How to Find Quality in Disability Insurance
David H. Shantz
Vice President of Group Special Accounts
Great-West Life & Annuity Insurance Company, Greenwood Village, Colorado
Because of the many variations, buying a disability insurance policy can be challenging. If you are like most dentists who value quality, you will insist on the best protection you can afford.
Own Occ: The Gold Standard
To discern quality in disability insurance, begin with the definition of disability, which can differ dramatically from plan to plan. Look for policies that define disability as the inability to perform the normal duties of your own occupation (ie, clinical dentistry). For example, if a back or wrist injury prevents you from working as a dentist, you would be eligible to collect benefits. In contrast, with an “any occupation” definition of disability insurance, the insurance company is only obligated to pay benefits if you are unable to perform any occupation. An injury or illness could force you to leave dentistry for a much lower paying profession, with no compensation from your policy. The result is that your standard of living could be seriously compromised.
Although it is more expensive, most financial experts recommend “own occ” disability protection. If cost is an issue, consider saving on premiums by selecting a longer waiting period or forgoing options you could add later.
The Best in “Own Occ”
Also be aware that not all “own occ” policies are created equal. As you comparison shop, look for:
No benefit reduction if you choose to earn other income.
If you are disabled from clinical dentistry but earn income in another job, you do not want that other income to offset what you could collect in disability benefits. For example, under the American Dental Association (ADA)’s Income Protection Plan, a totally disabled dentist can collect full monthly benefits even if he or she chooses to work in another occupation.
Benefits to a high age.
Some policies limit the “own occ” definition of disability to just a few years and then change it to an “any occ” definition, forcing you to meet a more stringent standard to receive benefits. A top-quality plan will pay “own occ” benefits to age 65.
Residual (or partial) benefits.
Not all disabilities are total or permanent. If a disabling condition means you can only work as a dentist on a part-time or restricted basis (as defined by your policy), you will want your insurance to supplement your reduced earnings. The most generous policies pay benefits for a partial disability whether you return to work part-time after a total disability or are never totally disabled.
Other Hallmarks of Quality
Quality can be evidenced in other ways as well. Look for a provision—either built in or optional—that allows you to add coverage without having to provide proof of good health. In addition, consider a cost of living adjustment (COLA) feature, which increases benefit payments after you are disabled to keep pace with inflation. A plan’s position on certain types of disabilities also may be important; for example, seek a policy such as the ADA plan that will pay long-term benefits for mental/nervous disorders. Many plans limit benefits for these conditions to just 2 years.
The Bottom Line
Do not hesitate to shop around to find the best coverage for your insurance dollar. If a disability ever strikes, you will be glad to have a top-quality plan.
Note: This article does not constitute legal or financial advice. Please seek professional input as appropriate to your situation.
Great-West underwrites and administers the ADA Insurance Plans. To learn more, call 888-463-4545. Information on the ADA Income Protection Plan (Group Policy # 1105GDH-IPP) can also be found at www.insurance.ada.org.