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“What If…?”: A Question of Disability Insurance


Imagine: what if you could not be a doctor? It takes years of education, training, and commitment to practice medicine. It takes just as much to build your lifestyle. Yet, one moment, whether due to an accident or illness, can derail or severely alter all that you have worked for through those years of dedication. It is easy to think “it won’t happen to me” regarding forces completely out of your control— until it does. So, how will you protect your family and yourself?

What is disability insurance and who needs it?

  • One in four non-elderly Americans suffer financially from unaffordable medical bills and medical debt.
  • Media powerhouse USA Today asserts that debt from health related expenses is the top reason for personal bankruptcy filings in the U.S.
  • The Social Security Administration reports that 25% of 20-year-olds today will become disabled before reaching the age of 67.

Do you still believe it could not happen to you? Even with the risk of developing a potentially life altering disability so high, only 20% of people own disability insurance.

Disability insurance helps to protect the insured’s income should they develop a disability, either an injury or illness, that prevents them from working for a period of time. The money that is disbursed on a monthly basis from this policy can go toward paying bills and/or daily living expenses that may be difficult to manage without a steady income for the duration of the insured’s disability. Coverage does not replace 100% of the insured’s income, however insurance policies do pay a high percentage, generally 60% but could be as high as 70%.

What are the benefits of a group policy?

Group disability insurance is a benefit through an employer or association. Long term disability (LTD) may be available from an employer or can be purchased on an individual basis from an association, etc. It is intended to cover the insured for illnesses or injuries that put the insured out of work for at least a few months. This the monthly payouts from this coverage can help you meet your financial obligations like mortgage payments, student loan debt, retirement savings, college education funds, and general monthly living expenses.

With the AAP Insurance Program’s Group Long-term Disability Insurance specifically, members receive many subsequent benefits. For example, your disability benefits are always paid regardless of other coverage, benefits are payable up to age 70, and there is no individual targeting for premium increase. Additionally, unlike an employer based group policy based upon your continued employment, these benefits are portable within the U.S. and Canada so long as AAP membership is maintained.

What does it mean to be disabled?

Think you know the answer? One of the most important considerations when evaluating policies is how disability is defined. The Americans with Disabilities Act (ADA) defines an individual with a disability as “a person who has a physical or mental impairment that substantially limits one or more major life activity.” Each policy, may define disability differently which will directly impact how and when the benefits are paid out.

As with most other types of insurance, there are various types of disability insurance policies:

  1. Own occupation. This policy is often the most expensive but offers more broad coverage for the insured than the other types of policies.
  2. Reasonably suited. This type of policy is considered mid-level coverage in both what it offers and its premium pricing.
  3. Total disability. This type of policy is typically the least expensive.

Most group policies are the latter two options, Reasonably Suited and Total Disability. Additionally, there is the option to create a policy that will only last for a certain period of time. This window of time can help foster a smoother transition financially for the insured to their new normal after becoming disabled.

A feature you will want to look for is called “own occupation.” In other words, the policy considers you to be disabled (with some other stipulations, such as the inability to do certain activities of daily living) when you cannot do your exact job, not just any job. It is also important to consider a Residual Benefit that would continue to provide a benefit if you can work part time.

Also, disability insurance can be complicated. In addition to how disability is defined there are multiple benefit periods, waiting periods before benefits begin, cost of living riders, so it is important to get advice you can trust.

How much does it cost?

By working with the USI Affinity Sales Team to create a policy specially designed around your needs and budget, Disability Insurance coverage can be affordable. Considering the rising odds that any given person could end up with a disability at some point in their lifetime, a policy can be a life saver in the event it needs to be activated.

As a member of the American Academy of Pediatrics, disability Insurance solutions are available through the AAP Insurance program to help you continue saving for your retirement and protect your assets. You may be eligible for up to $10,000 per month in non-cancelable coverage, payable up to age 70, through the AAP Insurance Program’s Group Long-Term Disability Insurance. Learn more here.


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