Income Protection (Disability) Plan Details

Your earning power is the key to your family's financial well-being.

Financial planners recommend income protection insurance, sometimes called disability insurance, as a key element in your overall asset protection program. Your earning power is probably the most important resource your family has that can be protected simply and inexpensively.

Who would your family turn to if you weren't able to work due to an illness, injury or sickness? Where would the money come from to pay the mortgage, taxes, car loans, college tuition, and other expenses? Federal Housing Administration statistics show that 46% of all mortgage foreclosures are due to a disability.

What are the chances of being disabled?

Much greater than you ever imagined! According to the American Society of Actuaries, it's greater than the risk of death between ages 25 and 65 at every age. Chances are one in two that a 30 year old will be disabled for more than three months before age 65. It's not a risk you should ignore especially when The Trust's Income Protection plans can provide the replacement income and peace of mind you need at affordable group rates!

Why Trust Income Protection insurance?

The plan is designed by psychologists for psychologists who really understand the commitment it takes to have a career in psychology and the duties associated with the practice of your profession. All plans may be continued for as long as you work at least 20 hours per week on a regular basis regardless of age. Benefits are payable if you can't perform the duties of "your occupation."

What about social security disability income?

There are disability benefits available from social security, but only under limited circumstances. The Social Security Administration defines disability as the inability to engage in ANY substantial work activity (currently defined as a dollar amount currently set by law at no more than $500 a month) due to a medically determinable physical or mental impairment expected to last for at least 12 months or result in death.

Trust Income Protection plans are flexible and responsive!

• Monthly benefits of up to $10,000.
• Choice of benefit payment periods (5-year plan or to age 65).
• Choice of benefit waiting periods - 28, 90 and 180 days.
• Residual benefits to ease your return to work.
• Guaranteed Insurability Option (GIO)* guarantees that you can purchase additional monthly income protection as your earnings increase without medical evidence of insurability.
• Benefit Booster** prevents cost of living increases from eroding the purchasing power of your protection.

* Each May 1, you may purchase up to 10% of the initial benefit selected provided you are actively at work and have not been hospitalized in the 6 months prior to May 1. The maximum amount of increase is limited to the maximum benefit of the program.
** The maximum accumulated benefit under this option will be 200% of the monthly benefit you have selected.

How much Income Protection do I really need?

We recommend that an individual apply for enough Income Protection insurance to replace 60% of their annual gross earnings. This level of coverage usually provides enough income to cover the basic needs of the family such as income for mortgage payments or rent, insurance premiums, food, clothing, automobile operation and maintenance, installment payments, utilities, real estate and other taxes, and children's school expenses. It's important to remember that if you pay the premiums personally with after tax dollars, the benefits from Income Protection policies are federal income tax-free. A plan which provides 60% of gross taxable pay really replaces 85-90% of net spendable income depending upon your tax situation. The maximum total benefit for which you may apply may not exceed 60% of your gross earnings.

How long do I wait before the plan benefits begin?

You can choose a benefit waiting period to suit your individual needs. Generally, the longer you can wait for benefits to begin after becoming disabled, the lower the cost of the plan. A waiting period ought to be viewed like a deductible on other insurance you own. Try to dovetail the beginning of your benefit payments to coincide with the time when any salary continuation plan runs out. Benefit waiting periods of 28, 90 and 180 days are available for LifeStyle-5 and LifeStyle-65 plans.

Plan features offer comprehensive protection!

Benefit Booster is designed to increase the benefit being received once each year on the date disability payments began by a maximum of 3%, or the annual percentage increase in the Consumer Price Index, whichever is less. You may add this feature to help offset the ravages of inflation on the purchasing power of your benefit.

Guaranteed Insurability Option (GIO) is automatically included in all new plans and allows the purchase of additional Income Protection Insurance each year without medical evidence of insurability. As your income grows, your needs change and your Trust Income Protection insurance can be increased regardless of your medical condition. Increases equal to 10% of your existing coverage may be purchased by opting to increase the protection each May 1. To qualify you must be actively at work, not have been hospitalized in the prior 6 months, and provide income verification if required.

What are my choices?

