Disability Insurance Carrier Comparisons
Six major carriers write individual disability insurance: Ameritas, Guardian, Lloyd’s of London, MassMutual, Principal, and The Standard. The decision of whether a claim gets paid is based on the specimen policy, not the brochure. This chart compares actual policy language on incomes loss threshold triggers, monthly benefit calculations, benefit periods, benefit provisions, and own occupation definitions by carrier.
Disability Insurance Provisions Comparison Chart
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Ameritas Life Insurance Corp. 4501NC · Enhanced Residual Rider (AERES) |
Guardian Berkshire Life Insurance Co. of America ICC16 18ID · Provider Choice + Enhanced Partial Rider |
Lloyd’s Petersen International Underwriters PDI111521 · Optional Residual Rider |
Mass Mutual Massachusetts Mutual Life Insurance Co. ICC15-XLIS-RC · Extended Partial Disability (EPR) |
Principal Principal Life Insurance Company ICC22-800-IDI · Income Protector |
The Standard Standard Insurance Company B180(7/17) · Platinum Advantage + Residual Riders |
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| 1 · Income Loss Threshold That Triggers Residual Benefits | ||||||
| Minimum income loss required % of prior earnings that must be lost before residual benefits begin |
15% loss of monthly earnings (Specimen) One of the lowest thresholds available. Rider text states: loss must be “at least 15% of your prior monthly earnings” due to sickness or injury. |
Loss of Income due to disability (Specimen) Guardian’s Enhanced Partial rider defines “Loss of Income” as the difference between Prior Income and Current Income attributable solely to the Injury or Sickness. No explicit percentage floor in the base rider — benefit scales proportionally with income loss. Must be Gainfully Employed. |
Optional rider — threshold per rider terms (Specimen) Base Lloyd’s specimen (PDI111521) notes “Residual Disability is an optional benefit that only applies if the rider was purchased.” Rider text not included in this specimen. Typical Lloyd’s/PIU residual riders require income loss and inability to perform all material duties. |
20–80% loss of Predisability Earnings (Standard) EPR benefit is payable when Monthly Earnings fall to 20%–80% of Predisability Earnings. Below 20% earnings remaining triggers full benefit. Above 80% earnings remaining, no EPR benefit is paid. |
Loss of Earnings from own occupation (Specimen) Principal’s Residual Disability Benefit Rider requires a loss of Earnings due to Disability. The specimen confirms “Earnings” excludes unearned income. No explicit minimum percentage floor — benefit scales pro-rata with the earnings loss ratio. |
20% loss of Predisability Earnings (Enhanced); 15–20% for Short-Term version (Specimen) Specimen lists Basic, Enhanced, and Short-Term Residual riders. Enhanced Residual: benefit payable when Monthly Earnings are 20%–80% of Predisability Earnings. |
| 2 · Monthly Benefit Calculation Formula | ||||||
| Residual benefit formula How the monthly residual check is calculated |
Residual Monthly Benefit = (Loss of Monthly Earnings / Prior Monthly Earnings) x Base Monthly Benefit (Specimen) First 6 months minimum: The greater of (a) 50% of base monthly benefit OR (b) the formula result. 75%+ loss rule: If loss exceeds 75% of prior monthly earnings, treated as 100% loss and full base benefit is paid. Prior earnings: Average of highest 12-month or 24-month period before disability, indexed annually for CPI-U after year 1. |
Partial Disability Benefit = (Loss of Income / Prior Income) x Monthly Benefit (Specimen) Prior Income: Average monthly income for either (a) last 24 calendar months, or (b) the two calendar years with highest earnings in the three years before disability — whichever is greater. Current Income: All income for services during disability, excluding pre-disability earned-but-not-yet-received income. Full benefit floor: If loss of income is 100% or more of Prior Income, full monthly benefit is paid. |
Proportional formula — rider required (Specimen) Rider language not included in this specimen. Lloyd’s/PIU residual riders typically use a proportional income-loss formula: (income loss / pre-disability income) x base benefit. Confirm with current rider filing. |
EPR Benefit = [(Predisability Earnings – Monthly Earnings) / Predisability Earnings] x Monthly Benefit (Standard) Full benefit if earnings are less than 20% of predisability earnings. No benefit if earnings are greater than 80% of predisability earnings. Prior earnings: Average of the 24 months before disability began. |
Residual Benefit = (Loss of Earnings / Prior Earnings) x Maximum Monthly Benefit (Standard) Prior Earnings: Average monthly Earnings for the 12 months before disability. Current Earnings: Earnings during the disability period, excludes passive/unearned income. Minimum benefit: Typically 50% of base benefit for first 6 months. |
Residual Benefit = [(Predisability Earnings – Monthly Earnings) / Predisability Earnings] x Basic Monthly Benefit (Standard) Full benefit trigger: If Monthly Earnings are less than 20% of Predisability Earnings, full Basic Monthly Benefit is paid. Basic Residual Rider: Flat 50% of base benefit when qualifying criteria met. Enhanced Residual Rider: Proportional formula above; includes Recovery Benefit. |
| 3 · Prior Total Disability Requirement — Can Residual Trigger Independently? | ||||||
| Independent trigger Does residual require a prior period of total disability, or can it trigger on its own? |
