Larry Keller
[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 Berkshire, Ameritas, and Standard. We have no financial relationship.]
Berkshire Occupation Class Upgrades
In an effort to help their agents and brokers be even more successful in the medical marketplace, Berkshire has upgraded the following physicians from a 4M to a 5M occupation class:
Endocrinologists- Geriatricians
- Hematologists
- Oncologists
- Hospitalists
- Neonatologists
- Nephrologists
- Pulmonologists
- Rheumatologists
[Editor's Note: That means if you are one of these specialists, and recently passed on a Berkshire policy you liked because it cost significantly more than that of another company, then you might want to take another look. The higher the occupation class, the lower the premium.]
Berkshire Preferred Occupation Discount (POD) Introduced
A new Preferred Occupation Discount has been introduced providing a 10% savings to Family Practice Physicians, General Practice Physicians and Internal Medicine Physicians along with all 3M surgeons except OMFS and Orthopedists. Please note that this discount DOES NOT apply to Otolaryngologists, OB/GYNs, and 4M surgeons such as Urologists, Ophthalmologists and Dermatologists.
The Preferred Occupation Discount can be combined with other discounts (such as the Student and Resident Discount but may not be available in all states for all products. At the time of this writing, the POD is not available in Colorado, Florida, Ohio or Vermont (also New Jersey for Disability Overhead Expense and/or Disability Buy-Out policies).
While Berkshire typically does not like to compete on price, this change, along with their innovative policy provisions and robust product offering (the ProVider Plus and ProVider Plus Limited) will help them compete more favorably against companies like MetLife and Princpal for certain medical specialties.
Ameritas Modifies its Future Increase Option (FIO) Rider
Additional contractual enrichments are being added to the Future Increase Option Rider. The FIO has been enhanced to allow clients through the age of 40 to exercise the full amount of this rider subject to financial justification and Issue & Participation (I&P) Limits. This is much more liberal compared to the previous ½ of the original base monthly benefit of the policy.
Off-Anniversary FIO requests will also be considered subject to the following criteria:
- The insured must have experienced a significant increase in income (defined as 20% or greater) or lost his/her group Long-Term Disability (LTD) coverage due to a change in benefit eligibility.
- Must be requested within three years from the original policy issue date or within one year of graduating from a residency/fellowship.
- The policy must not contain the Automatic Increase Rider (AIR).
- The request must be received within 90 days of a triggering event.
- The request is limited to one per year.
These changes address both the individual disability policies under the DInamic Foundation series pertaining to the Future Increase Option (FIO) Rider, as well as, the DInamic 2000 series pertaining to the Guaranteed Physical Insurability Rider (GPIR).
This is a great change for those young physicians that have had significant increases in income but were restricted in the amount of FIO or GPIR that could be exercised due to the contractual language.
Standard
Standard recently announced an increase in occupation class from 3P to 4P for Otolaryngologists, Otologists and Urologists. This is a significant change and like Berkshire’s 4M to 5M occupation class upgrade generally, translates to a significant premium savings. Additionally, for these medical specialties, higher monthly benefits with Standard may now also be available.
Is this information useful to you? Questions? Comment below!
Thanks for the update. I consider this useful information.
Thank you!
Although not in this update, MetLife’s Income Guard Is now available in Maryland & Vermont.
Does the speciality upgrade benefits extend to MD who already own a guardian disability policy?
Thanks
Only if it was purchased very recently.
However, if your policy contains an FIO Rider, when it is exercised, you would receive the more favorable occupation class.
Your other option would be to apply again and do an “internal replacement” of your existing policy.
Thank you for all the information regarding Disability Insurance. In addition to this, I am wondering on the need for Overhead Insurance as I have a solo private practice. Any thoughts on this?
While your personal disability policy will provide you with income to meet your personal expenses, if you are a sole practitioner and are responsible for the fixed expenses associated with your practice, you should absolutely purchase Disability Business Overhead Expense (BOE) insurance.
This type of policy can provide you with benefits payable after 30, 60 or 90 days for a long as 30 months (depending upon the carrier chosen).
Keep in mind while the premium rates for your personal DI coverage are not income tax-deductible, the premium rates for BOE are income tax-deductible as an ordinary and necessary business expense.
While the BOE policy’s benefits are taxable as a result, since you are paying business expenses, they are deductible again, so the result is tax neutral.
In your post you mentioned “A new Preferred Occupation Discount has been introduced providing a 10% savings to Family Practice Physicians, General Practice Physicians and Internal Medicine Physicians along with all 3M surgeons except OMFS and Orthopedists.”
My question is, what happens to Orthopaedic Surgeons whose elective practice is solely hand/upper extremity? Would they qualify for the POD even if the have general orthopaedic responsibilities while on-call? Thank you.
Unfortunately, even orthopedic surgeons that have limited their practice to surgery of the hand and upper extremity, do not qualify for the Preferred Occupation Discount.