[Editor's Note: This is another in a long running series from website advertiser Lawrence B. Keller, CLU, ChFC, CFP® about disability insurance. These posts go way out into the weeds on disability insurance. These policies can become unbelievably complex. Although disability insurance is something you may only need to purchase once or twice in your life, it is best to do it the right away. Evaluate all of your options, including any group policies available to you, with an independent agent, and try to find the best balance between features/amount of coverage and the price at which the policy is offered to you.]
Principal
Principal recently announced an increase in their Issue & Participation (I&P) limits for both the Future Benefit (FBI) Rider and for the majority of medical specialties. They have also made a few occupation class changes for certain medical professionals including: Anesthesiologists, Emergency Medicine Physicians and Physician Assistants.
Larry Keller
Issue and Participation Limits
The Future Benefit Increase (FBI) Rider is now available to those purchasing policies in occupation classes 4A-M and 5A-M with total benefit amounts up to $14,000 month (previously $13,000 month). This Rider allows the insureds to increase their monthly benefits 4-10% based upon changes in the Consumer Price Index, regardless of their earned income and/or other disability insurance inforce (individual, group or association) for the first six policy years. The limit is different for those policies written prior to the 700 policy series.
The issue limit has been increased to $17,000 month (up from $15,000 month) except for Anesthesiologists and Emergency Medicine Physicians (see below). This is the amount of coverage that Principal is willing to issue on their own to occupation classes 4A-M and 5A-M. They will continue to participate with other individual disability insurance policies to a total of $25,000 month (this has not changed) and, the biggest news, is they will now participate up to a total of $35,000 month for those physicians that have group Long-Term Disability (LTD) coverage inforce. Prior to this change, MetLife was the only carrier that had participation limits this high for those with group LTD coverage. I believe that this will help Principal increase their share of the medical market – especially for female physicians where policies with a unisex rate and discount may be available.
Occupation Class Changes
Anesthesiologists and Emergency Medicine Physicians were downgraded from the 4A-M occupation class to the 3A-M occupation class. While the Regular Occupation Rider (true “Own-Occupation” definition of total disability remains available), the premium rates for these specialties has increased by 15-20%. The same is true for Psychiatrists as they have been downgraded from an occupation class of 5A-M to 4A-M.
While, in my opinion, Principal will continue to be the carrier of choice for females in these specialties – especially when a unisex rate and discount is available, some males may choose to purchase their polices from other carriers with similar pricing and contractual provisions. [I mentioned this in my November newsletter. If you're not getting these, sign-up here. Unfortunately, prior to December, Principal was usually the best value for emergency docs. -ed]
Physician Assistants have also had their occupation class changed. However, they have been upgraded from 3A to 4A-M. As a result, they are provided with both a premium savings along with the availability of the Regular Occupation Rider (true “Own-Occupation” definition of total disability). Just keep in mind that the Regular Occupation Rider is not available to those in the 4A-M occupation class in the State of California.
MetLife
Just when you think MetLife could not make any more positive changes to better position their product in the marketplace, they have made changes to their government employee guidelines, have more options for Californians, and improved their Simplified Underwriting Program (SUP).
Changes to the Government Guidelines
Government employees can now qualify for disability insurance coverage based upon MetLife’s normal Issue & Participation limits (compared to the previous “cap” of $10,000 month for physicians). Additionally, the Guaranteed Insurability Option (GIO) Rider is also now available where this was not the case in the past.
Prior to this change, it was very difficult to recommend MetLife’s policy to government employees (State, City or county) as, if they left the VA Hospital or a similar employer, they would potentially have to purchase another policy from MetLife or another carrier in order to protect their rising income and/or loss of their disability benefits, including those associated with the Federal Employee Retirement System (FERS). This would subject them to both medical and financial underwriting at that time and, if their health had changed since the purchase of their original policy, they could find themselves either underinsured and/or unable to purchase additional insurance either at all or the way they had been originally underwritten.
