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Disability Insurance Basics

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The Physicians we work with trust Blue Sclera Disability Insurance with all of their Disability and Life Insurance needs and know that we care about their specific requirements. We offer the very best consultations regarding insurance requirements needed. 

Disability Insurance contracts consists of defining policy language as it relates to Individual and Group coverage offerings, optional riders and underwriting requirements. The few companies that specialize in Disability Insurance coverage for physicians have excellent product offerings that essentially mirror each other.

Clients then have to consider working with either an "Agent" or a "Broker". 

Financial Representatives or Agents typically represent one company and are obligated by contract to sell a particular company's insurance products.

Independent Brokers are contracted with many insurance companies which allows clients to review multiple policy options.  Brokers represent the insurance buyer.

Blue Sclera Disability Insurance is an Independent Brokerage firm which allows us more flexibility in designing policy's that are tailored to each particular client.

Individual Disability Insurance

Disability Insurance is the foundation of financial planning and is offered to Residents when they start their training. Policy language is vital to an "Individual" contract and it starts with a "Base Policy" along with "Optional Riders" that allows for customization to cover all financial obligations that one may be committed to. Keep in mind that a 'Rider' from one company may be part of 'Base' coverage from another.

Features of a competitive BASE POLICY:

  1. Non-Cancellable Guaranteed Renewable: This feature indicates that as long as premiums are paid, the policy cannot be cancelled, premiums cannot increase and coverage cannot change. 

  2. Waiver of Elimination Period:This feature waives the premiums on your policy while you are out on claim. Disabling events that last more than six months where benefits are paid, the elimination period for any subsequent disability of 30 days or more that occurs within 5 years will be waived.

  3. Definiton of Disability: Is the heart of a Disability Insurance contract and this definition lies on your ability to work.  The interpreted definition will determine if you qualify to collect and for how long.  "Liberal" definitions of disability favor the policy holder whereas "Restrictive" definitions of disability are less favorable.  Common definitions of disability are as follows:

  • Any Occupation - most restrictive ​definition of disability.  Benefits may not be paid out if your eligible to work in another occupation.

  • Modifiied Own Occupation - less restrictive definition of disability. Benefits are paid if you're not able to work in your own occupation and not gainfully employed elsewhere.

  • True Own Occupation - most liberal / favorable definition of disability to the policyholder. Benefits are paid even if you're employed in another occupation.

RIDERS are optional policy features that augment BASE coverage and may or may not increase premium cost.  The following RIDERS should be considered to enhance coverage:

1.  Residual Disability - This feature provides benefits if you are not totally disabled and are still working. The company your policy is with will deteremine what your benefit will be based on a certain percentage reflected by  loss of time , loss of duties and loss of income.

2.  Presumptive Disability - This feature allows for benefits to be paid out immediately and most often will not require additional medical exams to be prove the disability continues to disable an individual.  This rider protects against drastic disabilities that occur suddenly and result in loss of hearing, sight, speech or use of any two limbs.

3.  Catastrophic Disability - This feature will allow you obtain more that 60% of your pre-disability earnings as is the case with most insurance companies in the event you are unable to perform two or more of the activities of daily living, loss of sight or hearing, or have suffered cognitive impairment.

4.  Cost Of Living Adjustment (COLA) - This feature keeps pace with inflation by adjusting your monthly benefit each year while you are out on claim.  Usually the adjustment can be increased by by 3% or 6% each year which allows you to keep up with expenses.  

5.  Retirement Protection Plan (RPP)

This feature allows for the contributions you would have made to a defined contribution plan while you're disabled.

Remember: Retirement plan contributions CANNOT be funded through Disability Income proceeds.  

6.  Future Income Option (FIO) - Allows policyholders to increase their insurance coverage annually during policy anniversary as their income increases.  No medical underwriting is required and this additional coverage may increase premiums.

7.  Student Loan Protection - This feature adds additional coverage to the monthly benefit amount that can be used for student loan obligation. Coverage goes directly to the provider and is usually capped at $2,000-$2,500 per month.

Life Insurance

Life Insurance is a contract between a policy holder and an insurance company that in exchange for premiums, a death benefit is paid to beneficiaries upon the insured's passing.  

One question we often get about life insurance is "Do I need it?" and we usually present a few questions to think about:

  • Are you financially well off?

  • Are you responsible for others?

  • Are you indebted with student loans or mortgage?

