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After college, medical school, and residency, earning a physician’s salary is a welcome reward for the amount of education and training you’ve put in.

But would you be able to live the lifestyle you want if you weren’t able to earn your physician’s income anymore?

Disability insurance is one of the best ways to protect your financial interests. With a comprehensive disability insurance policy, you can collect a portion of your income even if you are ill or injured and cannot work.

Physicians should know the importance and value of having disability insurance. But having it isn’t enough — you need to have a policy with the right provider.

As part of our ongoing series of disability insurance provider reviews, today we’re taking an in-depth look into AMA disability insurance.

If you’re shopping around for disability insurance, read this review before you decide to buy disability insurance through AMA.

Table of Contents

1. Who is AMA?
2. Disability Insurance Through the AMA
3. Definition of Disability
4. Disability Insurance Premiums
5. Elimination Period
6. Built-In Benefits
7. Optional Riders
8. Is AMA Disability Insurance a Good Choice for Physicians?


Who is AMA?

The American Medical Association has been in existence since 1847. This professional association has both doctors and medical students as members and focuses on improving the overall medical system in America.

Its primary goals are to provide standards for medical education and medical ethics. It also promotes scientific advancement and works to improve public health policy.

In the 1950s, approximately 75% of practicing physicians in the U.S. were members of the AMA. In recent years, that number has dropped significantly. Now, less than 25% of American physicians pay membership dues to the organization.

Yet the AMA still provides a variety of benefits to its physician members. It also offers benefits to physicians who aren’t members, such as the option to take out a disability insurance policy.

Related: Provider Reviews: AMA Life Insurance Review


Disability Insurance Through the AMA

The AMA offers physicians a disability insurance product called DisabilityPro Physician Disability Insurance. This policy is available to all full-time physicians under the age of 60, and it is underwritten by the New York Life Insurance Company.

DisabilityPro offers coverage and benefits up to $15,000 per month, which means that a physician earning $25,000 per month can obtain enough benefits to cover 60% of their monthly income. This is on par with the industry standard, as most disability insurance policies offer maximum benefits of 60% of your annual salary.

But there is one main distinction that makes AMA’s DisabilityPro less desirable than other disability insurances policies:

AMA insurance is not a true specialty-specific insurance policy. Rather, DisabilityPro is a group policy.

There are pros and cons to every insurance policy, and group policies are no exception.

With a group policy, your monthly premiums will be lower because you’ll share a plan with a large pool of policyholders. Large groups have more buying power, so the rates are lower than if you were to take an individual policy for yourself.

But there is a tradeoff for getting those lower rates:

The AMA policy doesn’t allow you to make any changes. You and everyone else in the policyholder pool receive the same benefits.

The bottom line is that individual policies are flexible. Group policies are not.

Related: How to File a Disability Insurance Claim for Physicians


Definition of Disability

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All disability insurance policies include a variety of terms, clauses, and complex legal provisions. And one of the most important aspects of any policy is how the insurance provider defines disability.

The definition of disability set forth by your carrier determines when and under what circumstances you are actually able to collect benefits. There are three main definitions of disability that insurance companies use.

Own-Occupation, Not Working

The own-occupation, not working definition requires that you are unable to work in your current position and choose not to work in another job. You must be eligible to work in another role, yet decide not to.

Any Occupation

The any-occupation definition of disability is the broadest and the most difficult to qualify for. Under this definition, you must be ill or disabled in such a severe manner that you are unable to work in any occupation.

Here’s why it’s important to understand this:

Let’s say you’re a surgeon with slight nerve damage in your hand. You would not be able to perform surgery with this condition, but you would be able to work in a variety of other capacities that don’t require the precision of a surgeon.

A surgeon with this definition in their policy would not be able to collect benefits, because there are still dozens of other jobs that they could do.

The AMA DisabilityPro policy requires that you meet the any-occupation definition and be totally disabled to collect benefits.

Their definition of “totally disabled” is as follows:

“…you are unable to perform the material and substantial duties of your medical specialty as a result of a covered illness, injury, or organ donation, and are not gainfully employed in an alternate, comparable occupation.”

At Physicians Thrive, we recommend that physicians always have a disability insurance policy with the true own-occupation definition. Without it, it can be nearly impossible to collect the benefits you deserve.

True Own-Occupation

Under this definition, you will be able to collect benefits if you are not able to perform all of or part of your duties in your medical specialty. This is the most flexible definition, and the easiest one to meet.

You have a much higher chance of collecting benefits under the true own-occupation definition than under any of the other definitions.

Additional reading: Hidden “Own-Occupation” Traps in Physician Disability Insurance.


Disability Insurance Premiums

The main reason AMA disability insurance is so enticing is that it is one of the most affordable policies available. Despite its low monthly premiums, it lacks many of the features of other policies. That lack of additional coverage could end up costing you a lot more money in the long run.

Insurance premiums vary upon several factors, including your age, gender, specialty, current health status, and the state in which you live and work. They also fluctuate depending on how much coverage you need (the more you need, the more you’ll pay).

Depending on your age, state, and other factors, the monthly insurance premium is usually between 2% and 6% of your monthly income.

Unlike the AMA, many insurance providers offer fixed rates. With AMA DisabilityPro, your rates will increase as you age. You cannot lock in rates, and insurance premiums are subject to change at any time.

AMA does make its policy a bit more appealing by offering big discounts, especially to AMA members. AMA members can enjoy a 35% discount off their first year of premiums. Physicians that aren’t members can enjoy 15% off.


Elimination Period

All disability insurance policies allow you to choose an elimination period. This is the waiting period between the date when you become ill or injured, and the date you are eligible to collect benefits.

The AMA DisabilityPro policy allows you to choose an elimination period between 60 and 365 days. Other insurance providers offer elimination periods as short as 30 days, and as long as 720 days.