The GIO Rider protects against this as no exams, blood tests, urine tests or medical underwriting is required. This is a welcome change and should serve both potential policyholders very well as they can adequately protect their income – both now and in the future.
Income Guard Policy Series – Approved in California
MetLife’s Income Guard policy has also been approved in the State of California (Income Guard CaliforniaSM). Although some policy provisions differ compared to other states, this is another welcome change as most other states had approved this policy series years ago! California physicians will quickly see that this is a significant improvement over the Salary Saver that had been available previously.
MetLife has also increased their issue and participation limits (I&P) for applicants age 59 and over. While I don’t get many calls from physicians that are in this age group looking for coverage, for those that need and want it, it will have a positive impact and is potentially much better than the prior maximum monthly benefit of $10,000. However, issue limits will not exceed MetLife’s maximum issue and participation limits by occupational class and any existing, in-force individual coverage will be taken into consideration when determining the additional monthly benefit available, regardless of occupation.
Simplified Underwriting Program Improvements
MetLife will now issue up to $7,500 month (increased from $6,500 month) of individual disability insurance coverage or up to $10,000 month of disability Business Overhead Expense (BOE) insurance (to those applicants age 45 or younger) using their Simplified Underwriting Program (SUP). This program allows insureds to acquire the disability insurance coverage they need with just a fully completed application, prescription drug check and, in some cases, a brief telephone interview.
The Simplified Underwriting Program is not available in California. Additionally, an application is ineligible if an insured has an adverse driving record (DUI) and/or had a disability insurance policy rated, modified or declined in the past.
Berkshire (Guardian)
Insureds applying under the “New Professional Program” (interns, residents, fellows and those in the first year of practice) age 40 and younger who use TeleMed Interview will no longer be required to do an exam, blood test or urine test. This DOES NOT include Dentists or those purchasing lifetime benefits or the Lump Sum Rider. This program is also available to physicians in the State of California.
While this should speed up the underwriting process tremendously and make things easier for physicians to purchase coverage from Berkshire, the “preferred” underwriting classification will not be available for those that do not do labs as a part of the underwriting process. This would normally translate to a 5% premium savings for those that would otherwise normally qualify for this underwriting classification. [I think I'd gladly pee in a cup for 5% off my disability insurance premiums for the rest of my life.-ed]
Ameritas
Two new enhancements have been made to the DInamic Foundation in approved states for certain occupational classes.
One, a new preferred occupations premium (10% savings) has been introduced for those medical specialties in occupation class 6M that use the EZ App process. These include:
- Allergists
- Endocrinologists
- Family/General Practice Physicians
- Genetic Physicians
- Hematologists/Oncologists (excluding Surgical Oncologists)
- Internal Medicine Physicians
- Nephrologists
- Neurologists
- Pediatricians
- Psychiatrists/Psychologists (with a PhD)
- Radiologists (does not include Interventional Radiologists)
- Rheumatologists
This is not applicable to Business Overhead Expense (BOE) policies or those in a Guaranteed Standard Issue (GSI) program. This is also not available in all states.
Two, premium rates for female physicians have also been reduced by 10% in approved states. While this is helpful, it won’t translate to all that much when a unisex rate and discount may be available elsewhere (Principal and MassMutual’s policies with a multi-life discount or Standard’s GME Program are good examples).
When it comes to purchasing disability insurance, be sure to do your homework. The marketplace continues to change and carriers continue to compete for their share of new business. Insurance agents and financial planners that are familiar with and have an understanding of each company’s policy or policies will be able to make specific recommendations based upon your individual needs, goals and budget. They should also be familiar with the discount plans available to you through your hospital affiliation and/or professional associations, which can translate to a significant premium savings – both now and in the future!
What do you think? Will any of these changes affect you? What features were most important to you when you purchased your policy? Have you had to use your policy? What company did you end up going with? Comment below!
What is meant by 3A-M class? how does that differ from 4 or 5 A-M? Why did ER and Anesthesia had a downgrade?
