There is a growing trend of insureds with IDI policies who do not have a good understanding of what the policies insure and what they do not. While the contracts set criteria for “disability”, the larger definitive umbrella defines “loss of income” as the first determiner of benefit eligibility.
In other words, in order to qualify for benefits, insureds must be able to prove via Profit & Loss Statements, tax returns and corporate reports that he/she has a loss of income of, most often, 20%. This criteria defines eligibility for benefits of “loss of income”, not entirely relying on medical disability.
This situation occurs most often when insureds own their own practices, stop working, but continue to pay themselves 100% of their salary. Somehow they are of the mindset that their medical disability is sufficient to qualify for benefits. The first thing any insurer will do is verify “income lost” as a result of disability. If there has been no “income lost”, then there is no income to replace. Therefore, while the insured might very well be unable to work, and compensating oneself 100% of salary while not working, claims won’t be paid without loss of income.
Therefore, IDI policies are basically “Income Replacement” policies that replace lost income due to disability. Medical disability alone won’t get benefits paid. Keep in mind, insurance in general, is set up to prevent insureds from making a profit while claiming disability. A very small percentage of IDI policies have different requirements, but these are rare.
While I am on the subject of IDI policies, I want to remind insureds that you cannot just stop working because you think you can’t, or don’t want to. There should be a history of consultation and treatment for conditions, and a documented physician, on record, recommending that you seek disability status. Only a physician can recommend disability. You can’t just stop working on your own volition.
IDI insureds often have an “entitlement” outlook, that sometimes gets them into trouble. Know what you’re buying and what it means for you.
http://www.disabilityclaimssolutions.com
