Principal

AM RATING: A+

PROVIDER: Principal Life Insurance Company

DEFINITION OF DISABILITY: Own-Occupation Definition

RESIDUAL BENEFIT: Requires 20% loss of income

FUTURE INSURABILITY RIDER: Available every 3 years.

Principal is a great option for medical professionals who are looking to secure their income with disability insurance. Principals HH750 policy is a true own occupation policy that is fully comprehensive and protective of physicians in the case of an illness or injury that may result in a disability or loss of career. Principal is one of the Big Six Insurance companies, meaning they are one of the only insurance companies to provide TRUE OWN OCCUPATION disability insurance.

Principals definition of totally disabled is as follows:

“You must be unable to perform the substantial and material duties of your occupation and you are not working.” 

The regular occupation rider is what secures Principal’s definition of disabled to be 100% true own-occupation coverage. This rider clarifies that you are totally disabled if you are unable to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation, as long as you are not able to work in your occupation. 

Principal will deem your specialty to be your occupation if your occupation is limited to the performance of the material and substantial duties of a single medical specialty or single dental specialty. 

A policy from Principal is non-cancelable and includes guaranteed premium rates to age 65. This means Principal can not cancel or raise your premiums as long as you are paying your premium before you reach age 65, regardless of income, health, or occupation changes. 

Once you reach age 65 you have the option to renew your policy annually as long as you are currently working at least 30 hours in a week and had been the year before, a few additional requirements may apply. If you renew the policy, your renewal premium will change each year based on your age.

POLICY TIME PERIODS

The Elimination Period is the number of days following the disability before benefits become payable and the benefit period is the maximum time for which you can receive benefit payments for disability, are also important to notice for each company. 

Below are Principals definitions of each: 

Elimination Period: The policy has the following elimination periods as options:

  • 30-day.

  • 60-day.

  • 90-day.

  • 180-day.

  • 365-day.

Benefit Period: To Age 65 - This is the longest period of time for which Principal will pay benefits for a continuous disability.

WHAT IS INCLUDED IN YOUR PRINCIPAL POLICY

With a Policy from Principal, you have the option to add additional features and benefits to make your policy completely customizable to you. However, a policy through Principal comes with two additional features automatically, these are as follows: 

Rehabilitation Benefit 

If you are disabled and want to pursue a rehabilitation program to return to work, an extra benefit may be available to help you with the cost. The program will be mutually agreed upon in writing by you and Principal. 

Waiver of Premium Benefit 

You do not have to pay for your coverage after you’re disabled for 90 days. We’ll refund the premiums you paid for coverage after the disability began and continue to waive all premiums that become due during your continuous disability.

ADDITIONAL BENEFIT PAYMENT FEATURES

Principal also provides 5 additional features that you can add to your policy to add additional payments. The following are options to add on to your policy: 

Death Benefit 

You receive a lump-sum benefit of $15,000 if you die after satisfying the elimination period while receiving disability benefits. This benefit is payable in addition to any other benefit of the policy. 

Capital Sum Benefit rider

You receive a one-time lump-sum benefit of $60,000 to help you adjust financially if you have a total loss of use without any possibility of recovery, of the sight in one eye, or the use of a hand or foot. This benefit is payable in addition to any other benefit of the policy you qualify to receive.

Catastrophic Disability Benefit rider

Provides you a monthly benefit of $5,000 in addition to your monthly disability benefit (and Social Insurance Substitute Benefit if on the policy) in the event you become catastrophically disabled solely due to an injury or sickness and you lose the ability to perform two or more activities of daily living (ADL) without assistance or become cognitively impaired, or become presumptively disabled. 

Benefits could be paid if you are: 

• ADL disabled: unable to perform two or more ADL’s without assistance (bathing, continence, dressing, eating/feeding, toileting, transferring); or 

• Cognitively impaired: measurable impairment to short-term/long-term memory; orientation to people, places, time; deductive/abstract reasoning that severely impairs the ability to function independently; or 

• Presumptively disabled: total loss of use for any and every purpose or activity without any possibility of recovery of power of speech; hearing in both ears; sight in both eyes; or use of both hands, both feet or one hand and one foot 

Supplemental Health Benefit rider

You receive a once-in-a-lifetime lump sum benefit of $30,000 if you were to become disabled under the policy and are diagnosed with coronary artery bypass graft surgery, cancer, or stroke. These are defined as: 

  • Coronary artery bypass graft surgery – An operative procedure for the correction of two or more blocked arteries of the heart. This does not include angioplasty and/or any other intra-arterial procedures. 

  • Cancer - The presence of a malignant tumor characterized by the uncontrolled growth and metastasis of malignant cells, and the invasion of tissue. Includes: Leukemia and malignant diseases of the lymphatic system, such as Hodgkin's lymphoma Stage III and IV and invasive malignant melanoma. 

