We partnered with the Chief Claims Officer at one of the largest disability insurance providers to discuss the most common causes of claims for physicians and breakdown scenarios to better help you understand the risks and claims process.

Perception of a Disability vs. Reality

Many of the physicians with whom I speak have a pre-conceived view of disability insurance as someone who has been injured in an accident. However, due to decades of data we know that illnesses account for 90% of all disabilities according to the Council of Disability Awareness.

Many readers are here because they know there is a risk of suffering a disability, but before we dive into the particular causes, I believe it is always important to set the table about the likelihood of this risk during our working years.

Odds are simply that, odds, not guarantees. You may not know any physicians who have suffered a disability, which can make the odds example more difficult to grasp. A good example would be if you flip a quarter six times, you might get six heads. But flip it 5,000 times and you’ll approach 2,500 heads and 2,500 tails. Insurance works based on the principle of the law of large numbers. The stats below are not to scare you into buying insurance, but rather to reflect the odds across the entire population.

1 out of 338: Odds of a home fire per year ¹

1 out of 63: Odds per year of a medical malpractice claim leading to a payment ²

1 out of 102: Odds in your lifetime of dying in a car accident ³

1 out of 14: Odds of being a victim of Identity Theft ⁴

1 out of 5: Odds of being involved in a serious car crash ⁵

1 out of 4: Odds of a 20 year old becoming disabled before age 67 ⁶

From the chart above, let’s delve a little deeper into the top 5 most common causes of disability:

1. Diseases of the Musculoskeletal System and Connective Tissue (aka Muscle, Back and Joint Disorders | 28.7%):

• Examples: Arthritis, Herniated or Degenerative Disc, Back Pain, Spine/Joint Disorders, Cartilage Sprains, Tendinitis, Fibromyitis, Osteoporosis, Rheumatism, Scoliosis, Sciatica
• Claim Scenario: Dr. B is a 46-year-old male orthopedic surgeon claiming total disability due to degenerative disc disease of the L4-L5 spine. He is unable to stand and perform surgeries but continues to perform some limited office work seeing patients approximately 10 hours per week. He continues to attend physical therapy and has received spinal injections for pain relief. In this example the insured, Dr. B, qualified under the extended partial disability benefits rider because he is still working and based on his loss of earned income he received 100% of his monthly benefit.

2. Diseases of the Nervous System and Sense Organs (aka Spine and Nervous System Related Disorders | 15.2%):

• Examples: Multiple Sclerosis, Epilepsy, Paralysis, Alzheimer’s, Parkinson’s Disease, Amyotrophic Lateral Sclerosis (ALS), Bell’s Palsy, Guillain-Barré Syndrome, Eye Disorders including Diabetic Retinopathy and Macular Degeneration, Ear Disorders including Balance Related Disorders like Ménière’s Disease
• Claim scenario: Dr. M is a 55-year-old Neurosurgeon who became disabled due to advanced macular degeneration, which left him legally blind. The claim was approved and total disability benefits were provided after the satisfaction of the 90-day waiting period. While the insured has not returned to work in any capacity, if he did decide to trying working in some capacity or even in another occupation, full disability benefits still would be paid in accordance with the presumptive provision in the policy.

3. Diseases of the Circulatory System (aka Cardiovascular and Circulatory Diseases):

• Examples: Hypertension, Heart Disease, Heart Attack, Stroke, Aneurysm, Coronary Artery Disease, Phlebitis
• Claim Scenario: Dr. A is a 51-year-old male pediatrician who suffers from Coronary Artery Disease, exertional angina and Type II diabetes. Prior to disability Dr. A worked approximately 50 hrs per week. After undergoing an angiogram and stent placement, Dr. A continued to have chest pain with exertion. His physician advised him to reduce his work schedule to 30 hrs per week. Dr. A is currently receiving partial disability benefits based on his loss of earned income.

4. Cancer and Neoplasms (aka Cancer and Tumors):

• Examples: Breast Cancer, Prostate Cancer, Lymphoma, Hodgkin’s Disease, Leukemia, Tumors
• Claim scenario: Dr. C is a 42-year-old OB/GYN who developed stage IV breast cancer requiring bilateral mastectomy and chemotherapy. She was unable to practice for one-year post diagnosis while she underwent treatment. Benefits were provided until Dr. C advised that she was doing better and able to return to work full time.

5. Mental Disorders (aka Mental Illness and Behavioral Disorders):

• Examples: Depression, Schizophrenia, Drug/Alcohol/Substance Abuse, Bipolar Disorder, Anxiety, Obsessive Compulsive Disorder
• Claim scenario: Dr. B is a 51-year-old family practitioner with a thriving office practice. She developed severe depression and anxiety subsequent to the death of her son due to heroin overdose. She was under the care of a psychiatrist and a psychologist. Despite medication management and weekly therapy, she was not able to recover mentally to return to work and subsequently closed her practice. Benefits were provided for 24 months based on the mental nervous limitation contained in the policy. Subsequent to the 24 months of payments, the policy remains on waiver of premium until either the insured may recover and return to work, suffer a different medical condition that would allow for disability benefits, or the expiration date of the policy.

Your income pays for everything – bills such as mortgages, student loans, utilities as well as your savings, kid’s education and your retirement. Even the soundest financial plan will fall apart if the income stops and you’re not financially independent. Since your greatest asset is your ability to earn a paycheck and your greatest risk, statistically, is suffering a disability, it is important to do what you can to protect it.

1 National Fire Protection Association, Fast Facts About Fire 2010-2014

2 New England Journal of Medicine, August 18, 2011; 365:629-636 DOI: 10.1056/NEJMsa1012370

3 National Safety Council odds of dying, 2015

4 U.S. Department of Justice. Victims of Identity Theft, 2014.

5 AAA Foundation for Traffic Safety. 2015 Traffic Safety Culture Index.

6 Social Security Administration, Fact Sheet September, 2017.