The shorter the period you choose, the more expensive your monthly insurance premium will be. This is standard across the industry. If you want to start collecting benefits soon after your injury, you’ll need to pay more each month. Choosing a longer period will reduce your monthly premiums, but you’ll have to wait longer to collect benefits.

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Built-In Benefits

Almost all disability insurance policies include built-in benefits. Here are a few of the built-in benefits that you can expect to see in an AMA disability insurance policy.

The Student Loan Repayment Benefit

If you become disabled before the age of 45, AMA will give up to $200,000 to pay off your medical school loan debt.

This may sound like a great perk, but once you hit the age of 46, this AMA benefit is off the table.

Other insurance companies allow you to increase your coverage with a Student Loan Repayment rider. With such a rider added to your policy, your insurance company will pay off your medical school loan debt regardless of the age at which you become disabled.

Residual Benefit for Part-Time Work

AMA offers a residual benefit for part-time work. This means that if you transition your full-time career to a part-time job, you will be able to collect a portion of your benefits.

Most insurance companies offer a version of this benefit (and also make it easier to become eligible). To collect this benefit under AMA, you have to be transitioning to a new career that reduces your income by at least 20%.

Waiver of Premium Benefit

This built-in benefit is standard among all disability insurance providers. With this benefit, you will not have to pay monthly insurance premiums while you are collecting benefits.

Get More Built-In Benefits With The Big Six

Like all of the major disability insurance providers, AMA policies include some built-in benefits. But AMA policies provide much less coverage than the more preferred insurance providers, often referred to as the Big Six.

The Big Six insurance companies are:

The built-in benefits offered by these six providers are much more significant than what AMA has to offer. And the reason they’re called the Big Six is that they are the only providers that offer the true own-occupation definition of disability.

Without the true own-occupation definition, your chances of ever being able to collect your benefits are slim to none.

The Big Six policies include a wide variety of built-in benefits, and while the AMA DisabilityPro offers a few of their own, they are much more limited in terms of scope and eligibility.

Learn more about one of the Big Six by reading Provider Reviews: Guardian Long-Term Disability Insurance.


Optional Riders

All insurance companies allow policyholders the chance to add optional riders to their plans. These riders will add to your monthly insurance premiums, but make your plan more robust and more comprehensive.

AMA DisabilityPro offers a limited amount of riders, though it does offer some of the most important ones:

COLA

With an AMA plan, you can add the Cost of Living Adjustment Rider to your insurance plan by increasing your monthly premium by 15%. If you add this rider, it will negate the 15% discount they give you in your first year as a policyholder.

This benefit is essential, as it increases your monthly payout based upon the Consumer Price Index. In other words, as inflation rises, your monthly benefits will grow with it. This is a common, and important, rider that all providers offer and that most physicians add.

Catastrophic Disability Rider

In the event that you are unable to do basic functions, such as eating, bathing, dressing, or using the toilet, AMA will increase your monthly benefit by 30%. All insurance providers offer this benefit either as a built-in feature or as an optional rider.

With an AMA policy, this rider will add 10% more to your monthly insurance premium.

Future Benefit Increase Option

The Future Benefit Increase Option, also referred to as the FIO, is one of the most important riders you can add to a policy.

With this rider, you have the option to increase future benefits without having to undergo additional medical exams. All insurance providers offer some version of this, but the AMA only allows you to take advantage of this within the first three years of signing your policy or until you turn age 40, whichever comes first.

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Family Care Benefit

Should you need to leave your job to take care of a spouse, child, or parent, the family care benefit offers income protection for those difficult times.

To qualify for this benefit under DisabilityPro, your family member must have a “serious health condition.” To meet the standard for “serious health condition,” your loved one must be unable to perform daily living activities, require significant amounts of supervision, or be terminally ill.

Related: The Cola Rider, AIB Rider, and FIO: Differences and Similarities in Disability Riders


Is AMA Disability Insurance a Good Choice for Physicians?

At Physicians Thrive, we do not recommend AMA disability insurance to our physicians. The AMA plan may be affordable, but the requirements for eligibility are so difficult to meet that when a disability occurs, most physicians with this policy find that they are unable to collect.

Here are the biggest cons with the AMA policy:

You Cannot Lock in Rates

Because this is a group policy, rates are subject to change. Premiums can increase at any time.

Any-Occupation Definition

The true own-occupation is the preferred definition for physicians. The AMA’s Any-Occupation definition makes it extremely difficult to qualify to receive any benefits at all.

Lack of Flexibility

AMA DisabilityPro is a group plan. You cannot make individual changes to the plan, and all physicians on the plan must abide by the same clauses, terms, and restrictions.

Limits on the Future Purchase Option

As your salary increases over the years, you’ll most likely want to increase your coverage amount. AMA only allows you to do this once. You can do so within the first three years of having a policy or when you hit age 40, whichever comes first.

This is a considerable drawback for young physicians who may want to increase their coverage when their salaries increase in their 40s and 50s.

Related: Your Full Guide to Disability Insurance for Physicians


We do not recommend AMA disability insurance for physicians. It’s full of restrictions, and it does not offer the true own-occupation definition of disability.

Physicians looking for a comprehensive disability insurance policy should stick with one of the Big Six providers. The Big Six all offer much more flexibility and allow you to customize a plan that’s unique to you.

The bottom line is this:

The whole point of paying monthly insurance premiums for disability insurance is to be able to collect those benefits if you become too ill to work in your current job. And the way to ensure that is to take out a policy with the true own-occupation definition of disability.

Ready to find the disability insurance provider that’s right for you?

Contact Physicians Thrive now for more information and advice on finding a customizable and comprehensive disability insurance plan that works for you.

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