As a doctor, you understand the financial impact of unexpected events. You see it firsthand everyday.
Just like medicine, there are preventative financial measures that can be taken ahead of time. For doctors, this means protecting your income with a disability insurance policy, like HH750 from Principal.
For a complete overview of the key provisions and options that HH750 has to offer, read our Principal disability insurance review here.
Principal disability insurance policy basics
Principal's disability insurance policy, HH750, is underwritten and issued by Principal Life Insurance Company.
Does it have an own-occupation provision? Principal’s regular occupation rider defines total disability as being unable to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation, as long as you are not able to work in your occupation.
If you have limited your occupation to the performance of material and substantial duties of a single medical specialty or single dental specialty, Principal will deem that specialty to be your occupation.
Principal also offers a modified own opccupation, which defines total disability as being unable to perform the material and substantial duties of your occupation, and not being gainfully employed.
Is the policy non cancelable or guaranteed renewable? The policy is non-cancelable and guaranteed renewable to age 65.
What is the maximum benefit period? To age 70. You can also choose benefit periods to age 67 or 65, as well as benefits period of two years or five years.
What elimination periods are available? You can purchase coverage with 30-day, 60-day, 90-day, 180-day, and 365-day elimination periods.
Does the policy pay benefits for mental disorders? Principal carriers a 24-month limit for mental/nervous disorders with own-occupation definition of disability.
How does Principal's cost-of-living adjustment (COLA) rider work?
Principal’s COLA benefit is increased on a compound basis. A 3 percent or 6 percent COLA maximum may be selected. The insured may, upon returning to work full time, keep any increased disability benefit without evidence of good health by paying the required increased premium.
How does Principal's residual disability rider work?
Principal offers a partial disability benefit. Under this rider, the requirements for being considered residually disabled include:
- A loss of earnings of at least 20 percent; AND
- The inability to perform all the substantial and material duties of your occupation, or to work full time in your occupation.
Benefits you are paid under the rider:
- Your will be paid 100 percent of your policy’s monthly benefit for total disability if your loss of earnings exceeds 75 percent.
- For earnings losses of less than 75 percent, you will receive a benefit proportional to your loss of pre-disability income.
- You will receive a minimum of 50 percent of your policy’s monthly benefit for total disability for the first six months of residual disability.
- You will receive 50 percent of the policy’s monthly benefit for total disability if your retired or unemployed.
Additional policy benefits
Benefit update rider. Available for no additional premium, this rider allows you to increase policy benefits every three years up to the maximum issue and participation limits, up to age 55, without medical evidence of insurability.
Principal offers advanced options on this rider, enabling the insured to take the option early with the loss or reduction of your group long-term disability plan or at least 50 percent increase in sustainable earnings.
Catastrophic disability rider. This rider provides additional benefits in the event you are unable to perform at least two of the six activities for daily living; or you require “substantial supervision due to severe cognitive impairment.”
Future benefit increase rider. Available for no additional premium and renewable every six years. The increases are based on the Consumer Price Index with a minimum of 4 percent compounded and maximum of 10 percent compounded.
In addition to the CPI increase, the insured may also be eligible for an additional benefit increase if eligible based on financial information. When combined together, the CPI increase and the additional benefit increase cannot be greater than $500.
Presumptive total disability benefit. The policy will waive your elimination period if you sustain a total loss of at least one of the following: sight in both eyes,hearing in both ears, use of both hands, use of both feet, use of one hand and one foot. The loss is not required to be permanent and the elimination period would be waived even if you are able to work.
Serious illness benefit. For no additional premium, this rider provides a one-time lump sum benefit equal to six times the policy’s ultimate monthly benefit, in addition to the other benefits provided by the policy, if the Insured becomes disabled under the policy and diagnosed with coronary artery bypass graft surgery, cancer or stroke.
Ready for a deeper dive? Check out:
The Ultimate Guide to Physician Disability Insurance in 2020