The Process of Disability Insurance

Long Term Disability Insurance is a product you hope to never use, and hope to never replace in the future. Many older attending physicians’ shop to replace their coverage with better benefits but do not qualify due to pre-existing conditions and health status. Shopping for disability insurance is not simple and should be purchased correctly the first time.

This article should provide you with knowledge on what to look for within a disability insurance quote when shopping and what to expect when applying.


Searching for the Right Disability Insurance Policy

To get started, you would need to contact an agent or broker for personalized disability insurance quotes. We highly recommend using an independent broker who is not employed directly with an insurance company. Independent brokers are able to shop the top insurance carriers for you and provide an unbiased analysis of differences. Agents who are directly affiliated with an insurance company may not have the resources to provide insight on other products in the market.

Quotes can be customized to your needs, but we recommend considering the below riders and benefits.


True Own Occupation

It is important for physicians to consider the value in obtaining “True Own Occupation” disability insurance coverage that protects the ability to work in their chosen medical specialty. Insurers use different terminology for this definition.

  • “True Own Occupation” – Guardian
  • “Regular Occupation” – Principal
  • “Own Occupation for the Length of the Benefit Period” – Ameritas
  • “Own Occupation” – Standard
  • “Own Occupation” – MassMutual

The key to finding out if your plan has True Own Occupation or not is within the language.

If the quote/policy is True Own Occupation, it will state you are considered Totally Disabled if unable to perform the material and substantial duties of Your Occupation AND it will include language allowing you to work in another occupation or specialty if totally disabled in Your Occupation.

Almost all disability insurance plans will state their total disability definition is “Own Occupation,” however this doesn’t mean they are True Own Occupation. We have seen policies state they are Own Occupation but do not allow you to work in another occupation or specialty while collecting claims! It’s extremely important to keep in mind that the difference between Own Occupation and True Own Occupation is if the plan will allow you to work somewhere else while disabled. 


Residual or Partial Disability Benefits

Keep in mind, the “basic” residual disability riders will state that you must lose at least 20% of your income, and time or duties in order to qualify for partial disability. Others, such as “enhanced” residual, will state you must lose at least 15% of income to qualify. A residual rider will allow you to receive partial benefits if you endure a 15-20% or more loss of earnings. This percentage is specific to each insurance provider, so make sure to ask your advisor for full details.


Future Increase Rider

A Future Increase Rider allows you to increase the monthly benefit without undergoing additional medical underwriting at the time of increase, even if your health has changed. This rider can be technical in when you are allowed to increase

the plan. There are different future increase riders named Future Increase Option (FIO), Benefit Update (BU), Benefit Purchase Rider (BPR) and Benefit Increase Rider (BIR).

The Future Increase Option Rider will be the most flexible of the future increase riders. You will be allowed to increase at any policy date in the future. You are never forced to increase coverage. Due to the flexibility, this rider comes at an additional cost within the plans. Ameritas, Guardian and MassMutual are the companies that will have this rider.

The Benefit Update (BU), Benefit Purchase (BPR) and Benefit Increase Riders (BIR) all work the same way. You are allowed 1 increase at the end of each 3rd year. At the end of the 3rd year, you will need to provide income documentation and request an increase. If you qualify for an increase based on income and other long-term disability coverage, you would need to accept at least 50% of the increase amount you qualify for in order to renew your rider for the following 3 years. It’s a continuous 3-year cycle where you will need to request an increase in order to renew the rider. If you do not request an increase at any 3rd year period or you do not increase by at least 50% of what you qualify for, you will lose the future increase rider forever. If you lose the rider, you will need to undergo additional medical underwriting only if you wish to further increase the benefit in the future.


Cost of Living Adjustment – COLA

The purpose of the COLA rider is to help benefits keep pace with inflation in the event of a disability lasting longer than 12 months. Increases start to accrue after the insured is disabled for 12 months. The options are 3% simple, 3% compounded, 0 to 3% compounded, 0 to 6% compounded, and 4-year delayed. The additional cost of the COLA rider may be significant so it is important to understand which COLA option you were quoted and how each works.

  1. 3% Simple – provides for an annual 3% simple interest increase
  2. 3% Compounded – provides a fixed 3% annual compounded increase
  3. 0 to 3% (and 6%) Compounded – provides up to 3% annual compounded increase based on the change in the Consumer Price Index for all Urban Consumers (CPI-U) over the past year of disability
  4. 4-Year Delayed – provides a fixed 3% annual compounded increase starting on the 4th anniversary of the date you first became disabled.


Application Underwriting Process for Physician Disability Insurance

Underwriting is the process an insurance company uses to determine the final terms and conditions of your policy. After selecting which disability insurance policy to apply for, you will need to go through the 2 to 6-week underwriting process for approval. After submitting an application, it takes 3 to 6 weeks to receive an offer. However, that period could be shorter or longer, depending on how long it takes to receive and underwrite (review) the required medical, financial, and occupational information.


