Disability Insurance Definitions & FAQs
Understand your disability insurance policy and the optional features before you buy.
The Monthly Benefit is the monthly income protection you would receive in the case you became sick or injured, and ultimately unable to work. This amount is adjustable but is based on your gross income. You are only eligible to insure approximately 60% of gross income through all disability insurance sources, however, there are some exceptions to this rule when you are graduating from training.
The Benefit Period is how long your income can be replaced in the event of a long term disability.
|5 Year Benefit|
|10 Year Benefit|
|To Age 65|
|To Age 67|
|To Age 70|
This is the longest period of time that base monthly benefits or rider benefits will be paid for one total disability caused by the same or related injury or sickness.
The maximum length of time we will pay monthly benefits for a disability.
The maximum period of time we will pay disability benefits for any one disability.
The benefit period is the longest period of time for which we will pay benefits for a continuous disability.
Means the maximum length of time we will pay you a base monthly benefit as long as you are totally disabled.
Starts after the satisfaction of the elimination period and is the longest time for which benefits will be paid for any one continuous disability.
The Elimination Period is how long you have to wait after filing your claim for your income replacement to occur.
This is the period of time you must be totally disabled before base monthly benefits begin.
This is the period immediately following the start of disability during which benefits do not accrue.
Means a period, measured from the first day of your disability throughout which you must be disabled before benefits become payable.
This is the number of days that must elapse before benefits become payable. You must be disabled for the entire period.
This is the period of time you must be totally disabled before we start paying benefits. Benefits will not accrue or be payable during the elimination period.
This is the number of days of disability from the start of a continuous disability for which no benefits will be paid.
This is arguably the most important feature for physicians to include in a disability insurance policy. The own occupation definition of disability allows you to be covered for exactly what you are doing in your employment position. If for some reason you are unable to perform your job at full capacity but are still able to work part-time, you will receive compensation for lost wages due to the injury or illness even if you are making up that lost income by picking up another job.
Your regular occupation is the occupation(s) in which you are regularly engaged on the date of disability. If your regular occupation on the date of disability is limited to a professionally-recognized specialty in medicine, dentistry or law within the scope of your degree or license, we will deem that specialty to be your regular occupation. If you are unemployed, retired, or otherwise not working on the date of disability, your regular occupation means any occupation you are able to do based on your education, training and experience.
Provides benefits for a condition caused by a sickness or injury in which you cannot perform the main duties of your occupation and are working in another occupation. You must be under a doctor’s care and the disability must begin while this rider is in force. If the extended partial disability benefits rider is attached to the policy, monthly benefit payments under the own occupation rider will be in lieu of any monthly benefit under the extended partial disability benefits rider equal to the monthly benefit for the own occupation rider. We will evaluate eligibility for monthly benefits under the extended partial disability benefits rider for the amount, if any, that exceeds the monthly benefit of the own occupation rider.
Receive full disability benefits if you can’t perform the substantial and material duties of your regular occupation, even if you work and earn money in another occupation.
You will be totally disabled if, solely due to injury or sickness, you are unable to perform the material and substantial duties of your occupation. As long as you are totally disabled, benefits will not be reduced even if you are working in another occupation. You will also be considered totally disabled if you are an MD or DO and more than 50% of your income is from:
Performing surgical procedures and, solely because of injury or illness, you can no longer perform surgical procedures – or- performing hands-on patient care and, solely because of injury or illness, you can no longer perform hands-on patient care.
Your occupation means the occupation or occupations that you were engaged in, based on the duties you were performing for wage or profit, at the time disability began. If you are not employed at the time of disability, your occupation means a reasonable occupation you are able to perform based on your education, training and experience. If you are a physician or dentist and have limited your duties to the performance of the usual and customary functions of a specific, professionally recognized medical or dental specialty, we will consider that specialty your occupation.
Regular Occupation Rider
If you become totally disabled from your regular occupation and choose to work in another occupation, you receive full benefits, regardless of the income you earn from the other occupation.
