What you should know about Individual Disability Insurance

What you should know about Individual Disability Insurance

Customize your Coverage:

  • Non-Cancelable & Guaranteed Renewable
  • Own Occupation (Specialty Specific) Definition of Disability
  • Total and Partial Disability Benefits
  • Age 65, 67 or 70 Benefit Period
  • Future Insurability Option (FIO) Rider
  • Optional Inflation Protection (COLA) Rider
  • Optional Retirement Plan Protection (RPP) Rider
  • Optional Student Loan (SLR) Rider 
  • Optional Catastrophic Disability Benefit (CDB) Rider
  • Financially Strong Insurer - Standard & Poor’s, A.M. Best, and Comdex Composite Score

Riders are additional guarantee options that are available to an annuity or life insurance contract holder. While some riders are part of an existing contract, many others may carry additional fees, charges and restrictions, and the policy holder should review their contract carefully before purchasing. Guarantees are based on the claims paying ability of the issuing insurance company.

Available Carriers:

  • Ameritas
  • Berkshire/Guardian Life
  • Lloyds of London
  • MassMutual
  • Ohio National
  • Principal Financial
  • The Standard

Limitations of Group (LTD) Disability Coverage:

  • Coverage depends upon remaining a member of the group - not portable
  • The insurance company may have the option to cancel, modify, and/or raise your rates without your consent
  • Group plans can not be tailored to meet your individual needs

The Changing Market:

  • Premium guarantees (non-cancelable plans) are threatened
  • Increase in rates for physicians
  • Specialty coverage for physicians is endangered
  • Benefit periods are reduced

Certain Conditions may be Limited or Excluded:

  • Stress, Emotional, and Mental Claims
  • Soft-tissue Injuries
  • Pregnancy Claims
  • Foreign Travel

How Policies are Offered:

Disability insurance can be purchased on either an individual or group basis. Group insurance is usually provided by your employer or purchased individually through an association. Although initially low in cost, group policies have several limitations. They can be canceled (by the association, the insurance company, or by your employer with 30 days notice) to save money, premiums increase significantly as you get older and are subject to annual increases by the insurer due to the claims experience of the group. Finally, group and association plans often contain restrictive language that is usually not found in an individual policy and they contain less generous provisions.

How Disability Policies are Priced:

The cost of coverage is influenced by your age, gender, state of residence, benefit amount, benefit period, optional riders, and your medical history.

How to Determine the Amount of Coverage:

In general, you should maintain enough disability insurance coverage to replace at least 60% of your gross income. If you are a sole proprietor, use net income from Schedule C of your Federal income Tax Return instead of your gross income. Please refer to the Income Ratio Guide to determine the maximum monthly benefit amount that you may purchase based on your earned income. Special limits for first year physicians in private practice (based on medical specialty) and physicians in training may also apply.

Premiums paid with post-tax dollars will result in tax-free benefits. Premiums paid with pre-tax dollars will result in taxable benefits.


Purchasing a disability policy is one of the most important steps in the financial planning process. For this reason, it is important to discuss your needs with an experienced physician-specialized advisor who understands the subject thoroughly, who represents more than one company (broker) and who can help you determine whether the policy's features, benefits, risks and fees are appropriate for you based on your financial situation and objectives.

Contact us today at (818) 783-6620 or by email at info@kaplanfinancial.net for a complimentary, no obligation consultation or to receive proposals from the leading providers of physician "own occupation" disability insurance.