Fully independent — no prior total disability required (Specimen) Ameritas AERES rider states benefits begin the later of: (1) the day after the end of the Elimination Period, OR (2) the day following a period of total disability for which benefits have been paid. Either path is valid. Days of both total and residual disability satisfy the elimination period. |
Fully independent — no prior total disability required (Specimen) Guardian’s Enhanced Partial Disability Benefit Rider uses its own Elimination/Accumulation Period. The insured must satisfy the Accumulation Period but does not need to first be Totally Disabled. Residual days count toward satisfying the Elimination Period. |
Rider-dependent — verify current rider (Specimen) Lloyd’s specimen confirms residual is an optional rider. The base policy elimination period can be satisfied by successive periods of Total Disability or Residual Disability, but rider must be reviewed for independence trigger language. |
Fully independent — no prior total disability required (Standard) MassMutual’s EPR rider allows residual disability claims to trigger directly after the elimination period without a prior total disability period. Both total and partial disability days satisfy the elimination period. |
Fully independent — no prior total disability required (Standard) Principal’s residual/partial disability rider triggers after the elimination period regardless of whether any total disability period occurred. The elimination period can be met by residual disability days alone. |
Fully independent — no prior total disability required (Standard) Standard’s Enhanced Residual Disability Benefit Rider triggers after the Benefit Waiting Period is satisfied, independent of any total disability. Days of Disability during the Benefit Waiting Period need not be consecutive. |
| 4 · Benefit Period for Residual Disability | ||||||
| Residual benefit period Maximum duration for which residual benefits can be paid |
Remaining unused portion of the Total Disability Maximum Benefit Period (Specimen) The Residual Maximum Benefit Period equals the total unused portion of the maximum benefit period for total disability shown on the schedule. Combined total and residual payments cannot exceed this period. Typically to Age 65/67 when selected. |
Same Benefit Period as Total Disability — to Age 65, 67, or 70 (Specimen) Benefit Periods of To Age 70/67/65 or 10/5/2 Years are available. The Enhanced Partial rider benefit period matches the policy benefit period. To Age 70 option available for physicians — distinctive among carriers. |
Per Schedule of Benefits / rider terms (Specimen) The residual rider benefit period is set at time of issue and shown on the Schedule of Benefits (Section 1-D). Confirm with current rider. |
To Age 65 (base); Extended to Age 65 via Maximum Benefit Period Endorsement (Specimen) Specimen shows coverage end date for Extended Partial Disability corresponding to the policy’s non-cancellable period to age 65. A separate Maximum Benefit Period Endorsement is available with its own premium schedule. |
Same as base policy Maximum Benefit Period — 2 years, 5 years, To Age 65/67/70 (Specimen) Options include To Age 65, 67, and 70. Residual benefits run within this same period. To Age 70 available depending on occupation class. |
Same as base policy Maximum Benefit Period — to Age 67 in this specimen (Specimen) Maximum Benefit Period schedule applies (e.g., if disability begins at 62: 60 months; at 63: 48 months). Enhanced Residual Disability Benefit Rider matches base benefit period. |
| 5 · Recovery Benefit Provisions | ||||||
| Recovery benefit Protections after returning to work — continued payments if income remains depressed |
Explicit Recovery Benefit provision (Specimen) Triggers after a disability benefit period ends if the insured has returned to work, is performing material duties 80% or more of prior time, and still has 15% or more loss of monthly earnings demonstrably caused by the prior disability. Duration: Continues up to the residual maximum benefit period. |
Recovery Benefit — income-loss based, ongoing (Specimen) Benefits continue post-recovery as long as Loss of Income persists due to the disability. Because Guardian uses an income-loss formula, benefits naturally continue as long as Current Income remains below Prior Income due to the disabling condition. Prior Income protection: Uses the best 24-month or best-2-of-3-years average. |
Recovery benefit per rider — verify current rider (Specimen) Lloyd’s base specimen does not contain recovery benefit language. Standard Lloyd’s/PIU residual riders may include recovery provisions, but this must be confirmed against the current executed rider. |
Recovery Benefit included in EPR rider (Standard) After returning to full-time work following a disability for which EPR benefits were paid, if Monthly Earnings remain below Predisability Earnings due to the disability, a proportional recovery benefit continues. Duration: up to the remaining Maximum Benefit Period. |
Recovery Benefit — proportional, ongoing post-return (Standard) Provides recovery benefits when an insured has returned to Full Time Work but Earnings remain below prior levels due to the disability. Benefit calculated using the same proportional formula. |
Recovery Benefit included — Enhanced Residual Rider only (Specimen) The Basic Residual Rider does not include the Recovery Benefit — the Enhanced version is required. The base policy confirms premiums are waived while Recovery Benefits are payable. Short-Term Residual Rider: does not include recovery benefit. |
