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Disability Insurance > Articles > Disability Insurance Company Information > Guardian’s Disability Insurance Product - ProVider Plus™

Guardian’s Disability Insurance Product - ProVider Plus™

by Gary Fegan

Your biggest asset is your ability to earn a living- If your income stopped due to a disability, would you survive financially? Almost everyone can not- So you need to insure against a disability crippling you financially. You want to obtain the best coverage at the best price from the best carrier!

The purpose of this article is to introduce you to one of the best disability policy available to meet your income protection needs- ProVider Plus.1 Let’s start with the important basics of the policy:

  • Definition of Total Disability - ProVider Plus offers the best protection with the option of a true own-occupation definition of total disability, which makes it possible for you to work in another occupation and still be eligible for total disability benefits when, solely due to injury or sickness, you are unable to perform the material and substantial duties of your occupation. If you are a physician or a dentist who has limited your occupation to the performance of the material and substantial duties of a single medical or dental specialty, Berkshire Life will deem that specialty to be your occupation. Very few carriers offer a true own-occupation definition, much less offer specialty language to further define your occupation.

  • Non-Cancellable & Guaranteed Renewable - ProVider Plus offers one of the strongest premium and coverage guarantees available because it is both Non-Cancellable and Guaranteed Renewable to age 65 or 67. This assures you that the premium rates and policy provisions will not be changed as long as the premiums are paid on a timely. Furthermore, the policy is portable, which means that you can take the policy with you, even if you change employers.

  • Residual Disability Benefit Rider2 - This rider provides a benefit when, solely due to sickness or injury, you suffer a loss of 15% or more of your income. Most other companies pay only when your loss of income is 20% or more, and may require a loss of time or duties. If you become residually disabled while your policy is in force, your lost income will be replaced dollar for dollar, up to the policy’s monthly benefit3, for the first 12 months that residual benefits are payable. After which, the benefits are proportionate to your loss of income and are payable for up to the policy benefit period. If the loss of income is 75% or greater, it would be considered 100%. Please see the illustration below that further explains why ProVider Plus is a great choice:

  • Residual benefits graph

  • Recovery Provision - This provision, which is built into the Residual Disability Benefit Rider, considers you residually disabled even after you fully recovered and returned to work full-time, as long as you continue to suffer a loss of income of at least 15% of your prior income solely due to your sickness or injury. You will continue to be eligible for this benefit under the conditions stated above for the full duration of the benefit period. Many other companies may only pay for a limited time, which may or may not properly support your financial recovery.

  • Waiver of Elimination Period - If you suffer a disability that lasts more than six months and you receive benefits from the policy, with this policy feature the elimination period is waived for any subsequent disability that occurs within five years - regardless of the cause!

  • Waiver of Premium Benefit - With this built-in policy feature, once you have satisfied the elimination period, premiums are waived during a period of disability and continue for six months after your claim ends.

  • Cost of Living Adjustment Rider (COLA)2,4 - During a disability, fixed dollar benefits cannot keep pace with inflation. That is why the COLA rider is very important. This rider helps you keep pace with inflation during a disability- whether you are totally or residually disabled. ProVider Plus offers three COLA rider options. The first option is the 3% Compound COLA Rider which will increase your monthly benefit 3% compounded each year after you have been disabled for 12 months. The second option is the 6% Maximum COLA rider. This rider will adjust your monthly benefit each year according to changes in the Consumer Price Index after you’ve been disabled for 12 months. The compounded increases will be no lower than 3% compounded and no greater than 6%. The third option is the Four-Year Delayed COLA Rider option. This rider will increase the monthly benefit each year by 3% compounded. The increases will begin on the fourth anniversary of the date you originally became disabled. In the event that you recover and return to work, you would automatically retain the increases until age 65 or 67 at no additional cost to you! See this illustration below:
    Cumulative benefits graph

    $10,000 monthly benefit
    90-day elimination period
    To Age 65 benefit period
    Totally disabled from age 45 to 65

  • Future Increase Option Rider (FIO)2,5 - Provider Plus’ FIO rider offers you the opportunity to purchase additional coverage in the future each year on the policy’s anniversary up to and including age 55, with no medical insurability requirement. This is a great way to ensure that your policy has the opportunity to keep up with y our future earnings increases regardless of any changes in your health. The FIO rider includes special option dates that allow off-anniversary increases for events such as the loss of group long term disability coverage. You may exercise your increase option on the option date even if you are disabled and on claim. Your additional coverage would then apply to any new and separate disability.

  • Presumptive Total Disability Benefit - ProVider Plus Presumptive Total Disability Benefit is a built-in policy feature that is designed to provide extra financial protection for certain severe disabilities. Even if you are able to perform some or all of your regular job responsibilities, and even if you are expected to recover, you would be considered totally disabled and entitled to receive full benefits if sickness or injury results in the total and complete loss of sight in both eyes, hearing in both ears, speech, or the entire use of both hands, both feet, or one hand and one foot in their entirety.

  • Retirement Protection Plus (RPP) Disability Benefit Rider2,6 - This rider is designed to help you maintain a healthy retirement strategy by replacing contributions made to a defined contribution plan when you are totally disabled and not gainfully employed. Once you are eligible for benefits, a monthly benefit insuring up to 100% of your retirement contributions, including any employer-matching contributions, will be paid into a trust established by you. Please see the illustration below to further explain: Retirement assets graph

  • Unemployment Waiver of Premium Rider2 - This rider helps you to maintain your coverage during a period of unemployment. This feature waives premium payments for 12 months if you become unemployed and receive unemployment compensation for at least 60 consecutive days- regardless of whether you return to work or not. Furthermore, the coverage continues to protect you during this twelve month period.

