Disability Insurance Terms You Should Know

Accumulation Period

The timeframe when the waiting period must be completed, allowing for non-consecutive days off work to count toward this period, potentially leading to a disability insurance claim. A lengthier waiting period typically means a longer timeframe for accumulating these days off work.

Activities of Daily Living

ADLs are basic tasks like eating, bathing, getting dressed, moving, using the toilet, and staying dry. If someone can't do enough of these tasks, they qualify for benefits from their long-term care insurance.

Association Group Disability Coverage

Combination insurance for medical professionals, mixing group and individual aspects. Offered by medical organizations to attract new members. Plans need ongoing fees for coverage. Premiums rise with age and may unexpectedly go up. Not advised for sole reliance due to cost instability and limited benefits language.

Benefit Period

Disability benefits usually last until age 65 or 67. Some plans provide lifelong benefits if you're disabled. You receive benefits while disabled, up to the period you pick (2 years to age 65, 70, or lifelong extension). Longer periods cost more.

Business Overhead Expense Insurance

Coverage pays for a medical practice's costs if the doctor is unable to work due to disability, preventing the need to use personal funds or disability benefits for expenses. These plans typically last 12 to 24 months, aligning with existing practice agreements or leases, providing time for the disabled doctor to assess their recovery or decide on the practice's future. This insurance can be deducted as a business expense, offering affordability and lower costs compared to standard disability income policies.

Buy-Sell Policy

A buy-sell insurance policy gives money to the company or partner of a disabled owner to buy the owner's share in installments or all at once.

COLA (Cost of Living Adjustment Rider) Rider

COLA increases your monthly disability payment as prices rise. It's important for long-term disability claims. This add-on boosts the monthly benefit based on CPI, usually up to 3% or 6% per year during a claim. It activates during a claim, so it's crucial to update benefits yearly. It guards against inflation reducing your benefit.

Conditional Receipt

Physician's insurance starts immediately if they pass medical checks. If they become disabled before policy approval, they receive benefits if they would've been approved based on their health status. It refers to quick activation of disability coverage for physicians if they meet medical requirements. If the insured becomes disabled before policy approval, benefits are provided if their health status would have allowed policy approval.

Conversion Privilege

Employees leaving a job can keep disability coverage without proving health with the conversion privilege. Though it costs, it ensures coverage when switching jobs. Business Overhead Expense policyholders can also switch to individual Disability Insurance policies as needed. This helps adjust coverage based on current situations, giving confidence and financial protection ahead.

Definition of Disability

Disability definition decides when you are seen as disabled. The top policies see you as disabled if you can't do your current job tasks. This is known as "own occupation." The worst definition is a policy that sees you as disabled only if you can't work in "any job".

Effective Date

The effective date is the day the policy begins.

Elimination Period (Waiting Period)

The time you have to wait after becoming disabled before getting paid is the elimination period. Choices are 60, 90, 180, or 360 days. The common wait time is 90 days. It's how long a doctor must be disabled before making a claim. A longer period means lower premiums as it's like a deductible.

Exclusion

This explains situations insurance won't cover doctors for, resulting in no payments. Many insurers exclude disabilities from war and mental/nervous issues. Some companies cover mental/nervous disorders.

Future Increase Option / Future Purchase Option Rider

Physicians can increase disability coverage yearly without a health check with the Future Increase Option (FIO). This benefit helps new doctors secure higher earnings in the future, as health changes might limit their ability to boost coverage. They need to demonstrate higher income using W-2s or tax returns to qualify. FIO is an optional policy upgrade allowing holders to raise coverage based on income growth or life events, eliminating the need for further medical exams. Contact us for details on how FIO can protect your financial future.

Group Disability

Physician group disability insurance can be affordable at first but may change yearly. Plans are often not transferable to a different job.

Guaranteed Insurability Rider

This add-on lets you buy more disability insurance later without health checks. You need financial approval, but any injuries or illnesses won't stop you. It's great for pros expecting big future income, such as medical trainees.

Guaranteed Renewable and Non-Cancelable

Your policy is secure if you pay on time until age 65. Rates and terms stay the same. Disability plans can't alter definitions or cancel, but can adjust group premiums. Group plans usually stay guaranteed renewable.

Guaranteed Standard Issue (GSI)

Insurance companies may offer disability insurance to big medical groups without detailed checks for individual physicians to prevent one-sided risk problems called adverse selection.

