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(00:28): Welcome. So today's episode of the cover, your assets podcast. This is Billy Gwaltney, and I'm very happy to be with you today. Today, we're going to talk about another one of the top tier disability contracts for physicians. This is with a company called Ameritas insurance company, a M E R I T a S. Ameritas is a mutual insurance company, which means the policy holders own the company. That's a good thing.
(00:52): It was established in 1887. So they've been around for a while, as far as the key elements of coverage to get to that, you will want to be sure your specialty disability policy has. The first one is the obvious one for a lot of folks, I guess, is the definition of disability. They do have, what's called a true a specialty on occupation, definition of disability, which means two things. One you're considered to be disabled. If you cannot perform the material duties of your occupation or specialty or sub-specialty and two, there's no penalty for income, you later earned doing a different job. Okay? So if you're a surgeon become disabled, you could then recharge or do telemedicine or consult, write a book, whatever you want to do, make an unlimited income doing that. And there's no penalty to your disability benefit. That's a non-negotiable to have with quality disability coverage for physicians and it's there.
(01:51): And it's true, whether you're surgeon or not. I just used a surgeon as an example, the Ameritas contract also includes a future insurability option, which allows you to increase coverage. If this option is on your policy, you can increase coverage over the course of time as your income increases up to a cap of 20,000 per month. What's important is that any discount you obtain when you originally purchased the policy is automatically included on the increase amounts as well. And also no additional medical underwriting is required at the time of the increase. And so those are important features when you go to increase a lot of residents or fellows and start out at say, 5,000 a month, and this option can allow them to ultimately increase up to 20,000 per month, depending on their income, over their careers and attending. And when they do that, they access the training discount and they also don't have to update the medical review.
(02:46): Important features. The Ameritas contract also includes a residual benefit and a recovery benefit. This is combined in something called an enhanced residual benefit. What the residual benefit does is it pays benefits. If you're partially disabled and suffer at least a 15% or greater loss of income, whatever that percentage is, loss of income is the policy will pay that percentage of your benefit. So it's not all or nothing. You don't have to be totally disabled to collect. And that's important. Also recovery benefit is vital. It pays if you medically recover from a disability and returned to work, but when you returned to work, your income does not recover to what it used to be before you were disabled. And that happens a lot. It's an important feature to have as productivity governs what physicians ultimately earn is very possible to come back from a disability and be medically cleared, but just never reached the same level of productivity.
(03:44): And so having the recovery benefit is important. Again, both the residual benefit and recovery benefit are combined in what's called an enhanced residual benefit rider. As far as the psychiatric benefit, the Ameritas contract offers either a two year psychiatric benefit or a five-year psychiatric benefit depending on your specialty. So the maximum they would offer would be five years. The minimum would be two years again, assuming medical underwriting qualification, and that's two or five years cumulative over the life of the policy. So you'll want to check for your specific situations, as far as which one of those are available to you. There's a presumptive benefit on the Ameritas contract. That's important to have the presumptive benefit pays if certain events happen and you continue to work in your specialty or regular job, and they will presume Ameritas will presume that you're totally disabled and pay your full benefit.
(04:42): And those events are the complete loss of hearing in both ears sight in both eyes, speech, or the use of any two limb. And it does not have to be permanent or your recoverable and the Ameritas contract is a bit unique in that if you qualify or trigger the presumptive benefit clause, then they will waive the elimination period. So the elimination period, you either have typically like a 90 day or 180 day elimination period, which is the amount of time you wait between the time of the disability and the first benefit check arriving. If you're disabled, January 1st, you get to check in April. If you have a 90 day elimination or check in July, if you have 180 day elimination, if you activate the presumptive benefit in your Ameritas policy, then they would waive that elimination period and pay you right away. The Ameritas contract also includes Cola rider or cost of living adjustment rider is an extra fee for this.