  • Automatic Benefit Enhancement Rider - ProVider Plus also offers a no-cost rider that helps you to keep your disability benefit aligned with normal, annual income increases you may experience when healthy. It is applied automatically to eligible policies and provides an annual 4% benefit increase each year for six years, with no proof of income. Each increase will include an additional premium based on your then-current age. Rider eligibility will be determined at the time of underwriting.

  • Catastrophic Disability Benefit Rider2 - ProVider Plus offers a rider that may provide for an extra benefit in the event of one of the following: - Cognitive impairment that requires substantial supervision, - The loss of two or more of the following Activities of Daily Living (ADL)- bathing, continence, dressing, eating/feeding, toileting and transferring. – Total, complete and irrevocable loss of sight in both eyes, hearing in both ears, speech, or the entire use of both hands, both feet or one hand and one foot. The benefit includes an annual compounded 3% increase adjustment. When combined with the base policy benefit and other disability coverage, the Catastrophic Disability Benefit Rider may provide up to 100% income replacement.

  • Capital Sum Benefit - ProVider Plus offers this built-in benefit and it is paid in addition to any other benefits payable if, because of sickness or injury, you lose the entire sight in one eye with no possibility of recovery or suffer the complete loss of one hand or foot severed through or above the wrist or ankle and you survive it for 30 days. The benefit is equal to 12 times your monthly benefit. No more than two Capital Sum Benefits are payable during your lifetime.

As important as the features of the actual policy are, the strength of the company that offers the coverage is equally important. A disability policy is a promise to pay a benefit when you need it most- and a promise is only as good as the company that can honor it. A disability policy is expected to be there for you many years into the future. Therefore, the disability carrier you decide to go with is of vital importance. As you will see, it is very important to obtain your policy from Guardian Life Insurance Company of America, whose individual disability insurance policies are underwritten through Berkshire Life Insurance Company of America. Please see ratings below:

Rating Rankings as of April 15, 2015:*
Northwestern MutualA++AA+AaaAAA100
Berkshire LifeA++AA+N/AAA+99
Mass MutualA++AA+Aa2AA+98
Met LifeA+AA-Aa3AA-94
Principal LifeA+A+A1AA-90
Standard InsuranceAN/AN/AA78
Unum LifeAAA2A77
Please consult with your financial advisor to review this information. Experts who write about the insurance industry will tell you that a Comdex score of 95 or higher is considered an "extremely safe" company, and a 90 represents a "safe" company and a ranking of 85 indicates a "reasonably safe" company. *Source- April Vital Signs 2015 Ratings are subject to change.

If you are going to obtain disability insurance, you need to consider Guardian and Berkshire Life. Also, Berkshire Life paid more than $223.3 million in disability income benefits in 2010 alone. You want a company that will be there for you when you need it most- Choose Guardian and Berkshire Life.

Understand the need for coverage:

You insure your expensive tangible assets- things such as your car, home, etc. What is your biggest asset? The answer is your income stream! Have you insured your current and future income against a disability? How would you pay your bills if your income stopped? As an example, if you were 35 and earning $100,000 and your income stopped permanently (maybe due to a disability) you would lose the income opportunity of $3,000,000 between age 35 to age 65, and this assumes no increase in pay for 30 years! If you had an asset in your house worth $3,000,000 or more, would you want to insure it?

The risk of becoming disabled is very real and could happen to you. Just take a look at the statistics:

  • A 20-year old worker has a 3-in-10 chance of becoming disabled before reaching retirement age. (www.socialsecurity.gov/dibplan)

  • A disabling injury occurs every three seconds in a public setting and every four seconds in the home. (National Safety Council, “Injury Facts,” 2007 Edition)

Now that you realize that you need to protect your income, you need to make sure that you have the most comprehensive coverage from a strong carrier. The carrier needs to be financially stable, and it would be great if they have been providing disability protection for a long time. Provider Plus offers one of the best solutions to cover this need.

1. Berkshire Life Insurance Company of America, Pittsfield, MA, underwrites and issues the disability insurance policy forms 1400, 1500 or 1600. Berkshire is a wholly owned stock subsidiary of The Guardian Life Insurance Company of America which is located in New York, NY. Policy forms 1400, 1500, or 1600 provide disability income insurance only. They do not offer major medical insurance, basic medical or basic hospital insurance as set forth by the New York State Insurance Dept. These policy forms have an expected benefit ratio of 50%. In New York only, policy forms 1400-F, 1500-F or 1600-F have an expected benefit ratio of 60%. Expected benefit ratio is the amount of future premiums the company predicts will be returned as benefits to the consumer when averaged over all the people who own this policy form. The availability of this policy series, optional riders and provisions, as well as features, may vary from state to state.
2. If you choose to have an optional rider on your policy your premium will increase.
3. The Loss of Income Indemnity payable under the Residual Disability Benefit Rider will be reduced by benefits payable under disability insurance policies that were in force before this rider is issued should the sum of all disability benefits exceed actual lost income.
4. This optional rider does not necessarily protect against an increase in the cost of living.
5. Restrictions and limitations apply. While medical information is not required when exercising a future increase option, applications to exercise an increase option will be financially underwritten, taking into consideration both the applicant’s then current income, as well as all disability insurance which is then in force, for which the insured has applied or is eligible to receive.
6. Retirement Protection Plus is not a pension plan or a substitute for one.

James Fegan holds a Financial Representative contract with The Guardian Life Insurance Company of America based out of New York, NY.

2015-2581 Exp 05/2017

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Berkshire Life Insurance Company of America
Reviewing a Company's Financial Strength, The Comdex Ranking.
How to Choose a Disability Insurance Company
What To Expect During Disability Insurance Underwriting