Frequently Asked Questions
How much does Disability Insurance Cost?
Expect to pay around 1-3% of your salary for a high quality Disability Insurance Plan depending on what riders you select. See Policy Options.
What is the Definition of Disability?
Guardian’s ProVider Plus offers a true own-occupation definition of total disability. It considers you to be totally disabled if, solely due to injury or sickness, you are not able to perform the material and substantial duties of your occupation (or occupations, if more than one), even if you are gainfully employed in another occupation.
How do I get help protecting my specialty?
Medical and dental specialists will also appreciate Guardian’s specialty language, which takes the own-occupation concept a step further in protecting professional specialties: If you have limited your occupation to the performance of the material and substantial duties of a single medical or dental specialty, they will consider that specialty to be your occupation.
We’ve done the research for you. We compared disability income policies carefully before offering a recommendation. Many other companies don’t provide true own-occupation coverage or specialty language the way Guardian does. This is why we chose Guardian as our carrier of choice for the Medical and Dental community.
How much is the Benefit?
Most policies have a fixed monthly benefit. Although the benefit doesn't increase over time, you can usually purchase extra coverage or cost of living increases.
Why Income Protection?
Income protection is important because your income is important. Your ability to earn an income is the basis for your standard of living, your financial goals and your retirement savings. Look at it this way: The value of your income is probably reflected in the car you drive and the home where you park it each night.
Do you insure these and other assets against unforeseen risks? Naturally. Is there a comparable risk that a long-term disability will interrupt your income before you reach age 65? Absolutely.
You wouldn't underinsure your most valuable assets, so it doesn't make sense to underinsure something as essential as your income — and the best income protection available is individual disability income insurance (DI).
What are the statistics?
Myths vs. Reality
Two of the biggest myths about disability are that it doesn't happen to younger people and that it's largely the result of a work-related accident. The reality is, your odds of encountering a long-term disability — one lasting 90 days or more — before age 65 are:
Your
Age |
Your
Approximate Odds |
Average
Duration |
30 |
1 in 3 |
32 months |
40 |
3 in 10 |
42 months |
50 |
5 in 22 |
50 months |
60 |
1 in 10 |
54 months |
Note: Statistics reflect those for men; chances are actually higher for women.1 |
If you have considered life insurance, then you already recognize the importance of buying financial protection for your family before you need it. But at age 35, for example, if you are a man you are 4.1 times more likely to be disabled before age 65 than you are to die. At age 45, the odds are 4.4 to 1.1
1Commissioner's Disability Table, 1985, and Commissioner's Standard Ordinary Mortality Table, 1980. Statistics will vary depending on the applicant's gender, age, occupation, and medical history.
It may also surprise you to learn that fewer than 14% of all long-term disabilities are caused by injuries -- the vast majority result from illness.2
2U.S. Department of Education, National Institute on Disability and Rehabilitation Research, 1999.
Are there "Low-Cost Alternatives" to Individual DI?
Disability happens and it can cost millions in lost income and added expenses. There are alternatives to individual DI, such as using your savings, applying for Social Security benefits, or participating in a group long-term disability plan from your employer or a professional association. But consider these points:
- Personal Savings: Disability can be just as devastating to your family's finances as a death: If you saved 5% of your income each year, a six-month disability could wipe out ten years of savings. Worse, as illustrated earlier, most disabilities that last 90 days are likely to last years.
- Individual DI not only help protect your income, it helps protect your savings and your plans for them.
- Social Security disability coverage is far from guaranteed3: Nearly 69% of all applicants are denied benefits when they make their initial claims. In fact, you don't even qualify unless you have been disabled for five months and are expected to remain disabled for at least another 12 -- or your disability is likely to end in death. Even then, the maximum benefit payment in 2002 was around $2,000 a month (including dependents' benefits) and the average $821. And any benefits you receive may be subject to federal income tax.
- Individual Dl may take a far more liberal view of what constitutes total disability. Plus, the benefits available are more realistically scaled to your actual income, enabling you to replace up to about 60% of lost wages. And assuming you pay your premiums yourself with after-tax dollars, your benefits will be tax-free.
3Annual Statistical Report on the Social Security Disability Insurance Program, 2002.
I Have Group Insurance why should I get individual coverage?
