Larry Keller
[Editor's Note: This is a post in a continuing guest series by Lawrence B. Keller, CFP®, CLU®, ChFC®, RHU®, LUTCF keeping us up to date about the ever-changing disability insurance marketplace. We have no financial relationship.]
MetLife
In my last guest post, I revealed that MetLife had introduced their Income Guard policy in the majority of states. Since that time, it has been approved in all but six states (California, Colorado, Massachusetts, Maryland, Ohio, Virginia and Vermont). Again, this provides Anesthesiologists and Emergency Physicians (in the above states with the exception of California) a unique opportunity to purchase a policy from MetLife that covers disabilities related to mental and nervous conditions in the same way as any other accident or illness.
Additionally, MetLife has also upgraded the following physicians to their best medical occupation class (6M): Allergists, Family Practice Physicians, Gastroenterologists, General Practice Physicians, Gerontologists, Hematologists, Internal Medicine Physicians, Neonatologists, Nephrologists, Pulmonologists and Rheumatologists. For many of these physicians, this enhancement can mean up to a 25% savings. They now join Pediatricians, Oncologists, Neurologists and Physical Medicine & Rehabilitation Physicians, which were upgraded previously.
Ameritas
Ameritas has increased the competitiveness of their Young Professionals Program. Now, all physicians, within two years of graduation from residency or fellowship, can purchase up to $7,500 month of disability insurance, regardless of their earned incomes. Up to $7,500 month of Future Increase Option (FIO) Rider is also available (allowing an insured to reach $15,000 month, the maximum that Ameritas will issue to physicians). However, keep in mind, that any in force disability benefits (either individual or group LTD) would offset this amount. This is not the case for some of the other carriers.
Berkshire
Berkshire recently introduced an optional DI Student Loan Protection Rider that can be added to their ProVider Plus and ProVider Plus Limited policies.
This rider reimburses the insured for $500-$2,000 per month (in addition to the normal Issue & Participation limits) towards student loan payments in the event of Total Disability. 90 and 180 day waiting periods are available with benefits periods of 10 years (available to those insureds ages 18-40) or 15 years (available to those insureds ages 18-45).
While no loan documentation is required at the time of application to purchase the rider, evidence of student loans and payment are required as part of the proof of loss at the time of claim in order to receive benefits. This rider is also limited to student loan debt only and student loans restructured as non-student loan debt (such as into a mortgage or business loan) will not qualify.
Student loan debt from both undergraduate and graduate education can be covered. The debt may be through a government student loan program or a chartered bank or lender. This rider is available to professionals “pursuing or holding an advanced degree”. This includes those pursuing or holding a degree at the master’s level or higher. Professional certifications and designations do not qualify as advanced degrees. As of this writing, this rider is not approved in California, Florida, Montana, New York, Ohio, Pennsylvania or Vermont.
Questions? Comments? Do you think a student loan protection rider is a good idea? Sound off in the comments section!
Wondering if I can get your input. I am 38 female surgeon. I have general disability insurance through the hospital, but figure I should get own occupation coverage. I was given a quote of $3386/yr for $5000 total diability with own occupation rider with 90 days elimination period. It’s 5.64%. Is this a good quote or should I keep looking? $5000 is small amount and after The calculation for residual disability rider, I may not get the maximum amount if i become disable. So is this really a good way to spend this amount of money? Thanks.
In which state are you located?
You should be looking for a policy with a unisex rate and permanent premium discount and from the premium amount you list, it does not sound like that is the quote in which you were provided.
Does the illustration that you were provided include a COLA and/or Future Increase Option Rider?
If you would like to email me the illustration of coverage that you were given for review and some other options, feel free to do so.
I am in NYC. No cola, no future increase,
The odds are very good that you can do much better. I have set up and have access to several multi-life discounts with unisex rates and a permanent premium discount.
If you email me your contact information, including the name of your employer, I will be able to provide you with other options to consider.
Hi,
I and my fiance[female] are both child psychiatrists and are finishing fellowships this June[2014]. We are looking at disability insurance and have been recommended Guardian Provider Plus for me and Principal for her.
Any suggestions or thoughts?
Thanks,
Gaurav.
I’m not qualified to give you a second opinion and I suspect that the agents who read this will probably require more info to do so. I suspect both of those policies are probably good, solid policies. I suspect the recommendation for principal is due to their favorable “unisex” policies.
WCI. You are correct. For female physicians, if a unisex rate and discount is available, Principal will be the lowest cost option in the marketplace.
As Michael stated, Berkshire was probably recommended due to the full coverage for disabilities related to mental and nervous conditions such as anxiety, depression, stress and burnout.
Keep in mind that Student and Resident or association discounts may also be available for Guardian. This would provide a 10% discount off of gender distinct rates. This would certainly be beneficial in terms of lowering Guardian’s cost.
Gaurav,
Every circumstance is a bit unique, so you should still be sure to review multiple options with your agent and validate the recommendations made. That said, this does sound like a fine recommendation. Guardian is one of the few major carriers still offering Psychiatrists an Own-Occupation policy that does NOT restrict the benefits payable on claims related to mental/psychiatric conditions, and is typically well priced. Standard is the other carrier, and MetLife in the few states where they still offer their old product. Principal is exceptionally attractive for your fiance, assuming she has access to the multi-life discount through them. If not, a discount can always be created. Principal’s coverage will not be as comprehensive as Guardian’s ProVider Plus, but the pricing difference is difficult to bypass for females. If you too are interested in sacrificing a few features, you could possibly reduce your cost by selecting Principal’s policy or Guardian’s ProVider Limited.
The final recommendation would always depend on the state in which you live, the GME program with which you are affiliated and how you feel about select features within these policies.
Great advice. Thanks Michael.
Gaurav.
