There are a number of special factors that physicians and other medical professionals should take into account when purchasing disability insurance. Below are 6 key features and benefits to strongly consider having in your plan:
1. Specialty Occupation Rider
This is an important one. Look for a carrier that actually will include in their contract that your medically defined specialty will be covered. This rider is not to be confused with the basic Own Occupation Rider. It will also ensure that the disability benefit will be paid out to you even if you were gainfully employed in a different occupation or specialty, for example as a teacher.
2. Residual Disability and Recovery Benefit
This rider adds income protection in two ways. It will provide a benefit to you if you have a disability that doesn’t render you completely unable to work, but causes a reduction to your income. It will also restore some of your lost income if you are out of work for an extended period of time only to come back to a practice that is half the size.
3. Guaranteed Future Insurability
This rider can particularly help younger professionals who are starting out in their careers and will be earning considerably more in the future. It allows the purchase of additional insurance without answering any medical questions as long as you meet the income eligibility.
4. Catastrophic Disability Benefit
Disability insurance is designed to replace income, not to cover additional medical expenses that may arise from a major illness or injury. With most companies, for a nominal amount (sometimes less than 5 percent of the total premium) policy holders can increase their monthly disability benefit by up to $10,000 per month.
5. Non-Cancelable vs. Guaranteed Renewable
Having a non-cancelable contract guarantees that the provisions and rates set forth in the policy cannot be increased or changed. It is highly recommended to stick with this type of contract, but guaranteed renewable contracts can be a good solution if you are on a budget.
6. Cost of Living Adjustment
This rider can be added to your contract to ensure that the purchasing power of your disability benefit does not erode if you are on claim for an extended period of time. However, your monthly benefit will not increase unless you are on claim. For example, if you purchased a policy in your 20s and file a claim at age 60, you would have paid a large amount of money to the insurance company for a very small increase to your benefit. This shouldn't necessarily deter you from adding this benefit to your contract, but for physicians on a tight budget, this is usually the first feature that they remove.
This article was prepared by Vincent Cucuzza and is not intended as legal, tax, accounting or financial advice. The opinions provided above are those of Vincent Cucuzza and not necessarily those of MetLife and are provided for general information purposes only. MetLife does not guarantee the accuracy of the information presented as the features and benefits being presented may not be applicable to MetLife insurance products. Like most insurance contracts, they contain exclusions, limitations, and reduction of benefits, surrender charges and terms for keeping them in force. These policies provide disability income insurance only. They do NOT provide basic hospital, basic medical or major medical insurance as defined by the New York State Insurance Department. The expected benefit ratio for these policies is at least 50%, depending on the policy. This ratio is the portion of future premiums, which the insurance company expects to return as benefits, when averaged over all people with the applicable policy. Metropolitan Life Insurance Company (MLIC), New York, NY 10166. Securities and Investment Advisory Services offered by MetLife Securities, Inc, (MSI) (FINRA/SIPC), a registered investment adviser. MLIC and MSI are MetLife Companies. L0416464938[exp1216][AL,CO,CT,FL,GA,IL,IN,KS,KY,MA,MD,ME,MO,NC,NE,NJ,NY,OH,OK,OR,PA,RI,SC,TN,TX,UT,VA,WA][DC]