How is disability calculated? Is it based on peak earning years or last three years?
Is it worthwhile to have disability if you are working half time and only got 5 to 10 years to retirement?
PK,
I will attempt to answer your last question regarding if disability is worthwhile for you. This is my opinion and opinions vary. I find that many physicians overbuy insurance. I think it is because most insurance sales people will attempt selling you as much insurance as possible.
My advice for you is to see what your current spending is, then subtract out spending you would not do if you were disabled, consider adding some spending due to your disability, then subtract what Social Security will give you. Go to ssa.gov for those numbers. This is how much you need every month. Since you are looking to retire in just a few years then it is likely you have a reasonable nest egg already and therefor may not need as much for disability insurance to begin with considering SS will provide some of it. Could your spouse help out and provide some cashflow for a few years if needed? Once you know what the number is and its cost, you can consider if the risk of disability is worth the price. Realize that every year your nest egg grows your need for disability decreases. The goal is to eventually be self insured and not need disability or life insurance at all.
Maybe a decent option for you is short term disability insurance. I know absolutely nothing about these, but could be worth looking at. Maybe something for 2 years with a 90 day elimination period could be bought pretty cheap.
2 years isn’t short term disability. ST disability is 90 days, and can be replaced with an emergency fund. You’re right that he might be able to find some inexpensive group disability policy that only pays for 2-5 years though. Check with your employer and specialty society.
Your disability benefit is based on how much benefit you purchase/what the contract says, not necessarily what you earn or have earned. If you make $20K, you bought a $10K benefit, and you’re completely disabled, you get $10K a month.The older you are and the larger your nest egg the less need of disability you have. The question to ask is “What is the financial plan if you can no longer work starting tomorrow?” If that plan is acceptable to you without disability insurance benefits, then drop the policy.
Occupation class is one component as to how disability insurance premium rates and calculated (the other factors are age, gender, state of residence, monthly benefit amount, elimination period, benefit period and optional riders selected).
The more favorable an occupation or medical specialty is viewed, the lower the premium rate that one pays.
In Principal’s world in terms of medical occupations, 5A-M is the most favorable, followed by 4A-M and then 3A-M. Simply put, the cost of a policy for a 4A-M compared to a 3A-M is 15-20% less expensive for the same policy.
Principal had been very much underpriced for Emergency Medicine Physicians and Anesthesiologists. As a result, they increased the pricing to be more in line with the risk they were taking relative to their claims experience. Principal is still a very solid offering but now their policy for these specialties is more in line with the rest of the marketplace. The exception is females where a unisex rate and discount is available and they are virtually unbeatable.
The definition of total disability (in most cases) is the inability to perform the duties of your medical specialty. If one cannot perform those duties (assuming that is what the insured was doing at the time of claim), full benefits would be paid.
Unless one is working full-time (30 hours per week or more), the only individual carrier that will offer coverage is Principal. This is for those working 20-29 hours and earning at least $40,000 annually and are in occupation classes 3A/3A-M or higher.
thank you
Would you be able to briefly clarify what makes a specialty “favorable”? Is it based on statistical data of the likelihood of someone in that specialty becoming disabled (I.e. It is a characteristic of the people choosing that specialty such that they tend to be unhealthier )? Or is it based on the responsibilities of that specialty (I.e. Anesthesiologists and emergency medicine physicians have to use their hands and feet more than an allergist, and thus there is a larger number of potentially disabling events)?
Generally, a medical specialty is considered to be more favorable (in a better occupation class) if it includes less physically demanding duties and claims experience has been better than what was expected (the number of claims filed were along the lines of what the actuaries predicted or lower).
Traditionally, the specialties with the least favorable (highest number of claims) experience has been neurosurgery, orthopedic surgery, cardiothoracic surgery, emergency medicine and anesthesia.
While I’m not at all surprised with Principal’s downgrade of Emergency Medicine Physicians and Anesthesiologists, one that really surprised me was the upgrade of Orthopedic Surgeons (from 4M to 5M) by Ameritas.