Hi,
So I’m ED physician practicing in California, but initially trained in Chicago. I purchased a disability insurance policy out of residency through Principal while in Chicago for $3500/month but did not qualify for a future increase rider.
Fast forward to now where I live in California, and want to increase my coverage (to at least $12500/mo) to reflect my higher income and have a dependent baby boy. I spoke with an agent who recommends Guardian, but he looked over my Principal policy and states it is not specialty specific because the initial agent did not check “regular occupation”, and recommends getting rid of the Principal coverage if I can get the Guardian policy. *groan*
Looking over the Principal policy, it defines “Total Disability” as :
solely due to Injury or Sickness:
1. During Your Occupation Period
a) You are unable to perform the substantial and material duties of Your Occupation; and
b) You are not Working.
2. After the Your Occupation Period You are unable to Work in any occupation You are reasonably suited to by Your education, training and experience.
3. Both during and after the Your Occupation Period, You satisfy the requirements of the Claim Information Section.
So, it sounds like the policy will not consider me disabled if I am able to do ANY work in ANY specialty (e.g. insurance office job), not just an ED physician. It sounds like if I can work part-time in one of these other jobs, the policy will deduct my benefit from that salary which will likely be a minimal net benefit amount.
Long post, and may need to be answered by Larry or another agent, but does the advice to get rid of my Principal policy (if I qualify for Guardian or new policy) a sound one?
I’ve been paying into the Principal policy for 8 years with a good initial discounted rate, and want to make sure before I get rid of it especially since a new Guardian policy will cost me MUCH more (about 9K/yr for 12k/mo coverage) at my current age (almost 40 y/o).
New grads take heed: it is important to find an ethical/experienced agent as these disability policies are complex.
Thanks in advance.
Peter
Peter-
The first thing to do is to see if you can add the Regular Occupation Rider to your policy (it depends upon the policy series). Normally, in California, this rider is not available to 4A-M occupations (like Emergency Medicine). However, since your policy was purchased in Illinois, it may be an option.
You are now 8 years older so, keep in mind, you don’t have to replace your current Principal policy (assuming the Regular Occupation Rider is not available) as new policies will be more expensive – especially one purchased with a discount several years ago in Illinois compared to those in California. You can always decide to keep what you have and simply supplement it with another carrier to bring your total monthly benefit up to a level in which you feel comfortable.
Either way, you should also look at Ameritas and Standard’s policies (compared to Berkshire). Standard’s “new” Protector Platinum policy series has now been approved in California. As such, full coverage for mental and nervous conditions is available. This can be important – especially if the difference in cost from one policy to another is not what you would deem to be “significant”.
Standard also allows certain agents to provide their (potential) clients with a 10% permanent premium discount (known as the “Preferred Producer Multi-Life Discount). Ameritas also has discounts available (as does Berkshire in certain situations).
Keep in mind, under your current Principal policy, if you are disabled out of Emergency Medicine, you will never be forced to work in another occupation or medical specialty. However, if you choose to, and your policy includes a Residual Disability Rider, benefits would potentially be payable proportionate to your loss of income.
So, at the end of the day, it will all come down to your individual needs and goals relative to the cost of replacing or supplementing your current Principal policy.
Hope this helps.
You can also potentially increase the monthly benefit on your Principal policy using an adjustment application. This would allow you to take advantage of the same rate book that was in effect at the time the original policy was purchased, including any applicable discounts.
The increase in monthly benefit would be subject to full underwriting as if you were going to be purchasing a new policy thought. The same would be true if you were able to add the Regular Occupation Rider (although the Regular Occupation Rider addition would not be subject to financial underwriting).
I work at 2 hospitals, 2/3 of my work time at one and 1/3 at another. For the 2/3 one, I am salaried and pay for an employer-sponsored disability plan. I am per diem at the other hospital and may increase my hours there further. I am not eligible for their disability insurance plan. I feel like I should be getting own-occupation disability insurance on those hours as well? What considerations should I be thinking about, where do I look, and how do I know if I am getting a good deal? Thanks.
Also keep in mind you don’t need to “cover the hours.” You need to figure out how much coverage you need, then get that coverage. You may only need the policy you’ve got, but I recommend you cover at least some of your need with a good, portable, individual policy. Group policies have significant deficiencies when compared to an individual policy from one of the big six. They’re generally cheaper because they’re less likely to pay.
Max-
The insurance carriers will look at your total earned income minus your existing coverage to determine the amount of individual coverage available.
Are you paying for the employer sponsored group LTD plan with pre-tax or post-tax dollars? If pre-tax, generally, the benefit amount will be discounted by 25% as the benefit would be taxable upon receipt.
Are you paid as an employee (W2) or as an independent contractor (1099) for the per diem work?
You can then add an increase option to the policy that will allow you to increase your coverage, regardless of your health, as your income rises. The same would be the case if you left your salaried position and lost your group LTD plan.
As stated before, you will want to look at several carriers to compare the policy provisions, as well as, the premium rates to make sure that you are making a well-informed decision regarding your coverage.
Your age, medical specialty and geographic location will all be factors along with the insurance companies Issue & Participation (I&P) Limits.
Thanks for the information. I am paid as a W2 at the second job and pay for disability insurance post-tax on my first job. I reviewed the details and it is own-specialty and includes partial disability.
What state do you practice in?
I am insurance licensed in every state and have clients across the country.
Depending upon your income at the second job, you may find that you are not eligible for all that much additional individual coverage so, keep in mind, that most policies use a multiplier of the base policy amount to determine the amount of increase option available (this will protect you in the event you leave the first job) or your income continues to increase in the second job.
Principal’s policy and Berkshire’s ProVider Plus Limited to not use a multiplier. As a result, depending upon your income and the amount of tax-free group LTD that you have, one of those might work well in your situation.