[Editor's Note: This is a guest post from Lawrence B. Keller, CFP®, CLU®, ChFC®, RHU®, LUTCF, a frequent contributor to the blog. This is another in his long-running series updating you on some of the intricate details of the disability insurance marketplace. This particular post deals with Ameritas and Lloyds of London. We have no financial relationship.]
Ameritas – Unisex Rates to be Discontinued
Effective April 1, 2014, unisex pricing will be discontinued for all fully underwritten multi-life, association (even those previously “grandfathered” and big case discount programs. This change will apply to all states except Montana, which requires unisex pricing for all policies and Ohio, which requires unisex pricing for all policies issued with a discount. Unisex pricing will continue to apply to all Guaranteed Standard Issue (GSI) cases and all existing policies that were issued with unisex pricing and a discount.
Again, this provides female physicians with the opportunity to save 40-50% off of the normal female rates. Therefore, if you have been presented with an illustration of coverage with a unisex rate and discount (other than in Montana or Ohio), the time to make your decision is now. Additionally, if you have not been presented with an illustration of coverage with a unisex rate and discount, the time to inquire if one is available to your via your employer or hospital affiliation is now – especially if you are in private practice.
Ameritas – Increased Participation Limits with Group Long-Term Disability Coverage
While the issue limit for Ameritas will remain at $15,000 month (the maximum monthly benefit that they will sell on their own) and their participation limit with other individual carriers will remain at $25,000 month, they will now participate up to $30,000 month for those physicians that have group Long-Term Disability (LTD) insurance inforce. This is true for all states, including California, which traditionally has had lower Issue & Participation (I&P) limits compared to other states.
Lloyd’s of London – Accelerated Benefit to Age 65 Disability Insurance Plan Introduced
Lloyd’s of London has introduced an “Accelerated Benefit to Age 65 Disability Insurance Plan”. The Accelerated Benefit to Age 65 plan was designed to provide an insured person with high-level coverage on top of any existing benefits while, at the same time, providing a benefit period that will provide income for the insured person to age 65. Since this policy is offered as an excess or supplemental policy, the insured person must have underlying group and/or individual disability coverage in force.
When the insured person becomes disabled and the elimination period is fulfilled, the insured person will begin receiving monthly disability insurance benefits. If the insured person is totally disabled for a period longer than 120 months, the Accelerated Benefit Payout provision will be triggered and the policy will pay the remaining monthly benefits to age 65 as a lump sum without any additional definition, which will include the Cost of Living Adjustment COLA), if the rider was purchased.
The policy has a 5-year term. The term of insurance is the time period during which the terms of the certificate or the rates charged cannot be changed by the Underwriters. On the renewal date following a Term of Insurance the underwriters reserve the right to refuse renewal or to offer renewal with different terms or rates.
Exclusions under the policy include suicide or intentional self-inflicted injury or poisoning; committing or attempting to commit a felony; taking illegal or non-prescribed drugs, or addiction or misuse of prescription drugs; alcohol abuse or addiction, or being under the influence of alcohol as defined by the vehicle code of the state or province in which the accident has occurred; mental and/or psychiatric disorders; conditions not disclosed during underwriting; pregnancy and pregnancy related conditions; nuclear, biological or chemical exposure as a result of terrorism or war; active participation in terrorism or war.
[Editor's Note: More information on purchasing disability insurance can be found in my series on disability insurance, which begins here. What did you think of the article? Do you find articles with this much detail useful? Would you consider adding a Lloyd's of London policy on top of your current policy? Comment below!]