MassMutual DI without Own Occupation Rider offered

[blitz]

My EM resident wife was contingently offered this (which I think was an awesome deal):

• Total DI Benefit $5K: $961


• Extended Partial Disability Benefit Rider $5K: $319


• Own Occupation Rider $5K: $211


• Automatic Additional Benefit Increase Rider 3%: $0


• Future Insurability Option Rider $10K: $194


• COLA Rider 3%: $176


• Total Annual Premium: $1863

Annual premiums based on: 34 y/o female, non-nicotine, occ class 4P, 35% unisex discount

 

However, after the medical history examination, MassMutual would not offer the Own Occupation Rider or COLA Rider at this time.  After 3 years, they will reconsider the underwriting for those 2 riders.  She just started residency, so the 3 year mark would be about when she becomes an attending.

 

What should we do?  I don't particularly care about the COLA Rider, but the Own Occupation Rider seems like it could be important.  My assumption is that the other insurance companies will be be 50-100% more expensive for the premiums, and they might not offer Own Occupation either.  How important is Own Occupation to a resident?

 

Thanks!

[East coast]

Why do you say 'assumption'? when you got other quotes, how did they compare?

[blitz]

East Coast,

Other offers with similar coverage & riders from same agent:

• Guardian: $4092/year or $341/month


• Principal: $3658/year or $320/month

Other offers with similar coverage & riders from another agent:

• Principal: $320/month


• Ohio National: $292/month


• Guardian: $300/month


• Ameritas: $343/month

So, this MassMutual offer stood out as significantly cheaper than those.  We have not initiated further underwriting & medical checks with the other insurance companies yet.

 

Rex,

I assume Own Occupation was denied/delayed, because she has a history of depression.  It is managed very well now, but had some flare ups several years ago.

 

Thanks!

[blitz]

The insurance agent explained that this isn't a big deal because the Mass Mutual Radius BASE definition is already specialty-specific own occupation and that the Own Occupation rider really only allows you to "double dip".  We don't really care about the ability to receive full DI benefits while working in another profession/specialty.  I can't tell if he is telling the truth or he is just a salesman trying to complete the contract to get his commission.  We really don't want to be denied a claim if she is disabled enough to not function as a EM doc, but healthy enough to do a residency in psychiatry, radiology, or internal.

 

Either way, we are currently leaning heavily toward just locking in this offer.  I am operating under the assumption that a DI policy without Own Occupation is not worthless and it is not worth doubling the premium cost to have it.

[Scott at MD Financial Services]

If you have a Mass policy without the own occupation rider then she will be paid her benefit if she can't do her occupation and is Not working in another occupation.  If the policy has the residual rider on it then if she goes back to work in another occupation or her occupation but at reduced capacity then the benefit would be paid as follows % of income lost is the % of benefit paid.  Now if she makes less than 20% of her per-disability income in her post disability occupation then full benefits are paid.

If she has the own occupation definition on her policy, now the policy is protecting her specialty and Not just her Income as above so if she can't do her specialty then full benefits are paid regardless of other income or occupation.  If however she does work part time or even full time in her specialty then the benefits would use the same equation of % of income lost is the % of benefit paid.

Personally I have never liked the phrase of 'double dip' since one contract you might buy protects your income and the other (more expensive) is being bought to protect your specialty since one is more expensive than the other one should expect the contract to behave differently at claim time.

Let me know if we can help further.

[blitz]

Thank you very much for explaining this in plain English.  It has settled many of our jitters about the value of this product even if it doesn't have the Own Occupation Rider.