Trust Income Protection insurance is designed to replace lost earnings in the event of total disability resulting from injury, accident or sickness. Subject to certain limits discussed in the brochure and the certificate, this insurance will pay you a benefit if you are prevented from performing the duties of your occupation. It's important to remember that the Trustees, comprised of insurance professionals who are experts in the field, and psychologists who are actively engaged in your profession, actually designed these plans.

LifeStyle-5 Plan

The LifeStyle-5 Plan provides disability benefits for a period of up to five years or age 62, whichever comes first, for disabilities beginning before age 60. For disabilities beginning between ages 60-65, benefits continue for two years or to age 65, whichever comes first. For disabilities beginning after age 65, benefits will be paid for one year.

LifeStyle-65 Plan

The LifeStyle-65 Plan provides disability benefits that can span your entire working career. For disabilities which begin prior to age 60, benefits are paid until age 65. For disabilities beginning between the ages of 60-65, benefits are paid for two years or to age 65 whichever comes first. For disabilities beginning after age 65, benefits will be paid for one year.

LifeStyle-65 Plus Plan

LifeStyle-65 Plus Plan offers you the opportunity to replace as much as 67% of your taxable income rather than a 60% replacement. The higher replacement ratio provides funds that will allow a continuation of contributions to your retirement/savings plan.

It's important to remember that even a long term disability may not affect your longevity, and that a continuation of retirement plan funding may be critical for you and your spouse. This plan enables you to replace your current income and continue to set funds aside for your future retirement. When submitting an application, you will be required to include proof that you are contributing to a retirement/savings plan on a regular basis.

Economizer-65 Plan

The Economizer-65 Plan maximizes your insurance premium dollar by providing a cost contained plan of disability income insurance. The duration of disability benefits is the same as the LifeStyle-65 Plan.

Disability benefits under this plan can span your entire working career. For disabilities which begin prior to age 60, benefits are paid until age 65. For disabilities beginning between the ages of 60–65, benefits are paid for two years or to age 65, whichever comes first. For disabilities beginning after age 65, benefits will be paid for one year. The difference between the Economizer-65 Plan and other Trust endorsed plans of Income Protection (Disability) insurance is that the definition of disability becomes more restrictive after the first two years of benefit payments under this plan.

1. For the first 27 months, you are considered totally disabled if you are completely unable, due to sickness or bodily injury, to perform the duties of your normal occupation and are not performing any other occupation.
2. After the first 27 months, you would be considered totally disabled and benefit eligible if you are unable due to sickness or bodily injury to perform any occupation for which you are reasonably suited by education, training or experience.

Other Trust Income Protection (Disability) plans incorporate a more liberal definition of disability commonly referred to as a “your own occupation” definition for the entire episode of disability (definition A above).

This Economizer-65 Plan is offered with a 90 day waiting period, without Benefit Booster and Guaranteed Insurability options. It is about 25% less costly than our LifeStyle-65 Plan that offers these two features together with a more liberal definition of disability as described above.

This Income Protection (Disability) policy is designed for those applicants, and their spouses, who have limited budgets and wish to implement a basic level of income protection insurance.

LifeStyle 5 or 65 Plan?

The table below, which shows the likelihood of a continuing disability for an individual who has been disabled for 90 days, should be helpful as you consider both plans.

Obviously, a plan providing benefits to age 65 costs more than a plan which provides benefits limited to 5 years.

Source: Insurance Commissioner's Disability Tables

Residual Benefits

Such coverage encourages a person receiving benefits to gradually return to work without losing disability benefits. If, immediately following a period of total disability which has lasted 6 months or longer, you return to work but your earnings are less than 75% of pre-disability average earnings, the plan will pay an amount equal to the percentage of your lost earnings applied to the disability benefit for the next 12 months. For instance, if you were receiving a $5,000 monthly benefit and your post disability income derived from employment is 75% of your income prior to disability, the plan will pay $1,250 a month for the next 12 months (25% of $5,000).

Survivor Benefits

All Trust Income Protection plans now include a three month survivor option. If you should die while receiving total disability benefits, the plan will pay your survivors a sum equal to 3 monthly benefits. The benefit will be paid to your surviving spouse and children, or your brothers and sisters, otherwise to the executor or administrator of your estate.