I have a few questions:
1. An insurance agent insists that Northwestern Mutual is one of the most likely companies to pay out for disability and are less likely to deny benefits than other companies. Does anyone have any information/comments on this?Most doctors I know here in Florida have a disability or life insurance policy from Northwestern.
2. Also if someone becomes disabled is it true that the disabled has to prove yearly that their status hasnt changed and that they are still disabled?
Sameer-
1. Northwestern Mutual is a very good insurance company. However, unless you purchased your policy prior to September, 1997, they have not offered a policy with a true “Own-Occupation” definition of total disability to physicians since that time.
As a result, what they currently offer is not very competitive in terms of contractual provisions or premium rates compared to other carriers in the marketplace.
https://www.whitecoatinvestor.com/why-not-northwestern-mutual-physician-disability-insurance-friday-qa-series/
In order for a claim to be paid, first and foremost, you must meet the definition of total or residual disability. After all, an insurance policy is a legal contract that ultimately determines if, when and how benefits may be payable.
Depending upon the specifics of your situation, the insurance carrier can ask you to provide documentation of your continued disability any time they desire.
I disagree that NML is a “very good” company. I dislike many of their business practices and find most, maybe all, of their products to be overpriced. I won’t ever be purchasing any policy from them ever again after the way they treated me. They like to boast of their “financial strength” but it seems pretty clear to me where that strength comes from. I sure like the idea of a “mutual” company but am not impressed with how this particular mutual company does business.
I was only speaking to their financial stability and claims paying ability and not the internal workings of the company.
What’s sad is that should be a given. I mean, that’s the basic requirement to be an insurance company. The difference between a good and a bad company is all above and beyond that.
ER resident here. I have a policy with MetLife. I am strongly considering fellowship. What/if any modifcations to my policy do I need to do if I end up matching into a fellowship ? Also – is it possible to increase the coverage once I complete residency even if I do fellowship given I could go out and work.
Other than accepting the Automatic Increase Benefits (AIB) of 5% (of the original monthly benefit of your policy) for the first 5 years that you own the policy, assuming you have $5,000 month or more in coverage, you would not qualify to purchase any additional coverage until you are in the last 6 months of your fellowship. At that point, you automatically qualify to purchase up to a total of $7,500 month, regardless or your income.
If you do not want to increase at that time (you don’t want to pay a higher premium), you can do an “off anniversary” GIO exercise within 90 days after the completion of your fellowship – as long as you are not paying your premiums on an annual premium mode.
What about the fellowship specialty? I’m own occupation for ER but this wouldn’t include my specialty. I guess does it matter? My guess is no bc if I became disabled for the specialty I def wouldn’t be able to work ER shifts either. I guess my question then is directed as if I decide to do my specialty only instead of ER or maybe just per diem ER, would the company look at my compensation differently bc its not coming from ER pay?
Your definition of occupation will follow you for the rest of your career, so the only time to buy a new DI policy because of a change of job is if the new occupation is less costly to insure, i.e a plastic surgeon decides to go into pediatrics.
This is also a great reason for Internal Medicine residents to buy a policy in residency before going into a cardiology fellowship as IM is less costly than cardiology.
Actually, Internal Medicine compared to Cardiology is not a good example as, in most cases, the occupation class is the same unless the insured in doing interventional cardiology. And even then, with some carriers the occupation class for Medical Cardiology and Interventional Cardiology is the same.
A better example would be a Pediatric Resident that plans on doing a fellowship in Emergency Medicine. They would be much better off purchasing their coverage as a Pediatric compared to a Pediatric Emergency Medicine Physician – although the definition of total disability would change with them as their duties changed.
Yeah I guess that is what I am wondering. If I can’t work in my fellowship specialty but can work in my primary specialty, can I get payed? Probably not a big deal unless I decide to do my fellowship specialty full-time and don’t want to do my primary specialty. Either way, both are procedural based but one is outpatient so I’m thinking maybe the rates would be cheaper?
