True Own Occupation or Own Specialty Disability Insurance – provides tax-free coverage from now until retirement should a physician suffer any sickness or injury that prevents them from working in their medical specialty while also allowing them to collect their full benefit if they continue to work in another occupation. Currently, only six disability carriers offer this type of coverage to physicians: Ameritas – Guardian – Principal – The Standard – Ohio National – and Mass Mutual
Enhanced Partial Disability – Provides a tax-free supplement to income you are earning while you are disabled and earning less than 85% of your prior earned income while you are still working in your medical specialty.
Cost of Living Protection – Provides inflation protection while you are disabled. Your tax-free monthly benefit will increase every year in an effort to keep pace with inflation.
Future Purchase Rider – Allows you to increase your coverage in the future without medical underwriting so long as your income justified the increase.
Last week I sent an email to the husband (the cardiologist) reminding him of his Future Purchase Rider and asking him what his new income was. Here was his exact email response:
Thank you for getting in touch. My wife, whom you also sold the same disability insurance policy, is actually about to file her first claim since she has been asked by her oncologist to give up interventional radiology given her recent lymphoma diagnosis and to limit further radiation exposure. This has led us to think that it is more essential than ever to increase my disability policy in case of any catastrophe that may befall upon me. Any chance you availability to chat tomorrow after 2 pm?
I immediately picked up the phone and when he answered, I expressed my sadness for his wife’s recent medical diagnoses and then immediately asked him what his wife’s current income was. His response – “just over $400,000.” Her current monthly benefit was still just $5,000 per month, they must have forgotten that she was paying for the right to increase her disability benefit by having a future purchase rider. As I pointed out above this rider allows you to increase your disability coverage prior to filing a claim, regardless of your health, so long as your income justifies the benefit amount. An immediate sense of relief was present in his response and tone. He told me that they were scared because for the last year she had been earning so much money and they thought that they were going to have to cut major corners in their new lifestyle because her disability benefit was so low and nearly 100% of her income came from her ability to work as an interventional Radiologist. He told me they were planning on filling disability as fast as possible and rushing treatment just to get her to a point where she could at least read images at home so they can supplement the money they needed just to cover their bills.
He was extremely grateful that I reminded him of this rider on his wife’s policy and expressed an overwhelming sense of relief that his family could now afford to allow his wife to take the time she needed to receive treatment and get better without the stress of having to rush back to work.
Since his wife has not yet started missing work, we immediately rushed to submit copies of her current income documents as well as completing the financial application to increase her current monthly benefit from $5,000 per month tax-free to 15,000 per month tax-free.
Things are going to work out for these two physicians financially and I’m very grateful that in this situation our timing was perfect. Never wait until its too late to increase your disability coverage. Your benefit amount should always match your income and if you purchased an own occupation residency package from me you’ll always have the ability to increase your coverage without medical underwriting.
Please feel free to schedule a call with me if you want to learn more.