Frequently Asked Questions
Why do I need supplemental disability insurance?
If you’re working and saving for retirement, what’s your most important asset? Your home? 401(k)? Other investment accounts? (please don’t say your car). It’s you. Specifically: your ability to produce income, year after year.
Multiply your earnings each year by the amount of years you will work. Then add compounding interest from saving some of that income. Spoiler alert: it’s substantial.
If something were to happen to you, rendering you unable to work, your entire financial trajectory would run off course. All that expected income would be gone, and complications would mount.
Supplemental disability insurance would provide you income in the event something were to happen and you were no longer able to work. Without this protection, years upon years of income would be erased from your financial future.
Won’t a workplace benefit cover this for me?
If you work for someone else, your employer might replace part of your income through a group disability policy or workers’ compensation. But not all of it. Add on new medical expenses, and you’d be in a bad situation quickly.
And if you work for yourself, there’s not necessarily any protection at all.
What does it mean that a policy covers my “own occupation?”
An own-occupation insurance policy covers individuals who become disabled and are unable to perform the occupational duties that they have been trained to perform. This is the strongest and most preferential coverage description. It means the insurance company cannot force you to return to work doing something other than what you were trained to do. For example, if you trained to become a surgeon, and you are unable to operate, a supplemental disability insurance policy that covers your own occupation will replace your income without forcing you to return to work in another field for which you were not trained.
What is “noncancelable?”
A noncancelable disability insurance policy, simply stated, is a policy that the insurance company can’t later cancel, increase the premiums on, or reduce the benefits of (as long as the customer pays the premiums). This is an important protection because a subsequent life or health event may make you a less ideal candidate to insure–but if you secured a noncancelable policy, the insurance company must continue to protect you under the same terms.
What is “guaranteed renewable?”
This is a provision in disability policy that requires the insurer to renew the policy on its anniversary, though not with terms as strong as noncancelable. The premium required can usually be changed as part of the proposed renewal.
What is “premium refund?”
Protecting your income requires a monthly, quarterly, or yearly payment, called a premium. The insurance company collects your premiums and invests the money in a variety of ways. If they do not have to pay a claim on your behalf, several years later, some carriers will refund all or a portion of your initial premium outlay to you.
How can I determine which company to secure supplemental disability insurance from?
The disability insurance industry is constantly in flux. Physicians Financial Services keeps clients advised of opportunities to maximize risk protection benefit while also deducting premiums and potentially recouping their contributions in a subsequent refund of premium. Along with these features, we monitor disability carriers for their reputation, credit ratings, and claims paying history.