| 6 · Physician-Specific Nuances and Notable Provisions | ||||||
| Key nuances for physicians Provisions especially relevant to medical specialists |
True specialty own-occupation for physicians/dentists (specimen confirmed) 15% income loss threshold is the lowest tested — ideal for physicians cutting back patient load CPI-U indexing of prior earnings during claim protects against inflation eroding residual benefit Accounting method choice (cash or accrual) accommodates both employed and practice-owner physicians |
Surgical Procedure Enhancement and Hands-on Patient Care Enhancement (confirmed in specimen): If more than 50% of income comes from surgical procedures or hands-on care, total disability is triggered solely by loss of that capacity To Age 70 benefit period available Income includes business profits from privately held entities Prior Income = best 24 months OR best 2-of-3 years |
Lloyd’s specialty own-occupation language confirmed in specimen Subjective Pain exclusion applies — relevant for pain-management physicians Residual rider is optional add-on; base policy is total-disability-only Useful as excess/supplemental layer above group DI limits Expiry-date policy — not lifetime renewable in same way as Big 5 carriers |
Participating policy — eligible for dividends (not guaranteed) RetireGuard rider protects retirement contributions during disability — unique to MassMutual Own Occupation Rider available separately from the EPR — both can be elected simultaneously Short-Term Disability Benefits Rider (STR) included within the EPR structure |
Specialty own-occupation confirmed: “single professionally recognized specialty in medicine or dentistry” is deemed own occupation True Own Occupation add-on available at additional cost Annual Increase Rider (AIR): automatic 3% benefit increase, no additional cost, to earlier of 20 years or age 50 Pandemic suspension provision — unique feature allowing suspension during declared pandemic |
Specialty own-occupation confirmed: “single specialty recognized by ABMS, AOABOS, or ADA” is deemed own occupation Three-tier residual structure: Basic / Enhanced / Short-Term Family Care Benefit: pays if working reduced hours to care for a seriously ill family member — no total disability required Survivor Benefit: 3x basic monthly benefit paid to beneficiary if death occurs while benefits are payable Platinum Advantage specimen is for limited states (CT, DE, DC, FL, MT, ND, SD) |
Definition of Disability
The disability definition is what a policyholder is actually buying. Two policies with identical monthly benefits, elimination periods, and benefit periods can produce completely different outcomes on the same claim depending entirely on how disability is defined.
Own Occupation
A true own-occupation policy pays benefits when the insured cannot perform the substantial and material duties of their specific occupation or medical specialty, regardless of whether they work in any other capacity. A surgeon who develops essential hand tremor and can no longer operate receives full monthly benefits even if they continue to teach, consult, or practice in a non-surgical specialty. Income earned elsewhere does not reduce or offset the benefit.
Transitional Occupation
A transitional own-occupation policy pays benefits under the same circumstances but reduces them if income earned in another occupation or specialty exceeds pre-disability income. The benefit scales down proportionally with the new income. For a physician transitioning from clinical practice to administration or consulting, this distinction can mean the difference between a full claim payment and a substantially reduced one.
Reasonable Occupation
Benefits are paid only as long as the insured is unable to work in any occupation deemed reasonable based on their education, training, or experience. For a physician or dentist, this is the least protective definition available. A hand surgeon unable to operate might be considered capable of practicing general medicine or working in a clinical management role, eliminating the benefit entirely. This definition appears most frequently in group long-term disability plans, not individual policies.
Total Disability
Benefits are paid only when the insured is totally disabled and unable to work in any occupation. Most individual policies issued to physicians and high-income professionals do not apply this definition, but it is common in employer-sponsored group long-term disability coverage, where it typically operates alongside an own-occupation definition for the first 24 months of a claim before converting.
Policy Provisions
Non-Cancelable and Guaranteed Renewable
A non-cancelable, guaranteed-renewable policy is the most protective contractual structure available. Premiums are locked at the level set on the issue date and cannot be increased for the life of the policy. The carrier cannot modify the contract, add exclusions, or change terms after issue, even if the insured’s health status or occupation changes. Most individual policies from Ameritas, Guardian, MassMutual, Principal, and The Standard include this provision as part of the base contract. A guaranteed-renewable-only policy gives the carrier the right to increase premiums on an entire class of policyholders, which is a materially weaker protection, particularly over a 20- or 30-year policy life.