IM is higher rated than Cardiology with a few different carriers. I think there was a WCI blog post about this a while ago.
That’s true but your original statement was not entirely accurate as you stated “IM is less costly than cardiology”.
MetLife, Standard, Ohio National and MassMutual use the same occupation for IM and (Non-Interventional) Cardiology.
Berkshire uses the same occ class but IM gets a 10% Preferred Occupation Discount.
Principal and Ameritas place IM in an occupation class higher than Cardiologists and IM Physicians may qualify for the Preferred Occupation premium (10% savings) if EZ App Process is used and the state has approved the discount.
The definition of total disability is based upon the duties that you are performing at the time of claim. If you cannot perform those duties, you would be deemed totally disabled and receive full benefits under your policy. However, if you can perform some, but not all of your duties, and that causes a loss of income of 15-20% or more compared to your pre-disability income (depends upon if you have the Income Guard or Omni Advantage policy), benefits would be paid proportionate to your loss of income.
What fellowship are you considering?
How often do physicians change carriers for DI? If not for Mr. Keller’s awesome updates, how often would you recommend re-querying your agent?
For example, I have an Ameritas policy which I still like (though don’t fall into the 6M or gender categories, wah-wah), but though cheaper at the time, the principal policies didn’t have the above benefits which I think make them also a good choice now and more on par with the other policies.
Chances of policies being cheaper later in your career, assuming you bought right the first time, are low. You might want a feature that wasn’t available to you before, of course, but expect premiums to be higher as you are now older.
Generally, I agree. However, there are a few exceptions like an occupation class upgrade and/or a discount being made available or a female physician that didn’t purchase a policy with unisex rates and she now has the ability to do so.
One or both of these situations can make up for being years older.
what about moving institutions – the same carrier offers a larger multi-client institutional discount? for example, i bought my policy last year and have had no major changes in health.
Thanks!
Arpit
That is possible but much less likely.
A better example would be a policy purchased in the state of California and you moved to another state with premium rates that are less expensive.
I have a question to Lawrence regarding Residual Benefit Rider.
I just don’t see the true value of Residual Rider. Here is the scenario: I am a General Surgeon. If I can not do surgery anymore due to sickness or accident, then I am total disabled for my own specialty (general surgery). However I could still do internal medicine while I am total disabled for surgery. Based on own specialty policy, I should be able to collect 100% disability insurance benefit, and 100% income from doing other specialty (internal medicine). So what is the benefit of Residual rider? It seems it ONLY has value when I go back to General Surgery for part time because of disability and earn less than 80% of pre-disability income. Am I right on this?
If I don’t purchase Residual Rider, and later on when I am filling the claim, will the insurance company decides if I am total (100%) disabled or only 50% disabled for my own specialty? For example, they could argue my sickness only cause me 50% loss of practicing surgery, therefore they will deny my disability claim since I am not 100% disabled. Do you know any such cases happened before? Thanks.
You are correct in that a policy that includes a true “Own-Occupation” definition of total disability protects your ability (or inability) to perform the duties associated with your medical specialty and, if you cannot perform those duties (assuming the occupational analysis at the time of claim confirmed this), you would receive full benefits under the terms of your policy.
You are also correct that the Residual Disability only comes into play if you can still perform your duties as a general surgeon but experience a loss of income of 15%-20% or more compared to your pre-disability earnings (this varies based upon specific carriers). Therefore, if you could still perform your duties as a general surgeon but needed to work fewer days, fewer hours per day, perform fewer procedures or you could no longer perform certain procedures and this resulted in a loss of income, benefits would be payable under the Residual Disability Rider. Without this rider, your policy would be “all of nothing” for general surgery and if your physician said that you could work even one day per week (assuming you earned the same amount for 5 days), this would cause a loss of earnings of 80% but no benefits would be payable.A good example might be a physician undergoing cancer treatment. Although the doctor may be able to resume working, it would likely be on a limited basis with an inability to return to full-time work.
