Many of the disabling injuries and illness that lead to disability insurance claims are such that you can eventually recover. You may even regain your full capabilities and be able to practice medicine as proficiently as you did before your disability.
But even after you recover physically, it may take a little longer to fully recover financially.
For example, if you operate your own practice and had to leave for several months, some of your patients may find other providers. It may be months before you replace those lost patients and revive your full income.
That’s why physician disability insurance policies offer recovery benefits. A recovery benefit will pay a monthly benefit to make up any gaps in your pre-disability income and what you earn after you’ve recovered from total or residual disability.
Most insurance companies include recovery benefits with residual disability riders. A residual or partial disability rider covers you in the event you become disabled but are still able to work in a limited capacity in your current area of practice.
Typically in these situations, you may be able to work part time but still lose income because of an injury or illness that restricts you from working full-time.
Carriers that offer both a basic and enhanced residual disability rider may include the recovery benefit on both options or on just the enhanced rider.
It’s important to understand the provisions of your policy’s recovery benefit, including the benefit period available and how much income loss you need after recovery to qualify.
One of the key aspects of recovery benefits is that you have to show your loss of earnings was caused by your disability and not primarily by other intervening causes. Insurance companies reserve the right to re-evaluate whether that relationship continues to exist during the transition or recovery period.
Below is an overview of recovery benefit provisions of the leading carriers offering disability insurance policies for doctors.
Ameritas offers a recovery benefit only on its enhanced residual disability rider.
After satisfying the elimination period and upon full recovery and return to work, the rider will pay a recovery benefit if you continue to suffer a loss of earnings of at least 15 percent.
The benefit is payable in the month immediately following a period for which monthly disability benefits have been paid under this policy, provided you have returned to work and performing 80 percent or more of your usual duties.
The recovery benefit will stop if the loss of earnings due to your disability falls below 15 percent for two consecutive months, three non-consecutive months, or the date the residual maximum benefit period ends.
MassMutual includes a recovery benefit on its extended partial disability benefits rider. It will be paid following your full recovery and return to work if you have a loss of pre-disability income of at least 15 percent.
The monthly payment will be determined by multiplying the rider’s partial disability monthly benefit times the percentage loss of income due to your disability.
Ohio National offers a transitional return to work benefit only on its enhanced residual disability rider.
This benefit will be paid if you have returned to work full-time and have a loss of earnings of at least 15 percent.
The monthly transitional benefit is determined using the same procedure that is used to determine the Residual Monthly Benefit.
The Standard offers a recovery benefit on both its basic and enhanced residual disability riders.
For both riders, a recovery benefit will be paid if you are working in your regular occupation, and working at least as many hours as you worked prior to disability; and you continue to have a loss of earnings of at least 20 percent. A proportional benefit is payable for the full benefit period.
Guardian offers recovery benefits on both its basic and enhanced partial disability benefits.
Under the enhanced partial disability benefit rider, benefits may continue to be payable upon recovery— after a disability has ended—if there continues to be at least a 15 percent income loss. These benefits are payable up to the end of the benefit period.
The basic partial disability benefit rider pays a lump sum recovery benefit of two times the monthly benefit if disability ends within 12 months after the end of the policy’s elimination period.
Principal’s basic partial disability benefit includes a recovery benefit if you’re back to work full-time and your loss of income is at least 20 percent. A total or residual disability benefit must have been paid to qualify for a recovery benefit.
Ready for a deeper dive? We've got you covered:
The Ultimate Guide to Physician Disability Insurance in 2021
Joel Palmer is a writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.