How Much Will I get if My Disability Benefits are Approved?
Disability insurance policies normally pay a percentage of your salary, I say “normally.”
Most disability insurance policies begin the calculation of benefits based on what is called based monthly earnings or BME.
This is always an issue in physician disability policies; you may be paid on a bonus basis, partnership earnings, consulting income, the sale of property owned by partners or other salary arrangements.
I’ve been involved in litigation involving the sole question of how to calculate the base monthly earnings when a medical provider become disabled. You must know the answer to this question before you decide when to apply for disability and how your benefits are going to be calculated.
I’ve seen professionals think that certain earnings were included in their base monthly earnings only to find out after the fact those earnings were excluded. What a financial disaster!
It’s important to know whether you increased you disability coverage over time or whether your disability insurance company will allow you to increase your disability coverage while you are disabled.
You should also know whether there is a cost of living adjustment that will increase the number of your disability benefits the longer you are disabled. Of course, the most important questions “What’s the Maximum Disability Benefits” I purchase? This depends on whether your disability benefits can be reduced by other benefits paid to you such as Social Security Disability benefits, pension benefits, payments from your 401k, or even buyouts of your practice.
For example, you may have a disability policy that pays $10,000 in benefits per month. You are eligible for Social Security Disability benefits of $2,000 per month and your being bought out over time for your practice being paid $5,000 a month. Your policy may provide that the entire $7,000 is deducted from your disability benefits.
You better know this before you stop practicing and apply for disability benefits. Give us a call today to discuss your claim for benefits. Free consultation for all.