Another example would be the Recovery Benefit, which is typically part of the Residual Disability Rider, and may continue to pay benefits based upon income loss even if one returns to work on a full-time basis but needs to rebuild their practice (patients left and other physicians started referring elsewhere in the disabled physician’s absence). For a staff physician with a salary, this might not mean much. However, to one that is paid on an “eat what you kill” basis this can help aid with financial recovery.
While some surgeons believe that they are either “in or out” and “operating or not”, the practical fact of the matter is that many, if not most, disability situations are gradual as opposed to immediate. Florida disability insurance attorney John P. Murray stated, “I usually see these doctors tough it out until the point where they just are physically unable to do it anymore”. Most people don’t want to recognize the fact that they are disabled and work to the point where they just are not able to do the job. This oftentimes creates an issue with the insurance carrier where the claims examiners focus on the “what changed” to create the disability that warrants benefits – typically in the total disability analysis. Also, the surgeon typically begins doing more consult or office practice as the physical demands of surgery become diminished and this again creates problems in securing quick recognition of disability.
Murray also says “in circumstances where a client has not opted for the residual or partial disability rider, the reason given was that the client either did not understand the benefit of the rider or simply wanted to save money (on their premium) by not opting for the rider. This ultimately was a bad decision in hindsight for the client.”
A residual disability rider is one that I think everyone ought to have and keep throughout the life of the policy.
If I lose 40% of my income due to disability, and my full DI benefit is $10,000/month and I have Residual Benefit Rider, in this case, will insurance company pay me $4,000 due to my partial disability?
Correct.
The Residual Disability Rider typically pays benefits proportionate to your loss of income. However, most companies state that for the first six months of a Residual Disability claim they will not pay less than 50% of your total disability benefit (if your loss of income is higher they pay more) and in the event your loss of income is more than 75%, then full benefits are paid for that month.
During residency in 1992 I bought own-occ DI with The Principal, and added a second policy to increase my potential benefits in 1996, when my income rose as an attending. The Principal was subsequently purchased by AXA, who isn’t mentioned in this update series. The only news reference I have read concerning AXA was about the battle a Parkinson’s-stricken ophthalmologist fought for years to retrieve his benefits.
> Can you tell me more about this company?
>The publication of updates on this topic seems useful only to the young who are about to purchase a new policy–or is it possible to migrate between companies, or otherwise benefit from this information?
I am approaching 60–I expect that benefits, if I ever access them, will come only until I’m 65. When is a good time to drop the coverage?
Thanks
What would be your recommendation for disability insurance for a female finishing a pediatric anesthesiology fellowship ?
I didn’t buy any disability insurance during residency . I don’t need a ton of coverage , $15,000 / month should be enough . After reading about the different choices I’m still unsure of what to pick. Thank you for your time!
I had to chuckle a little at your comment about not needing a ton of coverage then describing a measly $180K of after-tax income a year. 🙂 That’s a lot of money, more than I’ve ever spent in a year that I didn’t buy a boat in. I shouldn’t make too much fun though, I’m carrying $17,500 of monthly disability benefit.
Clearly I’m a newbie at this. I didn’t realize it was after tax and not before tax ?
Yes, if you’re paying premiums with after-tax dollars, as almost all docs are, then the benefits are tax-free.
I would look at Principal’s policy. Odds are very good, if you are still in fellowship, a unisex rate and 20% discount is available. This combination will provide you with a savings of 40-50% off of the normal female rates.
If you let me know which hospital you are at or send me an email, I should be able to let you know.
Hello, hoping to get some advice on how best to handle my situation prior to speaking with agents. I’ve read a number of the post here and have a few questions regarding comments I’ve seen.
Heres the setup: My wife and are both physicians. I am an orthopaedic surgeon in my second year of practice working for the military and most likely will separate from the military in three years. My wife is in her oncology fellowship with three years remaining.
