Is Your Old Physician Disability Policy Still Good Today?
Updated: Sep 16, 2020
In most cases, yes. In some cases, a new physician disability policy may be more beneficial to offer stronger protection. Here is what you need to know to help determine what is best for you.
Many older physician disability insurance policies were written with liberal provisions benefiting the consumer such as:
Higher Benefit Amounts – where current rates max out at about 50%-60% of gross income or about 25K, older policies can have a higher percentage cap and as much as 40k monthly benefits.
Good Definitions of Disability – it was much more common to see the stronger, specialty-specific Own Occupation Physician Disability insurance definition
Unlimited Mental Nervous Benefits – Many policies now have a 2-year benefit restriction for disabilities resulting from mental health issues such as depression, nervous breakdowns and alcoholism among others. Older policies may not have this 2-year restriction.
Don’t pay more for the same coverage! If your policy has strong definitions of disability, consider keeping what you have.
In addition, with older doctor disability policies, you probably have a premium that is guaranteed and cannot increase based on your age. This also highlights an option fairly exclusive to individual disability insurance products: premiums are guaranteed not to increase. Unlike your home, health or auto insurance, disability insurance premiums can be guaranteed if you purchase the right kind of policy. (Click here to read our last post explaining the difference between individual physician disability insurance products and a typical association plan.)
What Should You Do With Your Old Physician Disability Policy?
Keep it! Assuming it has the stronger definitions, the only thing you will accomplish by buying a new policy to replace your old policy is, at best, pay a lot more for nearly the same coverage. Instead, it’s better to simply buy additional coverage to stack on top of your old coverage. There is no penalty for holding multiple physician disability policies, nor does it restrict your max potential benefit. Then, in the future, if you need more coverage you can either explore a Future Increase Rider, or continue to purchase incremental amounts at your own pace.
Unfortunately, in some cases, older policies may not have great definitions of disability and do have increasing premiums. If this is the case, it is important to consider changing to a new policy with stronger protection for you. Whatever the case may be, it’s always better to play it safe, especially when it comes to your future. We regularly perform disability insurance policy reviews/audits to make sure you get exactly what you think you’re paying for. Contact us today for a free policy review.