Rehabilitation Assistance

Liberty Mutual is a leader in providing rehabilitation resources to disabled insureds to help them get back to work. Liberty Rehabilitation Specialists review case histories to select those individuals who they feel would benefit from rehabilitation efforts. These resources are free of charge and participation is voluntary. Participation in these programs will not cause disability benefits to terminate.

Successive Periods of Disability Provision

This provision recognizes that if an insured suffers a period of successive disability, from the same or related cause, benefit payments will begin again immediately without the imposition of a new benefit waiting period. Successive periods of disability due to the same or related causes will be considered one period of disability unless they are separated by the insureds return to active work on a full time basis for at least 6 months or coverage terminates.

Waiver of Premium

In the event of total disability for six consecutive months, premiums due are waived until the next quarterly payment date which follows cessation of disability benefits.

Cost Effective Group Rates

A 40-year old practitioner can replace $5,000 of monthly earnings for just $616 a year! Unlike other Income Protection plans, rates are the same for women and men.

Plan Provisions, Exclusions and Limitations

• Benefits are payable only for periods of disability for which you are under the care of a fully licensed physician and cannot perform the duties of your occupation or profession.
• Benefits will not be paid for disability caused by pre-existing conditions which existed prior to being insured by this insurance for which treatment, including medication or prescriptions, was rendered or charges were incurred within six months before the effective date of insurance. However, pre-existing conditions are covered after six months (one year for mental illness or emotional disorder) has elapsed where no treatment has been rendered or charges incurred for such illness (this includes medication or prescriptions).
• The maximum length of time for which benefits are payable for any one period of disability varies according to age at the time disability begins and the plan you select.
• Benefits for a disability resulting from alcohol, drug abuse, or mental illness will not be paid for more than 24 months. Benefits will be paid for disabilities resulting from these conditions only if you enter and remain active in a program of rehabilitation designed to cure or minimize the condition.

Benefits will not be paid for disabilities due to:

• War or act of war (declared or undeclared);
• Pregnancy, unless the disability is due to complicated pregnancy;
• Intentionally self-inflicted injuries while sane or insane;
• Drugs that are voluntarily taken, ingested or injected, unless prescribed or administered by a physician;
• Active participation in a riot or committing or attempting to commit an indictable offense.

For LifeStyle-65 and Economizer Plans

If you are totally disabled, you will receive benefit subject to the waiting period selected, social security disability benefits; and disability receive under any state or federal law (but individual insurance you may also own) so disability income benefits do not exceed 70% prior to receiving disability payments.

Termination of Coverage

Your Income Protection insurance will terminate on the earliest of the following dates:

• The date the master policy held by the Trustees is terminated;
• The date you fail to make any agreed payment of premium within the 31 day grace period;
• The date you cease to be gainfully employed on a regular basis of at least 20 hours per week;
• The date you become a member of the armed services of any country.

About Insurability

Psychologists who are eligible to enroll in any programs of Income Protection insurance described must submit evidence of insurability when making application. The insurance will not become effective until the first day of the calendar month following the date that Liberty Life Assurance Company of Boston determines that such evidence is satisfactory.

General Information

Who may apply for Trust Income Protection insurance? You are eligible to apply if you are a psychologist, are under age 65, and reside in the United States or Canada.

Premium

The annual premium is due on each May 1. Quarterly premiums are due on each May 1, August 1, November 1, and February 1. In the event you enter the plan on any date other than on the first day of a premium due date, the premium will be prorated to the next quarterly or annual premium due date.

When you have a claim

Detailed information regarding claims procedures is issued with each new certificate of insurance. Promptly report all claims to Liberty Life's office in Dover, New Hampshire.

Administration

This plan is underwritten and administered by Liberty Life Assurance Company of Boston, a member of the Liberty Mutual Group. It is the only Income Protection program endorsed by The Trust and has been in effect for 40 years. A group Income Protection policy has been issued to the Trustees of The Trust. Each participating member receives a certificate of insurance outlining the benefits to which one is entitled under the policy.

The descriptions here are necessarily brief and are subject to provisions that can only be expressed completely in the certificates of insurance which are available upon request and which will be sent to you when coverage begins.