Choosing the Right Insurance Company Is Key

Disability insurance is a type of coverage that provides income in the event a worker is unable to perform their work and earn money due to a disability. For doctors, this type of insurance is particularly important given the physical and mental demands of their profession. This glossary entry will delve into the specifics of disability insurance for doctors, with a focus on the role of the insurer in providing this coverage. As a doctor it's important to understand which is the best insurer (beyond price) that can give you the appropriate contract and policy for your specific medical specialty. 

Insurance companies play a crucial role in the provision of disability insurance. They are responsible for assessing risk, setting premiums, and paying out claims. Understanding the role of the insurer in this process can help doctors make informed decisions about their disability insurance coverage.

Role of the Insurer

The insurer's primary role is to provide financial protection against the risk of a disability that prevents a doctor from working. They do this by offering policies that pay a monthly benefit if the insured doctor becomes disabled and is unable to work.

Insurers also assess the risk of disability. This involves evaluating the doctor's age, health, lifestyle, and occupation. Based on this assessment, the insurer sets the premium - the amount the doctor must pay to maintain the insurance coverage.

Underwriting Process

The underwriting process is how insurers assess risk. It involves a detailed examination of the doctor's medical history, current health status, and lifestyle factors. The insurer may also consider the doctor's specialty, as some medical fields carry a higher risk of disability.

Once the underwriting process is complete, the insurer will classify the doctor into a risk category. This category determines the premium rate. Doctors with a higher risk of disability will typically pay higher premiums.

Policy Issuance

Once the underwriting process is complete and the premium is set, the insurer issues the policy. The policy outlines the terms and conditions of the coverage, including the amount of the benefit, the waiting period before benefits begin, and the definition of disability.

It's important for doctors to thoroughly review the policy before accepting it. Any questions or concerns should be addressed with the insurer or an insurance broker.

Types of Disability Insurance Policies

Insurers offer various types of disability insurance policies. The most common are own-occupation and any-occupation policies.

Own-occupation policies provide benefits if the doctor is unable to perform the duties of their specific medical specialty. Any-occupation policies only provide benefits if the doctor is unable to work in any occupation for which they are reasonably suited by education, training, or experience.

Own-Occupation Policies

Own-occupation policies are generally more expensive than any-occupation policies. This is because they provide broader coverage. A doctor with an own-occupation policy could receive benefits even if they are able to work in a different medical specialty or occupation.

There are variations of own-occupation policies. Some provide benefits if the doctor is unable to perform the duties of their specialty, even if they are working in another occupation. Others only provide benefits if the doctor is not working in any occupation.

Any-Occupation Policies

Any-occupation policies are less expensive than own-occupation policies. However, they provide narrower coverage. A doctor with an any-occupation policy will only receive benefits if they are unable to work in any occupation for which they are reasonably suited.

This means that if a surgeon, for example, becomes unable to perform surgeries but can still work as a general practitioner, they would not receive benefits under an any-occupation policy.

Claim Process

If a doctor becomes disabled and needs to make a claim, they must notify their insurer as soon as possible. The insurer will provide a claim form that the doctor must complete and return. The form typically requires information about the doctor's disability, treatment, and work history.

The insurer may also require additional documentation, such as medical records or a statement from the doctor's employer. Once the insurer receives the completed claim form and any required documentation, they will review the claim and make a decision.

Claim Approval

If the insurer approves the claim, they will begin paying benefits after the waiting period specified in the policy. The waiting period, also known as the elimination period, is the time between the onset of disability and when benefits begin. It typically ranges from 30 to 180 days.

The insurer will continue to pay benefits as long as the doctor remains disabled, up to the maximum benefit period specified in the policy. This period can range from a few years to until the doctor reaches the age of 65 or 70.

Claim Denial

If the insurer denies the claim, they must provide a reason for the denial. Common reasons include a determination that the doctor is not disabled, that the disability is due to a pre-existing condition not covered by the policy, or that the doctor did not provide sufficient documentation to support the claim.

If a claim is denied, the doctor has the right to appeal the decision. The appeal process varies by insurer and may involve a review by an independent third party.

Policy Provisions

Disability insurance policies contain several provisions that doctors should be aware of. These include the elimination period, the benefit period, and the definition of disability.

The elimination period is the time between the onset of disability and when benefits begin. The benefit period is the maximum length of time that benefits will be paid. The definition of disability determines when a doctor is considered disabled and eligible for benefits.

Elimination Period

The elimination period, also known as the waiting period, is the time between the onset of disability and when benefits begin. It typically ranges from 30 to 180 days. The longer the elimination period, the lower the premium.

Doctors should consider how long they could manage without income when choosing an elimination period. They should also consider their savings, other sources of income, and any employer-provided disability benefits.

Benefit Period

The benefit period is the maximum length of time that benefits will be paid. It can range from a few years to until the doctor reaches the age of 65 or 70. The longer the benefit period, the higher the premium.

Doctors should consider their career plans and retirement goals when choosing a benefit period. For example, a young doctor who plans to work until age 70 may want a policy with a benefit period that lasts until that age.

Definition of Disability

The definition of disability determines when a doctor is considered disabled and eligible for benefits. There are generally three types of definitions: own-occupation, any-occupation, and transitional or modified own-occupation.

Own-occupation policies consider a doctor disabled if they are unable to perform the duties of their specific medical specialty. Any-occupation policies consider a doctor disabled if they are unable to work in any occupation for which they are reasonably suited. Transitional or modified own-occupation policies provide benefits if the doctor is unable to perform their specialty and is not working in any other occupation.