(05:45): It's not required. This would increase your benefits while your own claim to offset inflation. And so if you have that on your policy is going to pay the whatever the policy benefit is, is going to pay that at the time of claim for the first 12 months, then in the 13th month, it's going to bump it up by 3%, which is what most of our clients opt for. So 3% fixed increases is simple interest. So it's going to be the same 3% each year. They offer a zero to 6% compounded. That's that floats based on the consumer price index as well, that the co-writer is not required is generally desirable for situations where there's a potential for a disability lasting, you know, say a decade or longer. But again, it's not required as an optional feature. The Americas contract has a couple of neat perks that a lot of our clients like that I want to mention here briefly, the first one is a non disabling injury benefit.
(06:44): Ameris will pay benefits for medical treatment. You receive for minor injuries, what they consider being non disabling injuries and the way they calculate how much they'll pay is 50% of your base policy benefit or your total policy benefit up to a cap of 3000 per month. So if you had 5,000 a month of coverage, they would pay up to 2,500. Once you have 6,000 or more, they'll pay up to 3000 per occurrence towards any medical treatment for injuries, minor injuries. It doesn't have to be work-related. It doesn't have to be something where you miss work. It can be we've had clients, they sprain their ankle really bad, or they hurt themselves on a bike accident. So if you're at yourself, working out hiking, doing yard work, whatever, if you get that medically treated, they're going to pay you the cost of that treatment. Okay.
(07:35): And what's interesting is they pay it regardless of health insurance. So even if your health insurance reimburses all or the vast majority of it, they'll still pay you the total cost of that up to that cap of 3000 per occurrence. There's not an extra fee for that. There's no limit to the number of occurrences we've had clients collect multiple times from that it doesn't raise your rate. They can't exclude the item that you collected on theirs. There's really no downside to it. It's not available in every single state. I think it's available in like 46 out of 50 or something like that, but it's, there are a handful of States where, where it's not available. The same is true with what's called a good health benefit. That is a perk that Ameritas offers again in the States where it's approved, where every year somebody has a policy with Ameritas and does not file a disability claim, which is how they define good health.
(08:30): The elimination period will drop by two days. So if you have a 90 day elimination period on your policy in 15 years, it would automatically be 60 days instead of 90. And so that's an extra benefit check. That's significant and you don't pay an extra fee for that. And again, they provide that automatically again in the States where it's approved, which is the majority, the vast majority, there are a couple of ancillary features that Ameritas offers. They offer a student loan repayment rider. You have to pay extra for that. It would pay up to $2,500 towards to your student loan provider. If you're disabled, it's not available in every single state and it's available in the vast majority, but there are a few exceptions and there's a catastrophic rider that would pay an extra benefit if you're catastrophic, disabled, and unable to perform two or more activities of daily living.
(09:25): Lastly, when it comes to the Ameritas contract, they have two premium options. They have a non-cancelable and guaranteed renewable premium. That is a fixed rate. And that rate can never increase unless you increase coverage. They also offer a guaranteed, renewable, only premium. And what that is is an additional 16 or 17% discount that they offer in exchange for them having the contractual right, to increase the rate by occupation class in the future. And so if you're, if you're a physician and you're in, you're in an occupation class with a group of other physicians, and if they have bad claims experience in the state that you purchased that policy and they can petition the state insurance department to raise the rate for all policy holders in that occupation class, in that state, they've never had a rate increase in the 50 plus years. They've been in this marketplace, but they could potentially do that in the future is a slightly higher risk category.
(10:25): A lot of our clients liked that option because that, that savings will add up over time. But, you know, if that's, if that spoke to you, then you would want to stick with a non-cancelable and guaranteed renewable option where they can't do that. I hope you found this helpful Ameritas is an excellent contract. They're a very good company to work with. And so they're, they're definitely worthy of being considered an are certainly in the top tier of disability contracts. And they're only a few of them. This is not meant to be a comprehensive or exhaustive contract analysis, of course, but it should give you a good idea as to how they may be a fit for your situation. Please feel free to text me any time to arrange a conversation or questions on my cell is (704) 270-2376. Again, that's (704) 270-2376. I'd be happy to talk with you and helpful until next time. This is Billy Gwaltney. Thank you for carving out the time.
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