The devil is always in the details. Do you want to review your current coverage or look at your options? We can help.
A big decision that Veterinarians make when graduating is to purchase the right disability coverage. You have spent your life and thousands of dollars to get here. Now is the time to make sure that your income continues if you were to become sick or injured.
This decision is complicated because there are several moving parts. Most will solely focus on cost and ignore what’s important. This can be the determining factor between being eligible to receive or not receiving your money.
The 3 most important parts of your disability contract are the definitions of total, partial, and presumptive. The best way to think about them is a three-legged stool. If one leg gives out, the stool falls over. In order to qualify for a disability, you must satisfy one of the definitions. So, let’s dive into the 3 triggers.
Trigger #1 – Total Disability
This is the most common definition. Veterinarians often believe they must be completely disabled to receive money. Your profession provides a feature called own occupation and some policies will include specialty language for your role. This means that your job could be related to surgery, dental, oncology, or any other specialized role. If you cannot do those roles, but you can be a general practice Veterinarian, you can still qualify to receive your benefit.
A total disability works when you are not able to do the material and substantial duties of your current job. Own occupation provides flexibility for you to work a different job and continue to receive your benefit. Certain policies will limit your own occupation between 2-5 years and require you to not receive any paychecks.
In order to begin receiving your benefit, there is an elimination period. Instead of paying money, like a car deductible, you “pay” with time. The common elimination period is 90 days. How are all these days satisfied? Many policies require 90 consecutive days after you file a claim. There are policies available that allow you to satisfy those days over a 210-day timeframe.
Keep in mind, total disability is not the same for group policies (an association or an employer) and the coverage offered through an outside insurance company.
Trigger #2 – Partial Disability
What happens if you were to become sick or injured, claim for total disability, and return to work but you are not able to perform in the same capacity? This is where a partial disability comes into play. Let’s say that you’re able to work but your productivity has declined. If that happens, you will receive all or a portion of the monthly benefit from your policy. Several contracts require you to lose 20% of your income with a loss of time and duties. When this happens, filing a claim can become difficult. You could be working full time and your role inside the company changed. For example, before you were performing surgery but now you are only meeting with patients. This will cause your income to decrease but you will not qualify because you’re working full time. Policies are available where you can lose a percentage of your income without having to worry about losing time or duties.
Your benefit will continue to be paid (as long as you meet the requirements) for the entire benefit period of your policy (most times this is until retirement). Your benefit period can be for 5 years up to age 70 with the ability to have a lifetime benefit. If you are unable to work at all, the claim will transition to a total disability. There are certain policies that will come with a residual disability (this is not partial). The definitions are completely different. Residual benefits might come with limitations such as a set time period where the benefit will be paid or the amount that will be paid.
Trigger #3 – Presumptive Disability
Most people are not aware of this trigger. Presumptive disability is designed to provide a benefit for the loss of speech, hearing, cognition, or the loss of use of one hand and foot or one leg and one arm. Your entire policy benefit is paid to start in day one and the elimination period is waived. If your claim does not improve during the elimination period, the definition that you qualify for will transition from presumptive to a total or partial disability. Depending on your contract this event might need to be a permanent loss. Most group and individual contracts limit this benefit to a permanent loss. There are policies that will pay the claim when the disability is considered temporary and there is a possibility for recovery.
There are many different features to consider when purchasing disability coverage and these are the basic benefits that everyone should get right from the beginning. If you’re interested to learn about the differences in the group and individual coverage, visit our other article called Group versus Individual Disability.
This article was written by Tom Seeko with Florida Veterinary Advisors.