Individual Disability Insurance

A plan that safeguards a doctor's earnings if they get injured or sick. The doctor needs to show their health and earnings to the insurance company for approval. Once in effect, these plans typically have fixed premiums and terms until around age 65 or 67.

Issue Limit

Insurance companies determine the maximum monthly benefit for a physician based on their income. Each company has its own limit for each medical specialty and income level.

Key Person Policy

Key Employee Disability Insurance provides financial protection to businesses if a crucial employee is unable to work due to disability. It helps cover costs from the absence of this key employee, ensuring business operations can continue smoothly despite the setback.

Modified Own Occupation

A stricter definition of "own occupation" coverage pays benefits if the doctor can't do their job's main tasks. If they work elsewhere, that income reduces their disability benefit.

Monthly Benefit

The insurance company will give you money each month if you can't work. You receive this payment at the end of the month, usually without taxes. It's the money paid to a doctor who is considered disabled by the insurance company.

Own Occupation

Physicians have better disability coverage with "own occupation" policies. If they can't work due to illness or injury, they get a monthly payout even if they work elsewhere. Their benefits aren't reduced based on earnings from a different job.

Overhead Expense Insurance

Custom disability insurance safeguards business owners and professionals by covering ongoing expenses if the owner is unable to work, ensuring business continuity during unforeseen events.

Participation Limit

Insurance company's share in a physician's disability income protection plan, set at a max level for each carrier and medical specialty. Prevents a physician from receiving more benefits than their actual income after taxes by coordinating with other insurers.

Pre-Existing Condition

A preexisting health issue may affect the chance of your claim getting approved when the insurance company decides not to cover it. This mainly happens with group disability and guaranteed standard issue insurance.

Presumptive Disability

In disability insurance for doctors, certain conditions automatically qualify as total disability, like loss of sight, limbs, or speech. Different insurers and policies have varying criteria for such cases.

Recovery Benefits

When a doctor can't work because of a disability, an insurance company gives money for support. This aid could be a lump sum or regular payments. Doctors should learn about residual disability benefits and compare them from various insurers to make informed choices for their insurance needs. Understanding this benefit is key for doctors to select the best coverage.

Recurrent Periods of Disability

When a doctor is healing from being disabled, the insurance company gives money to help them. This money can be a one-time payment or ongoing support. It's important to know how this works and compare it with other insurance companies.

Rehabilitation Benefit

Physicians Disability Insurance offers extra help for doctors who are disabled. This support is meant to make life easier and help doctors get back to work quicker, easing money worries for them and their family. Our goal is to give thorough rehab support to help doctors conquer difficulties and get back to work faster.

Resident Disability Coverage

Custom Disability Insurance for Doctors in Training. Residents and fellows can get disability coverage based on their health, not income. It moves with them to new jobs after training. Contact us for a personalized comparison of top insurance options. Our coverage fits your career and protects your income.

Residual (Partial) Benefit Rider

The residual benefit pays partly for partial disability. If you're ill or injured and make less money, you'll get a benefit equal to the percentage of your lost income. This definition is important for doctors who are not fully disabled but partially so. Most disability policies should cover partial disability since many claims fall into this category. The physician is not completely disabled but experiences some loss in time or duties and income, typically at least 20%, but some policies may cover as low as 15%. This definition is usually more flexible than partial disability since total disability during the waiting period may not be required to qualify. This feature is offered in all good disability plans and should be considered because a doctor may only be partially disabled, never totally.

Social Security Substitute Rider

Including a Social Security clause in a doctor's disability insurance can lower costs. If the doctor gets Social Security disability, the insurance payout is adjusted. But if the doctor is disabled per the policy but doesn't qualify for Social Security, there's no change. Note, getting Social Security disability as a doctor is tough. Benefits depend on prior earnings and are on the Social Security statement.

Specialty Coverage

Physicians Disability Insurance provides a specialty definition of total disability for physicians specializing in a single area, considering their specialty as their occupation. This unique feature offers customized coverage for medical professionals.

Total Disability

If a doctor can't do all the important tasks in their disability policy due to total disability, they can get full monthly benefits with a total disability claim.

Waiver of Elimination Period

In some cases, doctors who have a similar issue can skip waiting before coverage starts again.

Waiver of Premium

If a doctor gets disabled and gets paid, the insurance company won't ask for the disability premium.