Long-Term Disability for Medical Professionals

In this article, I will share some tips and recommendations that medical professionals should consider when selecting disability insurance, and I will also discuss what one should do if a long-term disability insurance claim is wrongfully denied. It’s important to note that I am not an insurance provider, nor am I affiliated with any insurance company.

In fact, I’ve built my career on fighting back against disability insurance companies that have acted in bad faith. The information provided in this article is from the perspective of an attorney who has seen the very worst damage that insurers can do. I hope my experience can help you avoid the most common pitfalls that affect so many.

Choosing a Long-Term Disability Policy

The single most critical piece of language you’ll find in a disability insurance policy is the language an insurer uses to define “disability.” With all of the resources you’ve invested in acquiring and maintaining your medical knowledge, your goal in purchasing disability insurance should be to protect the specific future you’ve designed. Therefore, you should find a policy that defines disability in a way that triggers benefits if you lose the ability to perform your particular job. Such a policy should state that a person is considered disabled if he or she becomes “unable to perform the duties of his or her own occupation.”

Alternatively, a policy may describe disability as not occurring only when someone is “unable to perform any occupation.” For example, you would not be eligible for benefits if you could operate a toll booth or collect tickets at a movie theater. As you can see, the difference between “own” and “any” occupation in a disability policy is extremely important, and that’s why it’s the first thing to look for when considering a policy.

Group vs. Individual Policies

You may find that your employer offers a group policy. Many employers will actually pay premiums for their employees, which is usually worth taking advantage of, although some group policies will limit the amount of coverage one can purchase if the insured already has an individual policy.

In general, these group policies come with lower premiums and often don’t require you to answer dozens of annoying questions about your current health status. However, many group policies increase your premium as you age, and most won’t allow you to keep your policy if you change employers. Individual policies tend to have higher premiums, but policyholders enjoy better benefits because they are individually underwritten.

Generally, group policies use the more conservative “any occupation” definition of disability, while individual policies usually use the more liberal “own occupation” definition. Another added advantage of individual policies is that they are generally portable, meaning that your coverage under the policy will continue if you get a new job.

When to Buy

Obviously, it’s important to buy disability insurance before you become disabled, so it’s always safer to buy earlier. However, while wealth and age tend to have a positive correlation (e.g., I have much more buying power today than I did when I was 18), health and age tend to have a different relationship. As a result, we’re less inclined to buy insurance when we’re young and healthy and have much less in the way of financial resources. A good strategy for a young doctor just entering residency would be to buy a modest policy that can be upgraded just before leaving residency.

How Much to Buy

Determining how much coverage to buy requires a close examination of your finances. In general, you should purchase enough coverage to cover your living expenses, which may be very different from your income. In addition, your policy should match what your retirement savings will be if you work until the age of 65. Generally, disability insurance payouts aren’t taxed, so it may not be necessary to include Uncle Sam’s share when you’re calculating your coverage.

When to Cancel

The basic purpose of disability insurance is to protect your income stream from the risk of disability. Therefore, it makes sense to cancel your policy if either of the following occurs:

1. You no longer have the same income stream that you purchased the specific coverage to protect (e.g., you quit and joined the circus), or
2. You’ve become so financially independent that you can use other sources as a means to protect your financial status.

Disability Riders

When evaluating a policy, especially if you’re working with a commission-based agent, you’ll be presented with a litany of insurance riders to enhance the policy. The following are some of the riders that I believe are worth considering:

• Cost of Living Adjustment (COLA) – A COLA rider will increase your benefits in proportion to the Consumer Price Index while you’re on claim.
• Student Loan Rider – Such a rider will ensure that your student loan payments are covered while you are on claim.
• Retirement Protection – The purpose of this rider is to replace any retirement savings you may have lost while on disability. If and when your benefits are triggered, the funds can be placed in an irrevocable trust to be paid out upon retirement.
• Future Purchase Option – This rider would allow a policyholder to increase their coverage over time as their income increases without additional medical underwriting. The downside is that these riders usually require higher premiums.
• Residual Disability – This rider provides supplemental income when a disability only partially limits a policyholder’s ability to work. The additional income allows a person to remain gainfully employed while receiving treatment and working toward a full recovery.

Request a Free Policy Evaluation

It is easy for individual policyholders who are not trained to read insurance policies to misread or misunderstand the disability policy. We can help you understand what you are entitled to and whether there are deficiencies in your coverage that could result in a denied claim.

As part of our evaluation, we will explain what everything means to you in your situation. Some of the aspects of your policy that we will review include:

• Total versus residual disability;
• Own occupation versus any gainful occupation;
• Mental and nervous disability benefit limitations, and
• Benefit limitations for self-reported conditions.

When a Long-Term Disability Claim is Denied

The claims process can be a long and difficult road, but your benefits are worth fighting for. Policyholders often procrastinate and fail to file their claims on time. Remember, when you purchased and signed your policy documents, you’ve entered into a contract with your insurer. You’ve agreed to submit your claim for benefits and “proof of loss” within a certain period of time after you become disabled.

Failure to meet this deadline can result in a total loss of benefits, so you must file your claim immediately. If you do nothing, you will get nothing. You’ll also need to sign a medical release authorization form and give it to your insurance company. This will allow your insurer to collect the medical information they need to decide your claim.

Denied? Don’t Give Up! File an Appeal!

Nothing would make your insurance company happier than for you to accept their denial of your claim. That is why the appeals process is so difficult. Many insurers hope to wear claimants down until they return to work and give up all hope of receiving benefits. Some refer to this technique as “starving out” a claimant.

When a person is already struggling with the limitations of a medical condition, fighting a large insurance company can be overwhelming, which is why many claimants give up. Insurance companies know this, so denial is their first resort. Don’t give them the satisfaction! File an appeal, but be aware that you have a limited time frame in which to do so. Depending on the terms of your policy, you may only have 60 days after receiving notice of your denial to file an appeal, so don’t delay.

Has Your LTD Claim Been Denied?

The Ortiz Law Firm provides aggressive, nationwide representation to claimants whose long-term disability insurance provider has wrongfully denied benefits. If you’ve been denied, we want to fight for you. All policies limit the amount of time a claimant has to appeal a denial, so don’t delay. Call (888) 321-8131 for a free case evaluation.