has a couple of names depending on your disability carrier, but it refers to the ability to increase your disability monthly benefit in the future with NO medical questions asked. This is pretty powerful because it gives you the ability to lock your health when you are younger and increase in the future regardless of if you have had a change in health.
Insurance carriers can only insure you to a certain amount based on your income. Most disability carriers will allow you to increase your disability benefit up to $20,000/month (tax free).
At Twin Oak, we will follow up with you and help increase your policy when the time comes. The most popular time to increase your disability policy is when you go from training to officially out in practice - to protect that new income.
Every disability policy that we look for is guaranteed renewable - meaning that the insurance carrier can never cancel the policy or change the terms of the contact as long as you continue to pay your premiums (cost).
Lock Current Rates for Future Purchase
If at the time you pick up disability coverage, your policy has a discount attached to it (like a training discount 20-30%) … when you go to increase coverage after training, the insurance carrier will add your discount to the additional coverage you pick up in the future.
Mental Nervous Benefit
A clause of the disability policy that will provide a disability benefit based on a mental nervous and substance abuse claim. These are claims based on depression, anxiety, bipolar, substance abuse etc.
Most carriers will only cover mental nervous claims for 24 months before you have to be hospitalized in order to continue to receive benefits. A few carriers will cover mental nervous claims for up to entire benefit period. If this item is particularly important to you, please let your risk management specialist know and we will point those carriers out to you.
Modified Own Occupation
The inability to perform the material and substantial duties of YOUR occupation at the time of disability, and not working in another occupation. If you do choose to work in another occupation, your disability benefit is offset by your new income.
A main driver for the cost of the disability coverage. Depending on your specialty when you originally apply for coverage, you will be placed in an occupation class with that carrier to help determine price. This is why carrier A might be so much cheaper than carrier B for essentially the same coverage. Each carrier has their own way to sort occupation classes and specialties.
It is important to remember, if you pick up coverage as a internal medicine resident - the price for your occupation class will be relatively cheap. If you continue to specialize and become a Cardio EP physician, your daily duties will change as will the definition of disability for your policy … but your occupation class will be the same based on when you originally picked up coverage.
Said another way - to use our previous example, lets call the Internal medicine resident who kept specializing and call them Person A. If person B waited to pick up coverage until their Cardio EP fellowship, they would have the same protection as Person A. However, since the occupation class of Cardio EP is more expensive than Internal Medicine, person B will be paying more than person A for the exact same coverage.
Another of the many reasons why we suggest picking up coverage as a PGY1 … and also most times the answer to the question - why does my colleague pay less?
Partial (Residual) Disability
3/4 claims are considered a partial disability claims, meaning you can still do most of your daily duties but are limited in terms of workload (think back injury or severe migraines). If something occurs that results in a partial loss of income due to a disability, you will qualify for the same percentage of disability benefit - 50% loss of income = 50% of your disability benefit.
An important differentiation between most employer or association policies and the 6 carriers we look at … is that a qualify residual benefit does not require that you are totally disabled for the entire elimination period before qualifying for a partial claim. Most Employer or association policies require that you are first totally disabled for 90-180 days, THEN can qualify for a partial claim. Pretty big difference.
The amount of money that you have to pay for your insurance policy. You can either pay this monthly, quarterly or annually. The less frequent the payments, the cheaper the cost (only slightly though).
Price Per $1,000
When looking at the comparison, it is sometimes easier to use the cost per $1000 to compare companies if companies are offering varying benefit amounts. Price per $1,000 means the cost per month per $1,000 of disability benefit.
Most of the time, this happens if a practicing physician is looking to pick up coverage. The amount you qualify for is based on your income, employer coverage and private coverage you might already have in place. Each carrier will offer roughly the same amount, but they might vary slightly in benefit amount. Using the cost per $1,000 allows you to compare companies evenly, regardless of benefit amount offered.
If you are still in training, this section might not matter much to you. While in training, all 6 carriers will offer the same $5,000/month of benefit, so there isn’t a big need to compare based on price per $1000.
Often tied with the residual benefit rider, the recovery benefit rider continues to pay you a benefit once you go back to work due to a continued loss of income until you are 100%. Often times, when someone goes on disability claim, they are eventually able to come back to work but in a limited capacity. Once you come back to work, the recovery benefit will allow you to continue to receive a portion of your monthly disability benefit for the continued loss of income by not being 100%.
An added feature to your disability policy that enhances your protection. A few of the riders are automatically included in your disability policy, and others we add on. All of the riders that you see on your comparison summary and on the disability page are included in the cost.
The inability to perform the material and substantial duties of YOUR occupation at the time of disability, regardless if you choose to work in a broader specialty or different occupation. Your new income plus your disability benefit may not exceed your pre-disability income. If your income plus disability benefits exceed or match your pre-disability income, your disability benefit will be reduced.
Non-obligation application that enables you to obtain a formal offer from the carrier that’s best for you. This offer is based off the quotes provided to you by your agent. You have no commitment on your end when applying. You may only apply with one carrier at a time.
Your agent will provide you with an encrypted form that will contain the key pieces of information necessary to pre-fill a Trial Application.
True Double Dip Own Occupation
The strictest definition of disability for physicians and the definition you should be looking for. The definition of “True Double Dip Own Occupation” disability is - the inability to perform the material and substantial duties of YOUR occupation at the time of disability, regardless if you choose to work in a broader specialty or different occupation. The double dip portion refers to the ability to earn an income while on disability claim.
Given that this is a pretty big topic and one of the most important aspects of disability policy - we wrote a blog about it! check it out here.
Once you choose which carrier is best for you and sign your application, you will move on to the Underwriting Process. Depending on what you are applying for … life insurance, disability insurance or long-term care, the process is slightly different.
Generally you will have to complete:
Tele-interview that should only take 20-30 minutes regarding your medical history.
Labs - we will schedule a 3rd party to meet you at your house or at work to get this completed (no cost on your end).
depending on disability benefit being applied for, you may not have to complete labs.
We will help you through the entire process and give you the numbers to call on your own time. At Twin Oak, we are with you every step of the process.
We typically get a couple questions regarding the process, so we wrote a blog about it! Check it out here.
Waiting Period (Elimination Period)
The amount of time with a loss of income due to a disability that must pass in order to start receiving your monthly benefit. Options include: 60 day, 90, 180 or 360 day elimination period.
Considering cost and risk – a 90-day elimination period is the sweet spot. Anything shorter than 90 days, you can reasonably self-insure by building up an emergency reserve, so no need to pay an insurance company for that. Anything longer, you would have to at least double your emergency reserve making the additional risk not worth the slightly cheaper price for a longer elimination period.