There are 2 types of Life Insurance:

  1. Term - the simplest form of life insurance that only pays a death benefit within the term of the policy.

  2. Whole Life / Permanent - has a few variants and is more expensive because its trying to perform two functions: provide a death benefit AND function as an investment / savings account.  Variants are as foloow

  • Whole Life​

  • Universal Life

  • Variable Universal Life

No matter the type of policy needed, Blue Sclera Disability Insurance specializes in finding or creating the best coverage plans for each and every client’s needs. By working with many insurance companies we are able to generate numerous quotes to get you the best affordable coverage.  We work to help clients move on with their lives the best way possible while knowing that they are in good hands. 

Disability Insurance Basics: Services

Student Loan Rider

How This Rider May Have Helped Me With My Student Loans

In 1996 my student loan balance was $80,000 with a monthly payment of $890.00 which I could not afford.  

I put my student loans into "forbearance" which dropped my monthly loan payment down to $210.00 per month. Over the next five years I never missed a monthly payment and paid $12,600 into the loan.

What I didn't realize was my monthly "forbearance"  payment I had been making each month was only being APPLIED TO A PORTION OF THE INTEREST. There was a "daily interest accrual" of $27.92 being ADDED to the balance each DAY: $619.82 each MONTH: $7347.88 each YEAR: $37,189.40 ADDED OVER FIVE YEARS.

After FIVE YEARS of NEVER MISSING  a "forbearance" student loan payment, my student loan balance INCREASED from $80,000 to $117,189.40.  

Term for this is called "NEGATIVE AMORITIZATION".

At the time of my cerebral hemorrhage in 2008, my student loan balance had reached $180,000.


Presently, an average student loan: $194,150.00


  • conservative annual starting salary of $120,000

  • 8 year payment period at 7.5% = $2640.02 per month

What if your starting salary was only $32,000 per year as mine was when I returned to work?  

Disability Insurance Basics: Text

Underwriting Process

There are 2 components for Disability Insurance underwriting:

1). Financial - Financial component of underwriting helps insurer the insured's ability to continue to pay premiums. Depending on the amount of income needed to be replaced may be reflected by higher premiums.  W-2 employees are required to submit the previous year's tax return and current pay stub.

2). Medical - The medical component of underwriting is similar to a history and physical.  Information collected includes height, weight, BMI, blood pressure, current health status and family history, medications, preexisting conditions, smoking history and lifestyle activities.  Blood and urine are also collected. This history  gives the insurer opportunity to determine likelihood insured will go out on claim. The information gathered may result in higher premiums and possible exclusions that may be added to offer.

The primary purpose of underwriting is for companies to determine the likelihood that the insured will go out on claim. Premiums offered are a direct reflection of your occupational, financial and health status. It is to your advantage whenever one of the underwriting components is waived.

When securing Disability Insurance coverage WHILE IN RESIDENCY TRAINING - Financial Underwriting is WAIVED.

Policies that are secured while in training will be designed with the "Future Increase Option" rider attached.  This rider allows for additional coverage to be added while in PRIVATE PRACTICE at which time Medical Underwriting is WAIVED.

LIFE INSURANCE underwriting is more liberal and focuses primarily on "pre-existing' conditions.  Using the same approach with obtaining Disability Insurance coverage, it would be to your advantage to obtain "Term" Life Insurance while in your training.  Once training is completed and your out in private practice, one could at that time convert "Term" life insurance coverage into a "Permanent" Life Insurance policy WITHOUT the need for another physical exam.

In medicine, we are taught to encourage "Wellness" with patients.  The active process becoming aware of and making choices towards a healthy and fulfilling life.  We encourage the same approach with our financial practice by encouraging clients to be proactive with their financial planning.

Our Process:

1). Fact Finding Illustration Reviews

Doctor Using Digital Tablet

2). Application Submission
Paramed Exam

Taking blood pressue

3). Review Offers
Bind Coverage
Annual Reviews

Doctor and Patient
Disability Insurance Basics: Information

Additional Products for Private Practioners

Doctor and Patient
Hospital Corridor

Disability Buy-Out Coverage

Provides funds needed to purchase a disabled owner or partner's interest in the business if they become disabled.

Key Person Insurance 

Provides funds needed to help companies move forward and maintain a profit in the event a key employee becomes disabled.

Group Benefits

Provides supplemental coverage which allows a practice to maintain competitive as an employer of choice, keeping plan members engaged & productive and help them manage their health and wellness.

Disability Insurance Basics: Information


Members of Our Insurance Family We Work With

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Life Insurance

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Life Insurance

Disability Insurance Basics: Insurance Providers
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