Mets Day 413 - On disability insurance

After more than 8 months, Unum Insurance Company has finally agreed to make full payment pursuant to my disability insurance policy.  It's an income replacement policy.  The policy provides that, if due to medical reasons I am no longer able to do what I had been doing (first chair complex intellectual properly litigation), and have lost more than 20% of income as a result, Unum would pay me according to a complex formula.  If my income loss is greater than 80%, then Unum would pay the full contract amount.

I agreed with my firm that, effective January 1, 2013, I would work no more than 20-25 hours per month, and would be paid about 15% of what I had been paid in 2012 and earlier years.   That's basically enough to pay for my health insurance and various other professional expenses.  (Law firm partners must pay 100% of the cost of their health insurance; there is no employer subsidy, so it's basically the COBRA cost).  I am essentially uninsurable in the private health care market, so being able to keep on with the firm's health insurance is a good thing. 

It's been a long slog with Unum.  It took forever to get them the medical records (I eventually personally obtained virtually all of the records and sent them to Unum, keeping copies for myself), and went through three claims representatives and two supervisors, and multiple "tentative" rejections, misinterpretations, lost paperwork, and miscalculations -- none of which were ever in my favor.  What a surprise.  But I'm glad that Unum has finally ponied up.  The other insurance companies that sold me similar policies (MassMutual), agreed to pay in full relatively quickly.  Because I paid for these policies with post-tax dollars, the payments that I am now receiving are tax-free.  The policies provide that they will continue to pay to age 65, or until I die, or, if by some miracle I am cured, able to resume my profession, and meet or exceed my pre-cancer earnings.  Having this revenue stream gives me great comfort and relieves the financial pressure that otherwise would quickly become crushing.

 Somewhat to my surprise, I found that I had also bought a policy from MetLife that makes payments into a 401(k) account, since I no longer have the earnings or ability to save for my (now theoretical) retirement.  It likewise will continue to age 65.  I vaguely remember making the decisions years ago to buy disability coverage, and adding to the scope of disability coverage from time to time, but until my cancer diagnosis, I paid little attention to the details.  I didn't even realize that I had purchased four different disability income replacement policies from three different companies -- it was all handled by a single agent, who I trusted to bring me and my fellow law partners the most appropriate coverage. 

I must say that I'm no fan of insurance companies -- they seem to be eager to accept your money, but unreasonably resist paying out -- but now that I am on the beneficiary side, I'm glad that I listened to my agent over the years, bought the policies, and increased my coverage as the opportunities were presented to me.  My agent has been invaluable in prodding Unum to pay up. 

I guess that this is a testament to the benefits of disability insurance.  I'm told that the odds of suffering a career-altering disability are greater than a premature death, yet apparently life insurance is more widely purchased that income-replacement disability insurance.  I've carried and paid for these disability policies for years, just as I have carried and continue to carry a substantial amount of life insurance.  Readers who are the primary breadwinner for their families, or who would find it difficult to live on just your partner's income, consider calling your agent to review and update your insurance policies.