Transitional Occupation Rider
You will continue to receive disability benefits if you become totally disabled in your occupation, but are working in another occupation. Benefits will be paid up to 100% of your prior earnings, but will not exceed the total monthly benefit. Benefits are payable until the end of the transitional occupation period to age 65. If your policy has both the residual disability and recovery benefit rider and the transitional occupation rider, benefits will not be paid out under both riders at the same time. If you meet the definitions and terms of both riders, your monthly benefit will be the great of either Residual or transitional occupation benefit.
Partial Disability Insurance
Partial Disability Insurance (also called residual disability insurance) is used in the case you become unable to perform your job at full physical capacity but are able to work part-time. You will receive compensation for lost wages due to the injury or illness keeping you from working full-time. This is not an editable item but some insurance companies have a lower threshold than others. The lower the threshold the more beneficial this rider to you, because you have to lose less income before you start to see it being replaced.
|15% Loss of Income|
|20% Loss of Income|
For the first six months of disability, if you have a sickness or injury that limits your time or duties, you will receive benefits in proportion to your loss of earnings. The benefit you receive will be equal to the base monthly benefit amount for total disability, times the percentage of your loss of earnings after the date of residual disability. After the first six months, you must also show that you have a loss of earnings of at least 15% because of that residual disability. If this percentage is greater than 75%, full total disability benefits will be paid. The minimum benefit for the first six months of residual disability is 50% of the total disability benefit. You do not need to be totally disabled first to receive residual benefits.
This benefit will continue for your maximum benefit period as long as you remain residually disabled.
We will increase your monthly earnings before disability each year you remain disabled by the percentage increase in the consumer price index-urban dwellers (CPI-U). At no time may we reduce your adjusted monthly earnings before disability if the CPI-U is negative.
This rider provides a benefit if you are working and you suffer a minimum 15% loss of income resulting from a reduced capacity to perform your occupation due to sickness or injury. In addition, during the first 6 months of disability, you may also qualify as partially disabled if due to sickness or injury, you suffer a 15% loss of time from work or you can do some, but not all, of the main duties of your occupation.
During the first 6 months of partial disability, we will pay the total disability benefit for any portion of the 6 month period that is not used to satisfy the waiting period and during which, due to sickness or injury, you are working less than 20% of the time worked just prior to the start of disability.
Otherwise, for the first 12 months of partial disability benefits, any monthly payment for partial disability will never be less than 50% of the extended partial disability monthly benefit. If your income loss is more than 50% of the extended partial disability monthly benefit, the monthly payment will be the actual loss of income up to the extended partial disability monthly benefit. If the income loss is more than 75%, the monthly payment will be the total disability monthly benefit. Beginning in the 13th month of partial disability benefits, monthly payments will be based on your loss of income.
Enhanced Residual Disability Benefit Qualify as residually disabled while working in your regular occupation or another occupation if, during the benefit waiting period, you have a loss of income or duties or time due to injury or sickness. After the benefit waiting period, you’ll be eligible for residual disability benefits if you’re still working but you have a loss of income. This rider pays at least 50 percent of your basic monthly benefit for the first 12 months. After that, the benefit is proportional to your loss of income.
This option provides partial disability benefits when you are not totally disabled but, solely due to injury or sickness, you suffer a loss of income of 15% or more while working.
We will pay you a residual benefit while you are residually disabled if you suffer a loss of at least 15% of your net earned income, and you are able to perform one or more, but not all, of the material and substantial duties of your occupation or you are unable to engage in your occupation for more than 80% of the time as was usual prior to the start of your disability.
You are considered residually disabled and receive a benefit proportionate to your loss if you.
• Lose at least 20% of your prior earnings due solely to an injury or sickness and
• Are able to perform some, but not all, of the substantial and material duties or
• Are unable to work full time in your occupation or
• Working in another occupation
Future Increase Option
Future Increase Options allow you to increase your monthly insurance coverage as your income increases without going through additional medical underwriting. This feature is probably the second most important when making a decision on coverage.
