Dear Doctor: What You Need To Know About Own Occupation Disability Insurance Policies

June 26, 2007

You've worked hard to get through medical school, gone on to specialize and now, you need to protect one of your most important assets: your income stream, says Frank N. Darras, the nation's leading disability and long-term care insurance lawyer.

Purchasing disability insurance, however, can be tricky and expensive. Policy features, advantages and benefits vary greatly. While some policies are iron-clad and pay benefits when you need them, others have holes and can cause financial disaster, should you become disabled.

Darras offers the following tips:

  • Always buy as much individual coverage as you can afford. While doctors think (like everyone else) that they will never become disabled, the reality is that one third of all Americans between the ages of 35 and 65 will become disabled for more than 90 days.
  • Buy your policy as soon as you can, as coverage is the cheapest when we are young and healthy.
  • Even if your practice offers a group policy, be sure you buy your individual coverage first, and pay the premiums for the policy yourself so any benefits will flow tax-free. With individual coverage you also have more rights and remedies in the event your claim is wrongfully denied.
  • Only purchase "non-cancelable" and "guaranteed renewable" coverage. These features mean the insurance company cannot cancel your policy, increase your premiums or change the contract language as long as you pay your premiums on time — even if the insurer is "taking a bath" on the claim side or decides to stop writing new business in your state.
  • Obtain the longest benefit period possible — lifetime if available, but at least until you reach age 65. Always buy "own occupation" coverage.
  • Remember, when it comes to insurance, "the big print giveth … the small print taketh away," so be careful and read the fine print.
  • Be a smart shopper and don't miss a premium payment.

"Finally, physicians often make fatal mistakes early in the claim process," says Darras. "Be sure to seek out the most experienced disability counsel before you file your claim so the carrier doesn't snooker you with legalese or fine print.