Physician Group Disability Insurance Riders that Can Round Out an Optimum Coverage Package
While there are significant differences in the base disability contract between specialty physician and traditional LTD carriers (see Changing the Conversation Around Physician Group LTD), the right selection of riders built specifically for doctors is equally important in creating optimum coverage for your physician clients.
A broad spectrum of riders is available to round out your physician disability package and suit individual needs. However, these three riders form the core of a solid package and are those most requested by physician clients.
However, be aware that not all riders are created equal. Look for features tuned to physicians’ specific needs.
Business Protection Rider
Physicians are the chief source of income to any practice. If they are unable to work, income dries up not only for the individual doctor, but to the practice as well. This rider helps mitigate the overhead and financial risk to the practice while a physician is out on disability.
Look for these specific features: Add a rider to a physician disability policy; guarantee issue. Many brokers and planners are unaware that a strong business protection rider can be added to a group disability contract, typically at much lower cost, and without a medical underwriting requirement.
Potential Impact: An individual business protection policy could be nearly twice as expensive as a physican group LTD rider, and often requires medical underwriting.
Check out our Case Study Snapshots on this this rider.
Pension Contribution Rider
Continued contributions to a qualified retirement plan during a disabling event can make a significant difference in compounded accumulated balances available at retirement. This rider continues those contributions on behalf of the disabled doctor during qualified disability.
However, the basis for calculating those contributions is crucial. The two most common are:
- As a percentage of disability benefit
- As a percentage of earnings.
Look for these specific features: Make sure your client’s rider calculates payment based on earnings, not on benefit.
Potential Impact: Earnings-based percentage benefits typically result in contributions 2-3 times greater than the benefit-based method.
Check out our Case Study Snapshots on this topic.
Note: The IRS has requirements that may apply to the Pension Contribution Rider. We advise employers to consult with their plan advisors about whether there are any plan qualification tax issues related to payments made under this rider and whether the plan must be amended to accept payments under it.
Medical Malpractice Rider
Physicians have one of highest return-to-work or part-time work percentages of any group of disabled workers. Any doctor who returns to practice following a disabling event will have to address their malpractice exposure during their disability: either by buying expensive “tail” coverage, or keeping their malpractice insurance in place.
In either case, this is an additional expense at a time when the physician is most financially vulnerable.
Look for these specific features: Rider that reimburses medical malpractice premiums during the first 12 months of qualified disability, even if the physician is coming back to work part-time or in a reduced role.
Potential Impact: Covered physicians will save the cost of 12 months of malpractice premiums, up to $25,000. (Higher limits available). Subject to underwriting approval and case specifics.
Besides these three core components, additional riders are available that address specific needs of physician clients. Some of these include Progressive Illness Rider, Infectious and Contagious Disease Rider, Retro Disability Benefit®, and Extended Earnings Protection Rider. Click here for a listing of our complete range of riders and optional benefits.
Product offerings, benefits and features may not be available in all states and may vary depending on state laws and regulations.
Group disability insurance policies are underwritten by Sun Life Assurance Company of Canada (Wellesley Hills, MA) in all states, except New York, under Policy Form Series 93P-LH, 07P-LH-PT/07C-LH-PT, 12-STDPort-C-01, 12-GP-01, and 12-DI-C-01. In New York, group life and disability insurance policies are underwritten by Sun Life and Health Insurance Company (U.S.) (Windsor, CT) under Policy Form Series 13-GP-LH-01, 13-LTD-C-01-MGIS, 13-STD-C-01-MGIS, 13-ADD-C-01-MGIS, 13-GP-LF-01, 13-LF-C-01-MGIS, 12-GPPort-01, 13-LFPort-C-01, 13-ADDPort-C-01 and 12-STDPort-C-01. Administration for physician products is provided by Medical Group Insurance Services, Inc. (MGIS), in all states, except as follows: in CA by MGIS Insurance Agency, Inc.; in NY by MGIS Insurance Agency. Product offerings may not be available in all states and may vary depending on state laws and regulations.
The disability policies provide disability income insurance only. They do NOT provide basic hospital, basic medical, or major medical insurance as defined by the New York State Insurance Department.
This coverage does not constitute comprehensive health insurance (often referred to as “major medical coverage”) and does not satisfy the requirement for Minimum Essential Coverage under the Affordable Care Act.
© 2015 Sun Life Assurance Company of Canada, Wellesley Hills, MA 02481. All rights reserved. Sun Life Financial and the globe symbol are registered trademarks of Sun Life Assurance Company of Canada. Visit us at www.sunlife.com/us.
For producer use only. GGEL-PHY-4902 SLPC 26509 04/15 (exp. 04/12)