Monthly Benefit Amount
Individual disability benefits are non-taxable when premiums are paid with personal after-tax dollars, under IRC Section 104(a)(3). Employer-paid premiums produce taxable benefits at the time of claim. For physicians and executives with significant fixed-cost lifestyles, this distinction affects how much coverage is needed: a $15,000 tax-free monthly benefit and a $15,000 taxable monthly benefit are not equivalent. Most carriers will insure 60 to 70 percent of pre-tax income, coordinated across all individual and group disability coverage currently in force.
Income and Participation Limits
Carriers coordinate all disability coverage in force before issuing new policies. Eligibility and benefit amounts are determined by adjusted gross income and existing coverage. The combined benefit across all policies typically cannot exceed 60 to 70 percent of pre-tax income. Physicians and professionals who hold both a group plan and an individual policy must account for both when calculating their available benefit ceiling.
Elimination Period
The elimination period is the waiting period between the onset of disability and the first benefit payment. Common options are 30, 60, 90, 180, and 365 days. A 90-day elimination period is the most cost-effective choice on most individual policies and is the standard recommendation for professionals who maintain three to six months of liquid reserves. Shorter elimination periods increase premiums significantly; longer periods reduce premiums but require the insured to fund a larger income gap from savings before benefits begin.
Benefit Period
The benefit period determines how long monthly payments continue. Options include 2-year, 5-year, and 10-year periods, and benefits payable to age 65, to age 67, or for the insured’s lifetime. For physicians and high-income professionals in their 30s and 40s, a to-age-65 or to-age-67 benefit period is the standard recommendation: the income at risk over a full career is too large to cap at a shorter horizon.
Policy Riders
Partial Disability and Residual Benefits
The residual disability rider is one of the most consequential differentiators among carriers, and it is where the carrier-specific variation is greatest. Ameritas requires a minimum 15 percent income loss to trigger residual benefits, one of the lowest thresholds available. Guardian’s Enhanced Partial rider sets no explicit percentage floor: benefits scale proportionally with any income loss attributable to the disability. MassMutual’s Extended Partial Disability rider requires earnings to fall to between 20 and 80 percent of predisability earnings. The Standard’s Enhanced Residual rider uses a similar 20 percent threshold with a proportional formula. Principal’s residual rider scales pro-rata with income loss, also without an explicit minimum floor.
These differences determine whether a physician who reduces patient volume due to a qualifying condition receives any benefit at all. The residual benefit comparison table on this page shows how each carrier calculates these benefits using language from actual specimen policies.
Cost of Living Adjustment
A cost of living adjustment (COLA) rider increases monthly benefits annually during a claim to offset inflation. Most carriers tie the increase to the Consumer Price Index and begin applying it after the first full year of claim. For a 40-year-old professional who becomes disabled and remains on claim for 20 or more years, the compounding effect of annual increases is substantial.
Future Increase Option
A future increase option (FIO) rider allows the insured to purchase additional monthly benefit on future policy anniversaries without medical underwriting, subject only to financial eligibility. This is particularly valuable for residents and early-career professionals who purchase a policy at a lower income and expect significant earnings growth. Most carriers allow the insured to advance their increase option outside the regular anniversary window if a substantial income change occurs between scheduled increase dates.
Catastrophic Disability Rider
A catastrophic disability rider pays an additional monthly benefit when the insured cannot perform two or more activities of daily living or meets specified cognitive impairment criteria. This benefit supplements the base policy for the most severe disability scenarios and is separate from the base monthly benefit calculation.
Policy Exclusions and Limitations
Mental or Nervous Limitation
Some contracts limit benefits for mental health conditions, including depression, anxiety, and substance use disorders, to 24 months over the life of the policy. This limitation is contractually required for certain medical specialties, including anesthesiology and emergency medicine. Some carriers also require it for dentists. All policies issued in California are subject to this limitation regardless of specialty. When comparing policies across carriers, confirming whether a mental or nervous limitation applies is essential for physicians and professionals in high-stress specialties.
Pregnancy
Some contracts exclude pregnancy entirely; others cover complications of pregnancy. An applicant who is pregnant at the time of application will almost certainly have the current pregnancy excluded from coverage until after delivery.
Travel
Some policies exclude disabilities arising from travel to countries designated as high-risk. The specific countries and the definition of covered travel vary by carrier and should be confirmed at the time of application.
Pre-Existing Conditions
A medical condition that exists at the time of application may be excluded from coverage permanently or on a temporary basis. Common exclusions include conditions affecting the back, neck, and knees. Some exclusions are subject to review after a defined period without symptoms or treatment. Exclusions that appear permanent can in some cases be challenged through carrier advocacy. Jamie K. Fleischner has successfully negotiated the removal or modification of exclusions for clients through direct underwriter relationships developed over 30 years of practice.
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