All disability insurance policies have a Definition of Total Disability. This provision dictates when a total disability benefit would be paid

A policy with medical specialty language will limit the occupation of the insured to that of their medical specialty. The specialty happens to be defined based on “material and substantial duties”. It is possible based on material and substantial duties for a disabled physician to receive benefit while returning to another specialty (per the specific details of their policy)

This provision allows the insured to receive disability insurance benefits for partial disabilities. Not all disabilities are total. If there is a sickness or an injury that leads to a loss of income within the insured's original occupation, they can receive a residual/partial payment under the terms of the contract.

The Recovery Benefit allows the insured to continue to receive payments from the disability insurance policy when they return to work and are no longer disabled. The insured could find that they return to work and are making less than they were prior to the disability

The Recovery Benefit continues to pay them until they return to a percentage of pre disability income, usually 80% or 85% of pre-disability earnings, or for a maximum period of time (6 months, 24 months, 36 months, etc), or until the end of the regular benefit period.

Most people expect to see income increase during their working years.

With this provision, the insured can apply for more disability insurance and can increase their monthly benefit without having to worry about providing further medical proof.

This is a very important provision to have for any young professional and is perfect for a medical or dental resident/fellow/student that expects to see a large increase in income.

The increase would be approved based solely on actual income and other disability insurance benefits that are in place (along with current issue and participation limits at the insurance company) and changes in health will not be considered (just as long as the insured is not disabled at the time that the future increase options are applied for).

All policies limit the ability to exercise future increase options beyond a certain age. After the given age has been reached, any further increases in the monthly benefit would simply require a new application and regular medical underwriting (like is done when the policy is purchased).

This provision allows the monthly benefit that is received under the terms of the disability insurance policy to be increased while the disability continues.

If a cost of living adjustment rider is purchased, the COLA rider increases the benefit on the anniversary of the policy each year.

The difference in the amount of total benefit that is received under the policy with cost of living vs a policy that does not have a cost of living increase can be substantial.

The COLA rider can be removed from the policy if the insured chooses to drop it.

This provision allows the insured to receive additional benefit payments that are paid above and beyond the basic monthly benefit for total disability.

A catastrophic disability benefit is paid if the insured loses the ability to do at least 2 of the 6 activities of daily living (ADLs) - similar to Long Term Care Insurance.

• Activities of Daily Living (ADLs)
• Bathing
• Continence
• Dressing
• Eating
• Toileting
• Transferring

Claims for anxiety, depression, substance abuse, and alcohol dependence can be just as much of an issue as a back injury or cancer for the insured.

Pay close attention at the provision that relates to how these types of claims will be handled.

We typically see plans that limit the lifetime claim payments for these types of claims to 24 months. Other plans do not limit these claims.

Insurance companies can operate in a way where they issue stock to stockholders (Stock) or they can be a Mutual Insurance Company.

Mutual insurance companies do not have stockholders.

A.M. Best is a U.S.-based rating agency headquartered in Oldwick, New Jersey, that focuses on the insurance industry

Both the U.S. Securities and Exchange Commission and the National Association of Insurance Commissioners have designated the company as a Nationally Recognized Statistical Rating Organization (NRSRO) in the United States.

Non-Cancellable and Guaranteed Renewable

This is the strongest possibility as far as renewability goes. It guarantees you that after you place a policy in-force that there will be no changes to your premium schedule, your monthly benefits, or your policy benefits to age 65 or a certain age.

The insurance company legally can not change a thing unless you want them to. Many people do not have a guarantee that their income will never go down again, under a Noncancellable policy even if your income goes down later in life, if you are totally disabled the company will pay you the total disability benefit you originally placed in-force.

Under a Non-Cancellable policy even if you changed jobs from being a white collar, low-risk occupation to a professional weight lifter the company could not change your benefits for the worse.

Guaranteed Renewable

With this renewability provision, the insured can continue to own the policy until the end of the renewability period (typically to age 65 or 67). The company can change the premium and can change the terms of the contract but it needs to be done on a class wide basis.

They can change the premium by state, policy year, or occupational class with approval from the state.

Individual Disability Insurance policies tend to be either Guaranteed Renewable or Guaranteed Renewable AND Non-Cancelable

Guardian Life Insurance Company of America
Home Office - New York, NY
Founded - 1860

Principal Life
Home Office - Des Moines, Iowa
Founded 1879

Mass Mutual Life Insurance Company
Home Office - Springfield, Massachusetts
Founded 1851

Ohio National Life Insurance Company
Home Office - Cincinnati, Ohio
Founded 1909