Group Long-Term Disability Insurance may be available through your employer or a professional association, and it generally cover up to 50 to 60% of earnings -- subject to a monthly cap on benefits and minus any government program benefits (e.g. Social Security) you receive. Group coverage has other limits: It generally does not cover bonuses, commissions or pension contributions, premiums may be raised and coverage canceled at any time. Further, if your employer pays the premiums, then any benefits you receive will be taxable, and if you leave your job you will probably lose this coverage. Finally, if your disability allows you to work at another job outside your own occupation, you may not be considered eligible for benefits.
Individual DI policies can cover not only base salary, but also income and, with a few insurers, pension contributions. Also, if you pay the premiums yourself, benefits are not subject to taxes. The best individual Dl policies come with fixed premiums and non-cancellable coverage. Individual DI is also portable if you change jobs - even if you change careers.
How much do I get paid?
Up to about 60% of net salary or business income. Insurance companies place a cap on the maximum benefit they will pay no matter how high your income is. Current limits are $15,000 of monthly benefit.
When do benefits start?
You can decide that when you purchase your policy. Benefits can start after one month or up to two years after you become disabled. (By the way, this waiting period is sometimes called an "elimination period." It is the amount of time you must be disabled before you will be eligible to receive benefits)
How long will benefits last?
Typically, benefits are payable for two years, five years or to age 65. A very few companies may offer the option of lifetime benefits. Again, that's something you determine when you purchase your policy.
Can my policy be changed or canceled, or my premiums raised?
Yes, if the policy allows it. A good policy cannot be changed or canceled, even if your health or financial situation changes. It should also guarantee that your premiums will remain fixed until age 65, as long as you continue to pay them.
What if I want to change my coverage?
Look for policies that allow you to increase coverage to keep pace with the cost of living, increases in your income, or at certain ages. Some offer optional riders that allow automatic or optional increases every year.
What if I change jobs or careers?
One advantage of owning your own DI insurance is that it's portable. You pay for it, so you own it and you can take it with you if you leave your employer—or if you go into a completely new field or line of work.
What if I'm only partially disabled?
A good policy will pay benefits if you can only work part-time and lose income as a result. Look for a policy that does this even if you don't become totally disabled first.
How can I get help protecting my Retirement?
A disability can also interrupt contributions to your retirement plan. Very few companies offer special programs that use individual disability policies to help protect your retirement plan contributions – and those made by your employer – in the event you become disabled. It is not a pension plan. An individual disability policy is issued under a retirement protection program to cover up to 100% of your current contributions – and even the amount your employer contributes. If your become disabled under the policy, benefits are paid into an irrevocable trust. The trustee invests the funds at your direction. When you reach age 65 trust assets are distributed to you to supplement whatever you receive from your original retirement plan.
Benefits under a retirement protection program are generally issued in addition to your other disability coverage.
How can I get help protecting my Business?
If you own or share ownership of a business or professional practice, you might also consider protecting that investment with specialized forms of coverage:
- Overhead Expense Insurance: This provides reimbursement for the ongoing expenses of operating your business or practice if you are disabled and can't work. These expenses can include rent on your premises, electricity, heat, telephone, janitorial services, etc. Owners may also be reimbursed for staff salaries and, if you are a professional, a portion of the salary paid to someone hired to temporarily perform your duties.
- Business Reducing Term Insurance: This provides a unique form of disability protection. Such a policy covers fixed business obligations such as fixed term loans, purchase agreements, and salary contract guarantees.
- Disability Buy-Out Insurance: This reimburses the owners of a business or professional practice in the event they need to buy out a disabled owner's financial interest in the company. It not only helps protect a disabled owner's financial investment in the firm, it also enables the remaining owners to keep the business healthy and active.
How long does it take to get a Disability Policy?
All Insurance companies will have their underwriters review your application (which we will overnight to you for your signature) before issuing your policy. This process typically takes 3-6 weeks depending upon how fast you schedule your exam and how fast additional requests such as requests for medical records are met.
What happens if I get disabled while in underwriting?
We have the ability to bind coverage with conditional receipt paperwork for the particular insurance company and collecting a check for the required minimums (typically first month’s premium) to bind coverage. Please carefully review the terms and conditions in a conditional receipt if you receive one.
What type of Medical Exam is required?
The type of exam and tests required will vary by the amount of coverage requested and insurance company underwriting guidelines. We will have your insurance carrier’s medical or paramedical examiner contact you and set up a convenient appointment for a physical exam. The physical exam can take place in your home or office, and is performed by a medical professional at no cost to you (the insurance company pays for the exam). The exam typically includes blood and urine specimen, blood pressure, height and weight measurements and medical history questionnaire. Test results are available to you from the insurance company upon request.
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