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Welcome to today's episode of the cover, your assets podcast. This is Billy Walton, your host, and I'm thrilled to be with you today. Today. We're gonna cover what is wrong with the AMA disability policy. Again, what is wrong with the AMA disability policy? And I commend people for wanting to obtain coverage. Obviously, the AMA is a big influence, and I don't know why this is the case I wasn't involved in it, but there are significant gaps in their disability policy for physicians, things that you should know about to factor in before you make a dis decision and these things are verified inside the contract.
(01:06): And so you would want to be sure do your own research of course make your own decision, but wanted to go over this because I do get this question a good bit about the AMA policy. So we're gonna cover five gaps that are part of, of the AMA policy that should be avoided if at all possible. The first one is that the AMA disability policy is technically a group policy. It's a, you get a group certificate. It is not an individual contract, and that is not good because with a group policy, by default the group, the AMA and the insurance company control the terms and you, as the participant do not control the terms. You have no control over the terms or the rate, the policy itself can be rescinded or, or terminated at any time without your approval. And so that's a big deal over the course of your career, properly designed true specialty on occupation, disability, coverages, private I work with thousands of physicians across the country.
(02:13): Their policies are individual is private between them and the insurance carrier. And obviously as the broker is involved, as the client wants us to be, which is usually a lot. And so you can carry that with you, wherever you go. And as long as the premium is paid, the contract cannot be rescinded or the definitions can't be changed. You have control with the AMA policy. That is not the case. Okay. And that is a significant issue. Also, depending on who you talk to, I'm not an attorney obviously, but I've read some things in the past where an employer group, long term disability can offset with another group policy. And so if your private coverage is actually a group policy, whether you know, that is the case or not, and you have an employer policy and you become disabled you may not be able to collect from both.
(03:04): That would be something you'd wanna make sure of with your employer's policy. If you have a private, properly designed own occupation policy with one of the top carriers, then you can collect from that policy and your employer policy. If you become disabled, they do not offset each other. So again, the first gap is that the AMA policy is a group certificate group policy, not an individual contract and that in and of itself should be a deal killer. I'm just knowing what I know. I would not want that obviously. Sure. Call just food for thought. The second gap app is related to this, in that the discounts and the premium with the AMA are not guaranteed. They can be raised by classification by age or group, or what have you. The discount is not locked in. The discount can be removed. And that makes sense because the first gap was that the policy itself can be removed.
(03:59): So if policy itself is not contractually guaranteed to be in place, then it makes sense that, of course the, the discount is not guaranteed either. And so I, if you structure a policy correctly with one of the top carriers, with a specialist that does this all day, every day, like myself, or, or whoever else you may be talking to hopefully there are specialists, then the discount would be permanent. Once you get the discount, you keep it for life. You keep that rate for life. It doesn't change just because an insurance company decide to change something. The third gap is that the definition of disability with the AMA policy is not the true specialty on patient definition. Their website does call it the own specialty disability definition, which says that if you're UN unable to perform the duties of your own medical specialty benefits can be payable up to age 67.
(04:56): But then if you scroll down to their residual benefit definition, the coverage allows you to make a gradual transition back to full-time employment. You can receive residual benefit if you return to work on a part-time basis in your own specialty or any other specialty or occupation, if your monthly income is reduced by at least 20%, and you first receive benefits for total disability, what that translates to is that if you earn income from other source, from a different job, while you're on claim, then your disability benefit with that policy would be impacted. It would be reduced. It may be eliminated. It just depends on how much income you earn, but it gets complicated is what this is the bottom line, a properly designed true specialty on occupation policy would allow you to, to, if you're disabled from your own specific occupation, then you can earn an unlimited amount of income from a different occupation, and it would not impact your disability benefit at all.
(05:53): That's a significant difference. The AMA policy does not contain that definition. That's the third, the fourth issue is related to the residual benefit. The AMA policy does contain a residual benefit as I read. And I wanna read this to you again, you can receive residual benefit if you return to work on a part-time basis in your own specialty or another specialty, if your income is reduced by at least 20%, and you first receive benefits for total disability. So their residual benefit requires a period of total disability benefits being received prior to paying benefits for residual benefit. That's an out clause. It's very possible for someone to be partially disabled, which is what residual benefits cover residually disabled means you're partially disabled. It's very possible for someone to be partially disabled without ever having been totally disabled first. Okay. And so if a residual benefit requires a period of total disability, it's being paid first before paying the residual benefit.
(07:02): In my professional opinion, what I've seen that strikes me as an out clause because the properly designed true specialty contracts do not have that clause. You can be partially disabled residually disabled from day one. And if you meet the elimination period, collect partial benefits or residual benefits, okay? So that is something that should be avoided if at all possible the fifth gap is that the AMA policy does not contain a long term. Recovery benefit. Recovery benefit is really important. It pays if you medically recover from a disability return to, but when you return to work, your income does not recover to what it used to be. I've done previous podcasts on this. You may have heard this before. That's a really important feature, a properly designed true specialty on occupation. Disability contract would include a long term recovery benefit. You would wanna make sure that's there.
(07:57): We've had clients collect for over a decade from that it's an important feature. The AMA policy does not contain that. Okay. I went through five gaps pretty quick. The bottom line is that the AMA policy is probably cheaper in a lot of cases. And the reason is because it's weaker, it's a weak policy and, and is just much less it's your decision, of course, but this is just a word to the why as the companies that I broker that a specialist brokers are ultimately the only ones you'd want to have. If you had to file a claim, you would notice a significant difference in a lot of cases, if not most cases, if you file a claim with the AMA policy, the, the biggest gap is I can circle back to the first gap. And that is that it's a group policy, which means you have no control.
(08:48): And so think, think ahead, 20 years from now, your health has changed. You're older. And all of a sudden you get a notification that the, the AMA policy is gonna be terminated for any number of reasons. They, they probably don't owe you a reason for that. They can just get rid of it and you have no recourse and you just have no policy. So what do you do with that? They may say that there's recourse for that, but if you can avoid having a group policy for your private coverage, please avoid it. Please do that word to the wise. Thank you for your time. As always, I'm grateful for that. Be happy to discuss your situation in more detail, free feel, feel free to text me at 7 0 4 2 7 0 2 3 7 6. Again, that 7 0 4 2 2 3 7 6. And again, this is Billy Walton until we meet again. Thank you again for your time. Take care.
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