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Disability Income Insurance: How Today’s Decisions Impact Tomorrow’s Choices

Kanan Sachdeva, Northwestern Mutual

Doctors and dentists nationwide clearly understand the importance of having disability income insurance (DI) to protect the time and money they’ve invested in their profession. And most have considered at length what would happen to them, their incomes, their families and their careers if they suddenly found themselves injured or ill – leading them to seek the protection a DI policy provides.

So what’s the problem? DI is a complex buying decision – with varying stipulations in policy contracts that impact the type of benefits a policy owner might receive at time of claim. The problem is that busy medical and dental professionals can’t find the time to fully understand key concepts in their policies, and many would be surprised to find how those details could affect them at the time of claim.

Many doctors think that if they are unable to perform their principal medical duty, their “bread and butter,” they would be totally disabled and receive full disability benefits. But that’s not typically the case with “own occupation” coverage (the kind of DI that has traditionally been recommended for medical and dental professionals). It would only be true if the insurance company determines that they have only one principal duty at the time of claim. And, of course, most medical professionals have more than one principal duty.

Consider the example of a surgeon, whose primary source of income comes from performing surgery, but who also does non-surgical patient consultations. If this surgeon suffers a hand injury and is no longer able to perform surgery, they would likely consider themselves totally disabled. However – based on typical “own occupation” and even “own specialty” definitions – if they are still able to consult with patients, they may only be considered partially disabled and would only receive partial disability benefits.

To help eliminate this kind of misperception, Northwestern Mutual recently introduced the “Medical Occupation Definition” of total disability. The only definition of its kind in the industry, it was designed specifically for – and with input from – the physicians and dentists it impacts.

The Medical Occupation Definition differs from typical “own occupation” and “own specialty” definitions because it provides medical professionals, in certain situations, the flexibility to choose between continuing to work and receiving a partial benefit, or not working at all and receiving full benefits. This is an important difference that typical “own occupation” and “own specialty” definitions do not offer at the time of claim.

Consider the chart below, which outlines how the definitions compare in various circumstances:


If unable to do all of your principal duties AND not gainfully employed

If unable to do all of your principal duties AND are gainfully employed in another occupation

If capable of doing SOME, but not ALL of your principal duties

Typical “Own Occupation” or “Own Specialty” definitions

You will be considered totally disabled and receive full disability benefits

You will be considered totally disabled and receive full disability benefits

You will be considered partially disabled and must be gainfully employed to receive a proportionate benefit

Northwestern Mutual’s Medical Occupation Definition

You will be considered totally disabled and receive full disability benefits

You can earn up to 20% of your pre-disability income and still receive full disability benefits

In specific circumstances, you will have the flexibility to decide to:

-          Continue gainful employment and receive a proportionate benefit


-          Cease gainful employment and receive full monthly benefits



Typical “Own Occupation”

Medical Occupation Definition

As you can see, there are times when the outcome of both definitions is the same, and times when one provides advantages over the other. Unfortunately, no one can predict the type of disability they will have, or control whether that disability will prevent them from doing their job (or seeking alternative employment). This is why the flexibility of the Medical Occupation Definition is so critical; at a time when so much hangs in balance, it provides medical professionals a choice about their future.

Northwestern Mutual has created an online tool called the “DI Checkup” that illustrates how the Medical Occupation Definition compares with other definitions of total disability. Medical professionals are invited to visit Kanan Sachdeva’s website at kanansachdeva.com to access the tool, enter information about their practice, and find out for themselves how each definition would impact them at the time of claim.

The definition used in your policy is just one of the variables that must be considered carefully when choosing disability insurance. Although the prospect of having to rely on any type of disability insurance is something no one likes to think about, taking the time to do so can lead to a vitally important outcome:  knowledge that what you want and what you need matches what your policy can do for you.

(Article prepared by Northwestern Mutual with the cooperation of Kanan Sachdeva. Kanan Sachdeva is a Financial Representative with Northwestern Mutual the marketing name for The Northwestern Mutual Life Insurance Company (NM), Milwaukee, Wisconsin, and its subsidiaries. Kanan Sachdeva is an agent of NM based in Southborough, MA. To contact Kanan Sachdeva, please call (781) 248-8640, e-mail at kanan.sachdeva@nmfn.com or visit kanansachdeva.com. This information is not intended as legal or tax advice. )

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