Larry Keller

Larry Keller

[Editor's Note:  This is a guest post from Lawrence B. Keller, CFP®, CLU®, ChFC®, RHU®, LUTCF.  We have no financial relationship.]

Since my last disability insurance update, Berkshire has increased their Issue & Participation (I&P) Limits and introduced their broader ProVider Plus product offering (which includes the ProVider Plus Limited) in California.  MetLife has also introduced their Income Guard policy in the majority of states.


Berkshire increased the monthly benefit available to First and Second Year Residents from $4,000 to $5,000.  Additionally, the maximum issue limit for physicians and dentists has increased from $16,000 to $17,000 month.  The maximum participation limit with other individual disability insurance has also increased from $20,000 to $25,000 month (with the exception of the State of California).

In California, rates have increased across the board.  When combined with the new Mental and/or Substance-Related Disorders Limitation Discount (10%), sex-distinct level rates will generally be 4.25% higher.

A new occupational classification for all dentists and dental specialists (3D) has been created. As a result, rates for males will generally be 4.25% higher and female rates (especially for those female dentists under age 40) will be substantially higher (compared to the current 3M rates).

Perhaps, one the biggest changes is for those insureds that elect a graded (annually increasing) premium structure in order to minimize their initial premium outlay.  The initial graded premium rate has increased substantially.  So, for those looking to purchase a policy with a graded premium structure, the lower the initial premium rate, the better!

Rates have also been increased for all ProVider Plus products in the State of Arizona.  There is still time to lock into the “old” rates in both Arizona and Florida.  Applications submitted on or before May 24, 2013 will receive the “old” rates.  Beginning May 25, only the new rates will be available.


Medical and Dental Specialty Language Introduced

Metlife will consider the material and substantial duties they were performing, including those of a professionally recognized specialty in medicine or dentistry immediately prior to the start of their disability to be the material and substantial duties of their regular occupation.

Tail-End Waiver of Premium

If premiums are being waived and benefits have been payable for 12 months or more, MetLife will continue to waive any premiums due during the first 90 days after disability ends.

Residual Disability and Residual Disability with Recovery Benefit Riders

MetLife now offers three Residual Disability Riders (Basic Residual, Residual with Recovery and Enhanced Residual with Recovery).  All of them provide benefits if disability causes a loss of earnings of 15% or more (reduced from 20% under the Omni Advantage) compared to the insured’s pre-disability income. The addition of a recovery benefit extends the period that benefits are payable under the rider to include a period after total or residual disability where the insured has returned to work on a full time basis, performing all of the material and substantial duties of the his/her regular occupation, but continues to have an income loss due to the condition that caused the disability. Under the Omni Advantage, recovery benefits, if elected, were limited to a maximum of 24 or 36 months.  The Enhanced Residual with Recovery Rider also modifies the time or duties requirement within the definition of residual disability.  Finally, the riders that include recovery benefits also state that, during the first 12 months in which residual disability benefits are paid, the minimum monthly benefit for residual disability will be 50 percent of the monthly benefit for total disability.

Mental Disorder and/or Substance Use Disorder Mandated for Certain Specialists

Under the current Omni Advantage policy, disabilities due to a mental disorder or a substance use disorder are payable for the entire benefit period.  However, with Income Guard, those in occupational classes 5D (the new occupational class for Dentists) and 4M (Orthopedic Surgeons, OB/GYNs, Psychiatrists, Anesthesiologists, Emergency Physicians, Interventional Radiologists, Interventional Cardiologists) will be issued policies that include a mandatory rider which limits the maximum benefit period for disabilities caused by mental and/or substance use disorders (MDSUD) to 24 months over the life of the policy, unless the insured is confined to a hospital, when the “specialty your occupation” language is included.   A 10% premium reduction will apply with the inclusion of this MDSUD Rider.  However, it will only apply to certain elements of the premium and not the entire premium. As a result, there is a huge incentive for Anesthesiologists and Emergency Physicians to purchase the “old” (Omni Advantage) policy while it is still available as the only other company that combines a true “Own-Occupation” definition of total disability with full coverage for mental and nervous conditions (for those specialties) is Standard Insurance Company. Unfortunately, in most states (with the exception of California, Florida and Vermont), Standard places Anesthesiologists in their 2P occupational classification (unless they are Pain Management Physicians) and, as a result, are subject to a 25% surcharge compared to all other medical specialties. Once the Omni Advantage is no longer an option, Standard will be a more viable alternative for Emergency Medicine Physicians (compared to Anesthesiologists), due to the more favorable occupational classification (3P) that they are assigned.

Limited Benefit Period While Outside the United States

Currently, under the Omni Advantage, claims are paid outside the United States with no limitation.  Under the Income Guard, while an insured is outside the United States, its possessions and Canada, benefits will be paid for a maximum of 24 months for all periods of disability combined during the insured’s lifetime.  This means that after the July 31st deadline (for those states in which Income Guard is already approved), in most cases, MassMutual will be the only company providing an insured the ability to receive benefits outside of the United States with no restrictions.  

Introduction of the 3% Compound Cost Of Living Adjustment (COLA) Rider

This Cost of Living Adjustment (COLA) rider increases the monthly benefit payable for disability by 3% of the monthly benefit payable from the previous year.

Introduction of the COBRA Reimbursement Rider

This rider reimburses the insured for COBRA premiums paid while the insured is disabled, not to exceed the monthly maximum (Up to $2,000 per month for a maximum 15 months per disability).  The only other company that offers a similar policy provision is Ameritas, which has it built into their contract at no additional cost.

For states in which MetLife Income Guard is currently approved on May 6, 2013 (currently all but California, Colorado, Connecticut, Florida, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, North Carolina, Ohio, Rhode Island, South Carolina, Vermont, and Virginia,) the last day an Omni Advantage application will be accepted is July 31, 2013.  Finally, remember that policy provisions are subject to state availability.  Also note that the descriptions above are intended as brief summaries of actual policy provisions and you should refer to a specimen policy for complete policy terms and provisions.

In the market for disability insurance?  Recently bought some?  Which policy did you buy?  Comment below!