The purpose of disability insurance for a medical professional is to protect your income in the event of an injury or sickness preventing you from accomplishing your duties as a specialist. For doctors this can amount to over $10 million in future income owed to you.  Needless to say that is lot of money, which is why insurance carriers or companies have created protective barriers to minimize excess risk. The barriers are called exclusions and limitations, allowing the insurance providers to forgo paying a claim under certain circumstances. Because of the variability of exclusions between companies it is vitally important for prospective purchasers to read their policy.

With such ambiguity between companies it is important to note the few universal limitations within the Insurance Industry. The general exclusions include disabilities sustained from acts of war, felonies, and self-inflicted injuries. Just like any exclusion the purpose of these standard limitations serves to mitigate the risk faced by the insurance company. The exclusions appear straightforward which is why many insurance agents glide over them, failing to explain each exclusions true meaning. By not explaining these limitations properly, agents put their clients in harms way.  As specialists we feel that everyone should understand the true meaning behind these exclusions which is why we have included the following synopsis of each.

• Acts of War- This category may appear to be fairly straightforward, however there are a few claims that can be excluded under this category that are far from obvious.  War by legal definition is an ongoing unresolved conflict. This definition gives insurance companies incredible leeway to exclude claims under this category. Basic exclusions include injuries or sickness associated with acts of terrorism such as that displayed in Boston early this year.  In addition the definition affords Insurance Companies the right to exclude claims sustained during marches and any other demonstration due to civil unrest. For example these demonstrations could include controversies such as abortion rights, or same sex marriage.

• Felonies- This category of exclusions simply states if you claim disability from a felony which you have committed or attempt to commit, the insurance company has the right to forgo their payment of the claim.

• Self-inflicted injuries- Any self- inflicted damage to your body with the intention of defrauding an insurance company will not be covered.

A competent agent should read your policy with you to make certain you understand these and all other exclusions and limiting phrases in your policy.

For 26 years Income Protection Specialist, an independent advisor free from insurance company bias and control, has focused on educating specialist and helping them make the right decision for themselves and their family. Why trust anyone other than a specialist.

Most companies have hundreds of riders which individuals can attach to their disability policies. However, for residents and young doctors the most important of these is the guarantee of insurability or future insurability rider. When this rider added to a policy gives residents and doctors the right not the obligation to purchase more insurance in the future at future rates regardless of health. Why is this so important for residents? For starters, while in a residency doctors have very little income from duties in their specialty. For this reason insurance companies will only insure residents up to a certain benefit amount normally $5000 without proof of income. It is well known residency is a hard time and a lot can happen during that period health wise. The unfortunate truth is that many doctors do become uninsurable during this time period. The future purchase option gives young doctors the peace of mind that they will be able to increase their benefit in the future based on insurance company rules, without taking another health exam. This rider effectively negates the risk of becoming uninsurable during residency. The same can be said for young doctors in private practice. Many young physicians in private practice just like residents may not yet  have a sufficient income to qualify for the maximum benefit amount in their specialty class. Another possibility is that these young specialists may not be able to afford the maximum benefit at the time due to other financial obligations. As with residents, the future insurability rider gives these practicing specialist a sense of calm because they know they have the option to purchase more  benefit in the future. The best part of this rider is that  there is No BLOOD WORK, URINE ANALYSIS, or MEDICAL QUESTIONS REQUIRED, easing the stress on you regarding the securing your future. Protecting you in your specialty and creating a personalized plan has been our priority for 26 years. Our goal is to educate physicians so that they can make the best decision for them and their families. So Why trust anyone other than a Specialist to protect your future?

Specialist Protecting Specialist since 1987

If you are a self employed doctor or in a partnership type of arrangement with 4 or less members you bet you do!

Let’s imagine the typical pie chart.  With 4 in the practice each partner is responsible for 1/4 of the expenses.  If you are disabled and cannot pay your portion of expenses then what?

• Healthy partners are now paying 1/3rd of the expenses vs. 1/4th.
•  Secondly, their take home pay just decrease as a result of this.
• Thirdly, the relationship starts to breakdown.

When a partner is unable to pay his portion of the overhead the relationship between all involved is stressed and sometimes dissolves. Business Overhead Protection not only picks up the bills of the disabled but allows the continuity of the relationship to go on undiminished.  Also given that the premiums are so much less than traditional Disability Insurance and are tax deductible; it is only wise to have this protection in your overall portfolio.

If you are a Sole Proprietor there is no question that you need it!  Protecting your practice with a BOE Policy can save you from financial disaster.  Without BOE the financial liabilities of the practice will follow you home. This will cause undue tension within the home and often leads to bankruptcy.  By purchasing a plan you build a wall between your business finances and personal finances should a disability occur.

Like other types of Disability Income Protection, Business Overhead Expense Disability Insurance is best purchased while you are young and healthy.  This is when rates are the most economical.

When shopping for a disability policy, make sure to include a Cost of Living Benefit (COLA) in your shopping list.  Without such a benefit you will probably require another source of income in the event your claim becomes long term.

This benefit was designed to counteract the negative effects that inflation plays upon your disability benefit.  With the addition of the COLA rider your benefit will be adjusted annually after 365 days of disability and every 365 days thereafter.  It is normally calculated by the consumer price index. The CPI measures the increase in the cost of goods most commonly purchased by consumers from year to year. In other words it calculates the inflation faced by consumers in their typical purchases.

Each company will have their own version of the rider. Some may provide an annual adjustment of the fixed percentage on a per year basis determined from expected inflation. Others will use a benefit package that is compounded on an annual basis.  Whatever the case it is important to be aware that this vital option is available to you as a physician searching for the most appropriate protection.

written by: Stacia Musleh, Vice President

How a disability is categorized can make a difference on how a claim is handled.  In some plans a Mental Nervous and Stress related claim is limited to a 24 month maximum payout, where other policies may pay the claim without limitation to your age of 65. You don’t want to learn about this critical difference in definitions when you’re dependent on a monthly disability check.

The Mental Nervous and Stress/Nervous limitation is most commonly found in group/association policies but has now been showing up in some non-cancellable guaranteed renewable plans. Be aware that this category of claim is not limited to the major diagnosis’s such as schizophrenia or bipolar disorders.  It can include the following types of claims as well: soft tissue issues, fatigue syndrome, anxiety, emotional problems, Epstein-Bar, Attention Deficit Disorder,  Fibromyalgia and of course alcohol and drug related issues just to name a few.  Having such a restriction within your policy exposes you to limitations that may not be necessary, while costing more or the same as coverage that provides full protection.

What Physicians who are moving to, moving from or living in California need to know:

A lesser known fact is that 99% of all individual policies sold to physicians in California include this limitation. Therefore, if you plan on moving to California after your residency you need to secure a policy before you relocate.  Additionally, if you are completing your residency in California but plan on relocating to another state you should shop just prior to the end of your residency. Some companies will allow you to use your new established address in another state to apply for your protection, thus forgoing the limitation.

In conclusion when considering a policy you must be aware of the language and do your homework.  Limitations such as this work in the favor of the insurance companies and should be avoided at all cost if possible.