Don’t Get Short-changed by Short-sighted Savings in Disability Insurance

Fully protect the investment you have made in your earning potential

Physicians often share other disability plan proposals they have been presented so we can help them compare their options.  A concerning trend we are seeing in these plans is a shift in the definition of “total disability” that leaves physicians exposed to risk, often without a significant cost savings compared to more comprehensive plans.  The plans are being marketed as being physician-specific, covering occupations in the medical field; however, we would like to highlight a significant difference from “true own occupation” plans we recommend to our physicians that might outweigh any premium savings.

The Fine Print Really Matters

Review the language in these two plans:

Plan A

“You will be considered totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation.

Your occupation means the occupation(s) in which you are gainfully employed during the 12 months prior to the time you become disabled.

If you have limited your occupation to the performance of the material and substantial duties of a single medical or dental specialty, we will deem that specialty to be your occupation.”

 Plan B

“The insured is totally disabled when both unable to perform the principal duties of the regular occupation and not gainfully employed in any occupation.

If the insured can perform one or more of the principal duties of the regular occupation, the insured will be considered totally disabled if:

a)   more than 50% of the insured’s time in the regular occupation at the time the disability began was devoted to providing direct patient care and services;
b)   the insured is not gainfully employed in any occupation; and
c)   at the time disability began, the insured was primarily engaged:
i.   in a procedure-based medical or dental specialty for which board certification is available and the insured is unable to perform the principal procedures of the medical or dental specialty
ii.   in a non procedure-based medical or dental specialty for which board certification is available and the insured is unable to perform the principal duties of the non procedure-based patient care and services.”

Let’s apply each to this scenario to help illustrate the differences. Dr. Johnson is a cardiothoracic surgeon who has lost her ability to perform surgery.

With Plan A, if Dr. Johnson’s policy defined her medical specialty as “cardiothoracic surgery”, she would be considered totally disabled, eligible to receive total disability benefits, and may still earn an income now as a general cardiologist.

With Plan B, Dr. Johnson would need to remain unemployed to collect total disability benefits.

Is the Savings Worth It?

Often, the difference in premiums between these two options is not significant.  Some plans even promise future benefits, to offset premium costs; however, those future benefits are not guaranteed.  But look at what Dr. Johnson has to gain with Plan A – she is able to collect total disability benefits AND still continue to work full-time in a related field as a cardiologist. With Plan B, she may choose to go back to work as a cardiologist, but will not qualify for “total disability” benefits. Of course, this is a general example and every case is unique. Carriers consider all the facts of each situation to determine how they will pay out a claim. But language preventing future employment, like in Plan B, does limit your flexibility and income potential if you become disabled.

You have made a significant investment in training for your specialty – an outright investment of tuition plus the opportunity cost of delayed income and investment. Is the difference in premiums enough to forfeit the opportunity to make the maximum return on your investment in training?  Don’t shortchange yourself of protecting the long-term returns on that investment for short-sighted savings today.


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