More Flexible: These paid options allow you to specify the amount of increase you put on the policy and are able to use it in the future. Specifying this benefit amount means you are eligible to increase coverage any year of your policy (some exceptions apply). Additionally, there is no mandatory paperwork and it requires less work to uphold this feature as a part of your policy. Some examples are Future Increase Option and GPI.
|Guaranteed Insurance Option (GIO)|
|Future Increase Option (FIO)|
Less Flexible: These free options allow you to increase coverage later on without doing additional medical underwriting. However, you can only increase with these features 1-time per every 3-year window. If you have not submitted paperwork to increase by the 3rd year of a 3-year window, you will be required to in order to keep this feature on the policy for another 3 years. The amount of increase available is based on the current maximum policy benefit.
|Benefit Purchase Rider (BPR)|
|Benefit Update (BU)|
|Benefit Increase Rider (BIR)|
Guarantee of Physical Insurability
You may purchase additional amounts of base monthly benefits on each policy anniversary without proof of medical insurability. The minimum amount of GPI purchase is $100. The maximum of each increase is one half of your original base monthly benefit. The GPI Rider ends at your age 60 or when you have exercised the maximum total amount of increase above.
Special Increase Amount:
While this rider is in force, you may request a special increase amount if either of the following applies:
(a) You are no longer eligible to participate in your employer’s group long term disability insurance plan because of a change in employment or your employer discontinues or reduces your group long term disability insurance and you are working and you are not eligible for group long term disability insurance in the next 24 months. You must apply for the special increase amount within 90 days of losing your group long term disability insurance; or
(b) You have at least a 50% increase in earnings since your last potential increase date. The increase in earnings must be permanent and sustainable. If the increase in earnings is the result of a one-time bonus, commission, or extraordinary financial event, you will not qualify for a special increase amount.
You may not have a special increase amount that will give you more than our maximum disability income issue and participation limit in effect as of the date you apply for the special increase amount.
Future Increase Option
This rider provides the opportunity to apply for additional benefits from time to time without proof of good health other than proof that you are actively at work and are not disabled. Increased coverage may be applied for during each option period. The last option must be exercised on or before your 60th birthday. Increases are postponed during a period of disability.
Future insurability option rider will increase the total disability monthly benefit, and increase the coverage provided by the cost of living adjustment rider, extended partial disability benefits rider, social insurance rider, short term disability benefit rider, and own occupation rider if any of those riders are in force.
Benefit Increase Rider
Income increase options ensure that additional coverage is available and can be purchased by the policy owner without proof of medical insurability. As an insured’s income increases, the policy owner can purchase additional monthly benefits regardless of any health changes provided the insured is not disabled.
Benefit Increase Rider
Benefit Increase rider as your earnings grow, enjoy the flexibility to purchase increases in your coverage at three-year intervals, subject to issue and participation limits — without having to provide medical information.
Future Increase Option
This option provides the opportunity to increase benefits, without medical underwriting, annually through age 55. Financial underwriting is required.
Benefit Purchase Rider
The BPR allows you to purchase additional coverage every three years in the form of a separate policy with no evidence of insurability with just financial and occupational underwriting up to age 55.
Future Increase Option
This rider permits you to purchase additional coverage with only financial evidence of insurability. Through age 45, the insured may exercise the full amount of this rider, on any given policy anniversary. On each subsequent anniversary date, ages 46 through 55 may exercise 50% of the original base monthly benefit of the policy, provided you qualify financially. The total of all increases may never exceed the amount purchased under the FIO.
Future Benefit Increase Rider
Your coverage will automatically increase every year for six years* to help keep up with inflation without submitting evidence of insurability You are guaranteed a minimum increase of .4% compounded and a maximum of 10% compounded This amount is based on the change in the Consumer Price Index for All Urban Consumers (CPI-U).
You may also request an additional increase, up to $500 maximum, based on your income This rider can be renewed at the end of six years with financial underwriting
Cost of Living Adjustment
The Cost of Living Adjustment feature ensures your benefits keep pace with inflation if you are receiving compensation from a disability claim.
|4-year Delayed 3% Simple Interest|
|3% Simple Interest|
|0-6% Compound Interest|
|3% Compound Interest|
|2-6% Compound Interest|
|3-6% Compound Interest|
|6% Compound Interest|
While you are Disabled, your base monthly benefits will be increased once each year, on the anniversary of your disability.
The increase will be 3% each year applied on a simple interest basis. The increase applies to the base monthly benefit and any benefit being paid under the social insurance supplement rider. As long as you remain disabled, benefits will be paid until the end of the maximum benefit period.