A clinical diagnosis which would include, but not be limited to x-ray, MRI, and CT Scan, will be acceptable in the event a positive diagnosis cannot be made without jeopardizing your life. The following diagnoses are not covered; any non-invasive cancer in-situ, Hodgkin's disease Stage I, prostate cancer Stage A, papillary cancer of the bladder, all skin cancers except invasive malignant melanoma (starting with Clark Level III). 

  • Stroke - And cerebrovascular incident producing neurological deficit lasting more than 24 hours and including infarction of brain tissue or hemorrhage into brain tissue. Evidence of neurological deficit for at least 90 days must be produced. 

Presumptive Disability Benefit rider 

You receive $5,000 a month if you permanently lose the power of speech, hearing in both ears, sight in both eyes, or use of both hands, both feet, or one hand and one foot. Benefits start to accrue when the presumptive disability occurs and continue to be paid, as long as the loss continues regardless of your ability to work or earn an income. Benefits will be payable to the end of the benefit period for as long as the loss continues. If the benefit period is to age 65 or greater, the benefit is extended for a lifetime.

FEATURES THAT ENHANCE THE DEFINITION OF DISABILITY

Residual Disability and Recovery Benefit rider 

Lose at least 20% of your prior earnings due solely to an injury or sickness and You are considered residually disabled and receive a benefit proportionate to your loss if you: 

• Are able to perform some, but not all, of the substantial and material duties or 

• Are unable to work full time in your occupation or Working in another occupation. Once you qualify for residual disability benefits, you are guaranteed a minimum benefit of 50% of your maximum monthly benefit for the first 6 months. 

If your loss of earnings exceeds 75%, then 100% of the maximum benefit is paid. 

Also, after recovering from a disability in which you were receiving benefits, and you return to work full-time, recovery benefits are payable as long as you continue: 

• To have a recovery loss of earnings equal to or greater than 20% of your recovery prior earnings and 

• The loss is directly and solely due to the injury or sickness that caused your prior disability. 

Recovery benefits end when you no longer have a recovery loss of earnings greater than 20% for two consecutive months and will not be paid beyond the maximum benefit period. 

Regular Occupation rider 

If you become totally disabled from your regular occupation and choose to work in another occupation, you receive full benefits, regardless of the income you earn from the other occupation.

FEATURES THAT ENHANCE YOUR MONTHLY BENEFIT

Benefit Update rider

Your coverage can be reviewed every three years to ensure it is consistent with any changes to your income. You can increase your coverage, up to the maximum amount for which you are eligible, every three years based on financial information without providing evidence of medical insurability. You can even request an advanced update, in place of your next scheduled review, if you: 

  • Have at least a 20% increase in sustainable earnings since the later of the policy issue date or last adjustment to increase your total disability benefits.

  • Lose your group long-term disability (LTD) coverage because of a change in employment, or your employer discontinues or reduces the group LTD benefit amount.

Cost of Living Adjustment (COLA) rider 

While you’re disabled and receiving monthly benefits, this rider increases your benefit to keep up with inflation. Your benefits increase is calculated on a compounded basis as determined by the change in the Consumer Price Index for All Urban Consumers (CPI-U) each year up to a maximum increase of 3%. 

If the change in the CPI-U index is zero or negative, your monthly benefit will remain the same. 

Benefit Update rider 

Your coverage will automatically increase every year for six years to help keep up with inflation without submitting evidence of insurability. You are guaranteed a minimum increase of 4% compounded and a maximum of 10% compounded. This amount is based on the change in the Consumer Price Index for All Urban Consumers (CPI-U). 

You may also request an additional increase, up to $500 maximum, based on your income. This rider can be renewed at the end of six years with financial underwriting. 

*If you have the Benefit Update rider on your policy, a Future Benefit Increase offer will not be made in years of Benefit Update options.  

COMPANY POLICY UNIQUE FEATURES

Capital Sum Benefit rider: You receive a one-time lump-sum benefit of $60,000 to help you adjust financially if you have a total loss of use without any possibility of recovery, of the sight in one eye, or the use of a hand or foot. This benefit is payable in addition to any other benefit of the policy you qualify to receive.

Supplemental Health Benefit rider: You receive a once-in-a-lifetime lump sum benefit of $30,000 if you were to become disabled under the policy and are diagnosed with coronary artery bypass graft surgery, cancer, or stroke.

Secure Training Discount: It is no secret that the largest available discount for physicians when it comes to disability insurance is training discounts. 

Training discounts are huge because they can range anywhere from 10-40% of the premium and they will last the life of your policy.

With Principal, you can keep these discounted prices for the lifetime of your policy. This can end up saving you a large amount over the lifetime of the policy, which is why it is so important to take advantage of those discounts when you are in training!

When considering which company is best for you and your unique needs, Principal is always a good option. With Principal you have many options to completely customize your policy to fit you, the coverage amounts and definition of “disabled” make Principal an excellent choice for your disability insurance policy.

If you are interested in learning more about Disability Insurance, read more on our 2021 Beginners Guide to Disability Insurance.