Premiums:

There’s something else that I’d like to talk about, and it involves your payment for disability benefits. Your payments are called premiums, and typically you pay -- if it’s a private policy you pay the premiums yourself. The premiums are typically paid on an annual basis, quarterly, or semi-annually, so meaning every few months, every six month or once a year. If you’re employed by someone and these disability benefits are from your employer, they’re typically paying the premiums. Sometimes you are paying a part of those premiums. But what happens when you become disabled?

The company has to make a decision that you’re entitled to disability benefits. And when that happens they are waiving. Most if not all policies provide that you do not have to pay your disability benefits any longer once you become disabled. So you want to be sure that happens. And you would get any premiums you paid during the investigation period, that would be returned to you.

Another thing to remember though is most Americans have life insurance, and you pay a premium for that, don’t you? Well, often there’s a clause in those policies called a disability waiver of premium. So when you go to your drawer and pull out your disability policies, pull out your life insurance policies too. And even your policies for charge cards, because sometimes they will waive interest, and there’s other bells and whistles that come along with becoming disabled. Becoming disabled is a terrible thing but you need to go out and obtain what other benefits you have of that status, which might mean mortgage payment issues, you may be able to resolve some financing charges, you may have waiver of life insurance benefits, and other things as well.

If you are a physician and you become disabled and cannot return to the workplace, typically you have -- of course you have medical malpractice insurance but something that’s a large encumbrance would be what they call a disability -- sorry -- a malpractice tail. Because when you stop working you may have people that are going to make claims for the period of time that you were working. So if you stop working in 2005 your insurance company should still honor claims made in 2006, 2007, 2008. And you don’t want to have malpractice insurance anymore because you’re not working, but you need to provide your protection should you become sued -- involved in a lawsuit.

So what happens is you have what’s called tail insurance. Tail insurance means that the insurance company will still cover you for claims made for a period of time when you were working. That’s very costly. The reason I’m bringing it up is if you become disabled, look to your malpractice insurance policy. There may be a waiver of tail premiums if you are determined to be disabled, and that’s very important.