After a disability during which we increase your base monthly benefits under this rider, you may increase the base monthly benefit by an amount equal to the increase in benefit provided by this rider, rounded to the nearest $100.
To use the option, you must:
(a) be actively and gainfully employed on a full-time basis; and
(b) apply within 90 days after your disability ends; and
(c) apply before your age 60; and
(d) not be receiving benefits under the policy or any riders.
Premiums for the increase will be based on your age and sex as of the date you elect to increase the benefit.
This Rider provides benefits to cover up to 100% of Your pre-disability earned income (at time of issue).
Benefits will be paid if:
• You meet the definition of presumptive disability OR
• You meet the definition of total disability AND are unable to perform 2 of 6 activities of daily living OR
• You meet the definition of total disability AND suffer a severe cognitive impairment
To help keep pace with inflation, this rider increases your benefits by up to 3% each year during a disability that lasts longer than 365 days.
This option adjusts your benefit on an annual basis at a rate of 3% compounded to help keep pace with inflation during a period of disability.
As long as you remain disabled, we will pay an additional 3% of the base monthly benefit on each anniversary of the date of disability. This is not a compound calculation. Benefits will not be increased by this rider after age 65 but will remain at the same level applicable at age 65 until benefits cease.
While you’re disabled and receiving monthly benefits, this rider increases your benefit to keep up with inflation Your benefit increase is calculated on a compounded basis as determined by the change in the Consumer Price Index for All Urban Consumers each year up to a maximum increase of 3% If the change in the C I- index is zero or negative, your monthly benefit will remain the same
Catastrophic Coverage gives you an additional monthly income if you are unable to perform 2 of the 6 activities of daily living (eating, bathing, getting dressed, toileting, transferring, and continence). This additional income helps you afford assistance that isn’t covered by your health insurance while also providing your income replacement.
|Up to: $8,000|
|Up to : $10,000|
|Up to: $12,000|
*Note: You can adjust the benefit period and elimination period in addition to the benefit amount up to the limits specified.
You have a catastrophic disability or are catastrophically disabled if due to an injury or sickness: (1) you are unable to perform two or more activities of daily living without stand-by assistance due to loss of functional capacity; or (2) you require substantial supervision due to severe cognitive impairment.
The monthly benefit amount provided by this rider and payable to you if you are catastrophically disabled. The catastrophic disability monthly benefit amount is shown in the policy specifications. In order to be eligible for each catastrophic disability monthly benefit, you must satisfy the regular care of a physician requirement as stated in the benefit section of the policy.
Definition of Catastrophic Disability or Catastrophically Disabled — The insured’s condition has met either (1) or (2) where: (1) The definition of “Presumptive Disability” as defined in your policy, which includes: complete loss of speech; complete loss of hearing in both ears; complete loss of sight in both eyes; or complete loss of use of both hands, or both feet, or one hand and one foot. (2) The definition of “Total Disability” as defined in your policy, and (a) or (b) where: (a) The inability to perform two (2) of six (6) activities of daily living (ADLs), as defined below, without assistance.
Catastrophic Disability / Catastrophically Disabled means that due to your injury or sickness: you are unable to safely and completely perform two or more activities of daily living without hands-on assistance or standby assistance due to loss of functional capacity; you require substantial supervision for your health or safety due to severe cognitive impairment; or you are presumptively disabled.
Basic Catastrophic Coverage
Means that due to injury or sickness, you are:
• Unable to perform two or more of the activities of daily living without human standby assistance; or
• cognitively impairment
• irrecoverably disabled
Severe Catastrophic Coverage
This option provides extra funds if, solely due to injury or sickness, you are irrecoverably disabled or are cognitively impaired.
This rider provides for a yearly compound interest cost of living adjustment in certain monthly income benefits during disability.
Due to a sickness or injury: (1) you are unable to perform two or more activities of daily living without stand-by assistance due to loss of functional capacity; or (2) you require substantial supervision due to severe cognitive impairmentc
Mental Health Coverage
Mental Health Coverage specifies the benefit period for disability claims due to mental health-related illnesses such as anxiety, stress, or depression. If for some reason you are hospitalized due to a mental health-related illness, this definition does not apply but instead, your base policy definition applies and your coverage will be paid out. For mental health-related illnesses that do not put you in a hospital but still keep you from working, you can expect to see benefits paid out for these designated time frames.