#1 Requirements for the Applicant

Financial Underwriting: Documentation Requirements

Just as financial institutions require income documentation for mortgages, loans, etc., the disability insurance company will require income verification in the form of a paystub, W-2, and/or tax return. This will be required in order to determine if you are financially eligible for the coverage amount you are applying for. Your independent broker will be able to determine how much you would qualify for while initially discussing the plans they had quoted you.

Medical Underwriting: Phone Interview and Lab Testing

The first step of medical underwriting would be to complete a phone interview. During this interview, you will be asked medical information in order for the insurance carrier to fully assess your medical history.

In most cases, blood and urine samples will also be required (waived for residents, fellows and for physicians that qualify for the special underwriting considerations below). The insurance company will pay for the entire cost of the exam. If there are any health issues, coverage may still be offered, but with modified benefits, a particular condition excluded from coverage, an extra premium may be charged because of adverse health history, or it may not affect the offer at all.


#2 Special Underwriting Consideration Programs

Most insurance companies have Special Limits & Streamlined Underwriting for New Professionals. These programs will make the underwriting process simpler for medical & dental students, residents, fellows, and first-year attending physicians.

Students, residents, fellows, and first-year professionals often lack the earnings necessary to qualify for a higher monthly benefit through disability income insurance, yet have tremendous future earnings potential. Through these programs, you could be underwritten without proof of income, without lab testing and will qualify for a certain maximum monthly benefit amount (for example residents can obtain up to $5K, whereas first year attending physicians may qualify for up to $6.5K or $7.5K).


#3 COVID-19 Guidelines

COVID-19 has not affected the pricing or benefits of disability insurance.

For any attending physician that does not qualify for the Special Limits & Streamlined Underwriting above, lab testing and financial underwriting is typically required. Insurers have changed this guideline due to the COVID-19 pandemic. Most carriers are waiving lab testing for select applicants depending on the monthly benefit amount applying for and current age.

Also, the future increase rider guidelines have changed due to the pandemic. With Principal’s BU rider, Guardian Select’s BPR and Standard’s BIR rider, attending physicians usually must initially apply for at least 75% of the max monthly benefit amount they qualify for based on income and other coverage. If you do not apply for at least 75% of the monthly benefit, the future increase rider will not be given. However, due to COVID-19 changes, the companies are allowing applicants to apply for at least 50% of the max monthly benefit and are still able to obtain the future increase rider within these plans.


#4 Underwriting Review

The underwriting review will consist of the following.

Pharmacy Report

This report is a database that collects the history of your pharmacy prescriptions. Insurers will request this information and get a sense of what medical conditions you have even if they do not require a medical exam or medical records.

Medical Records (Attending Physician Statement)

The underwriters may request medical records from any of your physicians to get a better understanding of your medical history, symptoms, treatment and compliance.

Motor Vehicle Record

An insurance company considers the information in MVRs to assess your risk profile. The insurer may analyze your violations, suspended license, DUI’s, reckless driving, at-fault accidents, etc.

MIB (Medical Information Bureau)

The MIB is exclusively used by insurers to assess your medical risk and eligibility for insurance. This database is sometimes described as an “information exchange” because insurance carriers contribute their underwriting medical information about applicants, which can be used by other insurers who later search the database.


Some extracurricular activities are deemed risky by insurance carriers. They include, but are not limited to: skydiving, motor-vehicle racing, scuba diving, rock climbing, and mountaineering. Depending on the frequency and degree of participation, the underwriters may exclude your activity from the policy.

Occupational Considerations

In order to qualify for long-term disability insurance, you will need to be working without limitations and for a minimum number of hours (typically 30 hours) per week. Principal would be able to offer coverage to anyone working at least 20 hours on average per week.

International considerations

Green card holders are eligible for the same unrestricted coverage as a U.S. Citizen. Foreign nationals who currently hold an H1B, L1, J1, O1, or TN temporary visa will be considered for disability coverage.


#5 Approval for Disability Insurance

One of the last steps of the underwriting process is the approval and offer. When you purchase disability insurance, it is important to understand that the policy you purchase could have limitations once the underwriter has reviewed your medical history.



Any current or past prescriptions, surgeries, and diagnosed conditions have to be reviewed to determine if they would lead to a greater risk that you will be disabled in the future vs. someone without the same history. Disability underwriters look to use specific exclusions prior to adding additional premium or cutting back benefits. For example, if you have a herniated disk in your lower back, you could expect the company to put an exclusion on the policy. The Top 5 insurance carriers (Principal, Ameritas, Guardian, Standard, and MassMutual) may further limit this exclusion to just the Lumbar (lower back), so a disability due to your Thoracic or Cervical spine would still be covered.

Mental Nervous Exclusions

While spine exclusions are very common, the one that is most frequently used is the mental and nervous exclusion. If you have a history of anxiety, depression, or attention deficit disorder you can expect to have this exclusion added to your policy. Since it is so common, a high percentage of disability policies are issued with some form of exclusion or limitation.

While the two exclusions above are the most common, there are many conditions that could result in an exclusion … ears or eyes for degenerative type conditions, knees or hips for joint conditions or prior surgeries, digestive tract for problems like colitis, etc. Someone’s weight or blood pressure can also lead to multiple health problems.