4) Picking a Carrier

In the United States, there are the “Bix 6” insurance carriers that offer ample disability coverage for white-collar professionals. These carriers are: Guardian, Mass Mutual, Principal, Ameritas, Ohio National, and The Standard.

• Dos: You will want to select a carrier that has a good reputation for paying claims and strong financial strength ratings.
• Don’ts: Beware of carriers with extremely low financial strength ratings. One thing to look out for is the “COMDEX” score. If a carrier has a COMDEX score of less than 80, proceed with extreme caution.5) Definition of Disability

5)Definition of Disability

Simply put, this is the official language the insurance carrier uses to determine when in fact you are considered to be disabled under your plan.

• Dos: Make sure you get an “own occupation” plan that is “specialty specific”, or even better, based on your “actual duties”. Having the right Definition of Disability on your plan is crucial.
• Don’ts: There are many different types of own occupation coverage. Do not assume, just because you have an own occupation plan through your employer, that it is the right version. Often, it is not adequate.

6) Benefit Period

The Benefit Period is the length of time that you are eligible to receive your benefits. A plan “to age 65” is the most commonly selected option.

• Dos: Statistically, the majority of claims last less than ten years. With that said, you could consider a “10 year” benefit period option and it would save you significant premium.
• Don’ts: Unless you are already age 60 or older when purchasing a policy, you might not need a policy designed “to age 70.” A plan “to age 65” or “to age 67” should be sufficient and will save you premium dollars (especially since Social Security kicks in around this time (at least for now…)).

7) Elimination Period

Also known as “Waiting Period.” This is the amount of time from when a disability begins until you start to receive your disability payments. The most commonly selected option is 90 Days.

• Dos: The 180 day elimination period is certainly an option worth considering. This will drop the premiums by roughly 10% and is a great cost saving strategy (as long as you have an emergency fund stashed away that would cover you for six months).
• Don’ts: The “60 Day” elimination period is way too expensive. The cost increase doesn’t justify the advantages. You’d be better off spending the extra premium on either more benefit or an additional rider.

8) Future Increase Rider

This rider gives you the built in option to obtain more benefit in the future without having to go through any further health questioning.

• Dos: If you are currently a student, resident, fellow or young professional, then this rider is a must have. You will be earning a larger income someday and would surely want the built in option to protect that higher future income.
• Don’ts: If you are well into your career and are satisfied with your current level of benefit and don’t think you will need any more additional coverage in the future, consider dropping the rider from your plan to save premiums.

9) Residual Disability Rider

This rider protects you in the event that you are “partially” disabled and still earning an income to some degree in your occupation.

• Dos: Clearly, this is an important feature to consider as less than 1% of all policies are written without this rider. It is a highly recommended rider in almost all scenarios (especially if you are self employed, private practice, or independent contract).
• Don’ts: It’s easy to fall into the trap of thinking that you’ll only need a plan for “total” disability scenarios and forego this rider. It would be extremely risky. Unless you are 100% completely disabled from you profession, you would receive no pay out unless you had this rider on your plan.

10) Inflation Protection

Also known as the “COLA” rider. If you have this rider on your plan, it would increase your benefits each year you are disabled so that your benefits keep up with inflation

• Dos: The younger you are, the more time this rider has to be impactful. Many residents and students choose this rider because of the many years ahead of them in their career.
• Don’ts: If you are an older professional, it could be argued that you do not need this rider. If you have it on your plan, consider dropping it and the premiums will go down at that time.

11) Catastrophic Rider

This rider is designed to pay you an additional monthly benefit on top of your base benefit if your disability situation meets the criteria to be considered “catastrophic.”

•  Dos: The cost of this rider is relatively inexpensive (typically less than $10 extra per month) and can provide you with up to $8,000 worth of additional monthly benefit. A good value indeed.
• Don’ts: This rider is not crucial to have on your plan. A very small percentage of claims actually get classified as catastrophic. If the cost of all the riders is adding up, this might be the first one to let go.

12) Student Loan Rider

It’s no secret that medical professionals and attorneys carry some of the highest student loan debt of any other occupations. This rider will reimburse you for the cost of your student loan payments on top of providing your regular monthly benefits.

• Dos: Consider adding it to your plan for the first few years of your early professional career. If you’re able to pay down the student loans quicker than expected, great! You can drop the rider and your premiums will go down at that time.
• Don’ts: Obvious. If you don’t have student loans, this rider is completely unnecessary.If you’ve made it this far, you should have a good head start on disability plan options and what to look out for. Make sure to work with an independent insurance agent who can steer you in the right direction. You can learn more and request quotes here

If you’ve made it this far, you should have a good head start on disability dos and don’ts,  plan options, and what to look out for. Make sure to work with an independent insurance agent who can steer you in the right direction.

You can learn more and request quotes here .