The AMA Disability Plan
Most every Physician is aware that you are supposed to purchase “Own occupation” also known as “Own Specialty” disability insurance. The understanding is that if you purchase a policy that an insurance provider is calling “own occupation” or “own specialty” you are getting a plan that will pay you if you suffer a disability that limits your ability to work in your specialty and will continue to pay your FULL benefit to you even if you work in another occupation. While it’s true that these policies exist, what you didn’t know is that in the insurance industry “own occupation” or “own specialty” can mean up to three different things and the AMA, ACOG, ACP, ACS, AAP, etc. all know that you are unaware of this.
Here’s why they get away with it. Technically speaking, Own Occupation coverage means that so long as the insurance carrier recognizes your specialty as your occupation and they are not forcing you to work in another occupation then it’s OK if they advertise their product as being Occupation or specialty-specific. What you didn’t realize was that this does NOT mean they will allow you to work in another occupation and still be entitled to your full benefit or any benefit at all. It simply means they won’t force you to go to work in another occupation but they will not pay you your full benefit amount if you are earning more than 15% of your prior earned income in another occupation.
Let’s take a look at an advertisement piece from the AMA. Right from the AMA website – own occupation” Disability Definition:
Unlike some other disability plans, this plan contains a preferred definition of disability. If you are unable to perform the duties of "your own medical specialty," benefits CAN be payable up to age 67.AMA Insurance – Disability Pro Physician Disability Insurance
Rates may be adjusted on a class-wide basis. For example, a "class" may be a group of insureds of the same age group.AMA Insurance – Disability Pro Physician Disability Insurance
You can receive a 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 percent, and you first receive benefits for total disability. The residual benefit is based on a percentage of your total monthly disability benefit.AMA Insurance – Disability Pro Physician Disability Insurance
After reading this it’s no wonder why so many physicians end up with the AMA plan. But here’s what your policy will say if you buy it through them:
Totally Disabled or Total Disability means: – Your COMPLETE inability to perform the substantial and material duties of your Current Occupation, AND you ARE NOT ENGAGED IN ANY OTHER OCCUPATION.
That definitely doesn’t sound like the “Own Occupation/Own Specialty” coverage you’ve heard about and it definitely doesn’t sound like what the AMA advertises to you on their website.
Don’t end up making the same mistakes that thousands of other physicians make simply because they are misinformed. As of today True “Own Occupation/Own Specialty” disability insurance can only be purchased individually and it can only be purchased through the following insurance carriers: Guardian, Ameritas, Principal, The Standard, Ohio National, and Mass Mutual.
Just for comparison purposes, here is the same definition of total disability from the Guardian carrier to compare to the definition from the AMA:
Total Disability or Totally Disabled: This means that, solely due to injury or sickness, you are not able to perform the material and substantial duties of Your Occupation. You will be Totally Disabled even if you are Gainfully Employed in another occupation.
See below actual images from the true AMA contract offered through NY Life.