*Note: Unlimited mental health coverage would match the policies benefit period.
These special benefits are the base benefits that come with the insurance policies at no additional cost to you. Note that these features differ by each insurance provider.
|Unemployment Waiver of Premium|
Except as expressly stated in an Exclusion Rider attached to this policy, during the first two years following the issue date of this policy, we will not pay a Monthly Benefit for a Pre-existing Condition if it was misrepresented or not disclosed on the application. Pre-existing Condition means a Sickness or a physical or mental condition for which not more than two years prior to the Policy Date:
(1) symptoms existed that would cause an ordinarily prudent person to seek diagnosis, care or treatment; or
(2) medical advice or treatment was recommended by or received from a licensed medical practitioner.
The Maximum Benefit Period for each period of disability caused by or contributed to by a mental disorder is 24 months, with no aggregate lifetime limit. However, if You are confined to a hospital and under a doctor’s care, the benefits will continue to be paid up to the maximum benefit period. A mental disorder includes but is not limited to mental, emotional or behavioral disorder, or disorder related to stress or to substance abuse or dependency.
The Platinum Advantage policy provides 24 months of benefits for disabilities stemming from mental disorders and/or substance abuse.
For mental and/or substance-related disorders, the policy illustrated, which includes any riders, only provides up to 24 months of benefits during your lifetime, unless you remain continuously confined in a hospital for treatment.
Benefits will not be paid for more than 24 months during the lifetime of the policy for total disability caused by a mental/nervous disorder and/or drug or alcohol abuse.
Benefits paid to you will be limited to an aggregate lifetime benefit of 24 months for mental, nervous and substance abuse disorders as defined by the rider. Benefits will be paid beyond the 24 month limit when you are continuously confined as an inpatient in a hospital, subject to the maximum benefit period.
As long as the premiums are paid on time, we will continue coverage through the day prior to the policy anniversary on or next following the insured’s 65th birthday.
A condition for which symptoms existed that would cause an ordinarily prudent person to seek diagnosis, care or treatment within a 12-month period immediately prior to the coverage date(s), or for which medical advice or treatment was recommended by a doctor or received from a doctor within a 24-month period prior to the coverage date(s).
The period immediately following the start of disability during which benefits do not accrue. Disability must continue to the end of the waiting period, shown in the policy specifications, before any benefits may be payable. The waiting period may be completed on an intermitted basis subject to the recurring disability provision.
Disability Insurance Frequently Asked Questions
Life happens. We cannot predict the future, but we can be prepared for it. That is the purpose of insurance – to protect and provide for yourself and your loved ones if the unfortunate happens. Your life and disability insurance choices may make the difference in your family’s lifestyle after a tragedy strikes by paying the bills, financing children’s educations, and protecting your spouse’s retirement.
Premium and policy eligibility are based on age and current health status. Therefore, the best time to purchase a disability insurance policy is when you are young and healthy and while discounts are still available with residency or fellowship status. Additionally, many insurance carriers will restrict the amount of coverage you are eligible for if you have an employer-sponsored plan.
Physicians Thrive only offers what we view as the strongest and most comprehensive physician-specific plans from the leading disability insurance carriers. We work with Ameritas, Guardian, Metlife, Principal, MassMutual and The Standard.
The Comdex is not a rating, but a composite of all ratings. It ranks companies on a scale of 1 to 100, showing you at a glance, where a company is ranked among all rated companies. The Comdex Ranking is not equated to a grading system such as 90% equals an A or 80% equals a B grade.
The Comdex Ranking is a relative number based on the following factors:
• If a company’s ratings from one of the ratings services AM Best, Standard and Poor’s, Moody’s or Fitch changes
• If one or more companies are added or removed from the list of insurers rated by the above rating services
• If another company with similar ratings, experiences a rating change, the percentiles or Comdex Ranking will adjust
For example, if 1000 companies are rated, a company that is rated in the top one hundred of these companies, and meet the criteria for Comdex, will have a Comdex Ranking of approximately 90 or above.
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