1) As a military physician is it of any benefit to obtain additional coverage then what is offered by the military? I’ve read here that policies would be more expensive given the risk of disability being greater. When I’m a civilian I certainly plan to have coverage.
2) Would you recommend coverage for the both of us? My general thinking is that we could certainly live comfortably off my salary should she become disabled and therefore only really need the policy to protect my income.
Thanks for the input!
1. It will be hard for you to get whether you want it or not. Be sure to get some more when you get out. Thanks for your service!
2. Yes, it is reasonable to be each other’s disability policy. Sure, there’s a chance you both get disabled I suppose, but seems low. If you’re not okay living on just her salary, then better buy some on you.
Hi Everyone
I am facing a dilemna whether to change my disability insurance
I currently have a metlife disability policy for $5,000 monthly benefit (omni advantage) with elimination period of 180 days. I am paying about $2,080 per year
It has the following riders
lifetime benefit for total disability (no charge)
monthly benefit for residual disability with 24 m recovery benefit ($312)
presumptive disability (no charge)
your occupation benefit ($319)
Guaranteed insurability ($96.3)
max total increase $5000
unit of increase $1000
I have recently been offered 2 other policies which are also “own occupation” for the same benefit of $5,000 per month for lower premiums.
The first offer is from Ameritas for a premium of $1522 per year. If i add COLA to this policy the premium is $1757 per year
Ameritas polcy has the following riders
Nondisabling Injury Benefit
COBRA Premium Benefit
Survivor Benefit
Good Health Benefit
Presumptive Total Disability
Surgical Transplant Benefit
Cosmetic Surgery Benefit
Rehabilitation
Waiver of Premium
Optional Riders Selected
Enhanced Residual Disability Rider
Second offer is from MassMutual for a premium of 1460 per year. This includes the own occupation rider and extended partial disability rider.
If i add catastrophic disability benefit rider for monthly benefit of $12000, the premium is $1683 per year
I would really appreciate if you can give me some advice regarding which policy to choose.
As you can see the premium for my current metlife policy is higher as compared to the policies offered by Ameritas and MassMutual. But i understand there can be important differences between these policies.
The metlife policy offers lifetime benefit for total disability if it starts before the age of 45. The benefit amount progressively decreases 5% each year after age 45. e.g if disability starts at age 46, the benefit will be 95% of the $5,000, if disability starts at age 47, the benefit will be 90% of the $5.000 and so on. The ameritas and MassMutual policy do not have the lifetime benefit.
Also the metlife policy offers full coverage for claims related to mental/nervous and/or substance abuse disorders. The ameritas policy limits these benefits to 2 years for mental/nervous and/or substance abuse disorders
if i switch i will lose the lifetime benefit. I am not too concerned about the mental/nervous disorders as i have no history of addiction or mental health issues.
However the metlife policy has residual disability with only 24 m recovery benefit
I want to keep the coverage around $5000/month. My employer provides upto 15,000/month disability benefit (i understand the diff b/w employer disability policies and my own policy)
I am having a hard time deciding whether i should switch to save the $500-600 in premium per year although i lose some benefits also
If i switch to Ameritas or MassMutual and add the catastrophic disability rider, will that be a good replacement for the life time benefit feature of the metlife policy while allowing savings of $400 in premiums?
I would appreciate any advice
thanks
Lots of moving parts there huh? What does the independent agent preparing these quotes for you recommend?
Bear in mind that these are all high quality policies and the most important thing with disability insurance is to have something.
Try to determine what is most valuable to you. Is it the lower premium? If so, go with the cheapest policy. Is it the peace of mind of knowing you have the policy with the most bells and whistles? If so, then get the one with the most bells and whistles. But there is unlikely to be a “wrong” answer here.
One way to think about what the bells and whistles are worth is to equalize the premiums between the policies and see how much larger of a death benefit you could get for the same premium using the less expensive policy. Now- would you rather have a larger benefit or would you rather have the bells and whistles? Most of the time, I’d rather have the larger benefit.