AMA Physician Disability Insurance Review (Updated 2023)
What Is American Medical Association?
Founded in 1847, the American Medical Association (AMA) is a national association that brings together 190+ specialty medical societies. The organization’s mission is to promote the art and science of medicine to improve public health. They deliver this mission by representing physicians in court, government and driving the future of medicine to tackle the biggest challenges in healthcare.
The AMA offers physicians and dentists disability insurance through their product called DisabilityPro. DisabilityPro is underwritten by The United States Life Insurance Company, based in New York City. The AMA’s disability insurance plan is an association policy which means it has significant differences from other physician disability insurance plans we’ve reviewed here at LeverageRx.
American Medical Association Disability Highlights
As mentioned, the AMA’s policy for doctors is called DisabilityPro. Let’s dive into the important features and riders you should be aware of.
Every disability insurance company on LeverageRx (Ameritas, Standard, Principal, MassMutual, Guardian, Ohio National) offers a own-occupation policy, which means they will pay the physician or dentist full benefits even if the physician or dentist could work in another field after sustaining the illness or injury. Unfortunately under the AMA disability insurance policy, total disability is defined to mean you are unable to perform the substantial and material duties of your current occupation, and you are not engaged in any other occupation. If you become disabled and can’t perform the duties of your specialty, but can work in another occupation, you will not receive full benefits at AMA like you would with any of the other companies mentioned above.
Non-Cancellable & Guaranteed Renewable
Non-cancellable and guaranteed renewable insurance policies cannot be modified, changed, or canceled by the insurance company. If a policy is not non-cancellable and guaranteed renewable, the company has the ability to modify features and increase premiums. The AMA disability insurance plan is not non-cancellable, meaning that the policy can be changed, premiums can be increased at any time, and the company can even cancel the policy at their discretion on any policy anniversary. This is in stark contrast to every other physician disability insurance company at LeverageRx. The “big six” disability insurance plans are non-cancellable and cannot be modified or cancelled at all as long as you pay the premium.
A benefit period is an option you have to determine up until what age you want to receive benefits. If you become injured at age 57, for example, do you want benefits until you are 65? or 70? The longer you want benefits, the more expensive your premium. AMA allows you to receive benefits up to age 67.
The elimination period in disability insurance is the length of time between the beginning of an injury or illness and the time the insurance company makes benefit payments to the policy owner. The AMA DisabilityPro policy allows you to choose an elimination period between 60 and 365 days. Other insurance providers offer elimination periods as short as 30 days, and as long as 720 days.
Disabilities arising from mental, nervous, and substance abuse issues account for a significant amount of disabilities. Some policies will limit the benefits paid for these types of disabilities to a certain amount of time, and will not pay benefits for the life of the policy. The AMA disability insurance plan limits the benefits paid for mental/nervous and substance abuse disabilities to 24 months, meaning that if you suffer a disability-related to a mental or nervous condition, the company will only pay you monthly benefits for 24 months regardless of how long your disability actually lasts.
AMA Physician Disability Insurance Riders
When you buy a physician disability insurance, whether from AMA or somewhere else, you have the option to add riders. A rider is an optional provision within the insurance contract that provides extra benefits or flexibility depending on your situation.
Cost-of-living Adjustment (COLA) Rider
A COLA rider is a built-in way to ensure that your benefits keep up with inflation. The annual increases are typically a fixed percentage or are tied to an inflation index. However, AMA does not provide a cost of living adjustment rider. This means that if you are paid benefits, they will not keep pace with inflation and will erode the value of any benefits paid over time. All the other individual plans allow you to obtain a cost of living adjustment rider with your individual disability insurance policy. These are typically a 3% or 6% annual increase in benefits paid which are capped and sometimes tied to an inflation index.
Residual Disability Rider
Residual or partial benefits allow the insured to collect benefits if they suffer a disability that results in a loss of income but is not considered totally disabled. Residual benefits typically require at least a 15-20% loss of income in order for the insured to receive benefits. As most disabilities start as partial disabilities, this is a critical feature of any disability insurance plan. Unfortunately, AMA requires the policyholder to be totally disabled and show a loss of income of at least 20% before benefits are paid. Unsurprisingly, all of the “big six” policies that cater to physicians do include a residual disability rider so you can receive payment even if you are only partially disabled.
Future Increase Rider
Future increase options allow you to increase your coverage in the future as your income grows. This is important for residents and fellows that will experience significant income increases over time. AMA allows you to buy a future purchase option but coverage can be increased once within the first 3 years of the policy or before your 40th birthday, whichever comes first. This is a major limitation for physicians in residency or early in practice that may experience significant increases in their income later in their career. All the other individual plans (Ameritas, Standard, Principle, Guardian, Ohio National, MassMutual) give you the option to increase your coverage each year up to age 55.
Alternatives to the American Medical Association
In case you haven’t noticed, there is a lot left to be desired in the AMA’s disability insurance product designed for doctors. We recommend you check out the alternatives, a couple examples are below.
Guardian has the best definition of total disability. To be considered totally disabled and receive full benefits, you must not be able to work the medical specialty you went to school for. However, even if you can work somewhere else, Guardian will pay you full benefits since the new job is not your specialty.
Learn More: Guardian Disability Insurance Review
MassMutual has a great COLA rider which guarantees an increase to the benefit every year. By the 6th year, the MassMutual COLA rider increases the payout by 16%! That said, their own-occupation is weak. If you can work at all, then MassMutual pay not pay you full benefits.
Learn More: MassMutual Disability Insurance Review
The Standard’s disability insurance product for physicians and dentists is called Platinum Advantage. It offers a maximum benefit period is to age 67, and they have a generous definition of total disability. Overall, this is a middle-of-the-road option.
Learn More: The Standard Disability Insurance Review