Disability Insurance 

disability insurance 

When thinking about assets that you need to protect, you may list your car, home and other tangible possessions. It’s not uncommon to overlook your most valuable asset – the ability to earn an income.

Overview 

Key Features 

Our Advantage 

Individual DI Insurance 

Physicians and Dentists 

Contact Us 

Disability Insurance Overview

Whether it’s supporting your daily living expenses today or funding your retirement savings for tomorrow, your ability to earn an income is your most important financial asset.

Many people purchase life insurance to help protect their families should they die prematurely. But according to data from the Society of Actuaries, people in their working years run a greater risk of being disabled for 90 days or more than they do of dying.1 Disability insurance can help.

We don’t often realize how easy it is to become disabled. Most people think disabilities are caused by accidents, when in reality the majority of disabilities are caused by illness.2

2008-2010 Claims Approved by Medical Cause of Disability*

claim approved pie chart

*Number of claims approved by cause of disability as a percentage of the total number of claims approved for the period 2008-2010 with Northwestern Mutual.

A lengthy disability can be devastating, and is more common than one might think.

1Sources: Society of Actuaries Individual Disability Experience Committee 1999 Preliminary Table; Society of Actuaries 2001 Valuation Basic Table

2Sources: JHA 2002 U.S. Group Disability Rate and Risk Management Survey; Northwestern Mutual claims approved 2008-2010

NM-OVR-001 (1009)

Key Features of a Disability Insurance Policy

A disability income insurance policy pays a monthly benefit in the event of a disability. The monthly benefit amount can be used to replace income lost as a result of the disability, helping to meet ongoing financial obligations, and even maintain financial goals.

What Type of Disability Might You Face?

Most people automatically think of something dramatic like a car accident or stroke that would quickly render them totally and completely unable to work. In reality, disabilities are caused by accidents and illnesses from minor to severe - from headaches to cancer and everything in between. Some disabilities are sudden and serious, while others are milder, only slightly impacting one’s ability to work. And other disabilities develop slowly and worsen over time.

No one can know in advance, so it’s best to be prepared with disability insurance.

When evaluating a disability insurance policy, here are a few of the terms to become familiar with:

Definition of Disability

When comparing policies, the definition of disability can make all the difference in the amount of protection offered. You should look for a policy with a definition of total disability that focuses on your ability (or inability) to do the duties of your occupation - the job you were doing when you became disabled. This is in contrast to some definitions which look at your ability to do any job or occupation. Depending on the circumstances of your disability, it could be more difficult to qualify for benefits with that type of policy.

It’s also important to look for a policy that pays for partial disability as well as total disability. A disability insurance policy that has partial disability protection allows you to collect benefits even while working part-time.

Beginning Date

This is the period of time you must remain disabled before being eligible to receive benefits. Since long-term disability income insurance policies are intended to provide benefits for longer-lasting disabilities, most specify at least a 3 month beginning date or waiting period.

  • Longer beginning dates are less expensive than shorter beginning dates, but,
  • The longer you wait to receive benefits, the more likely it is you will need to use savings to meet your financial obligations.
  • Most individual disability income insurance policies are issued with a 91 day beginning date.

Benefit Period

This is the length of time you would continue to receive benefits for an ongoing disability. Benefit periods of different lengths are often available.

  • Longer benefit periods are more expensive than shorter benefit periods, but,
  • Longer benefit periods provide better financial protection against a long-term disability.
  • Most disability insurance policies are issued with a To Age 65 or To Age 70 benefit period and provide benefits until likely retirement age.

NM-KF-001 (1009)

Our Disability Insurance Advantage

If you were to become disabled, which company would you want handling your claim? Northwestern Mutual celebrates its 43rd anniversary in the disability insurance marketplace in 2012. Consider our:

  • Financial Strength
  • Policyowner value
  • Longevity

Financial Strength

Of the most prominent companies in the individual disability income insurance market, Northwestern Mutual has the highest financial strength ratings awarded to any life insurer by all four of the major credit rating agencies.

Northwestern Mutual also has the lowest general insurance expenses (as a percentage of earned premiums) and has allocated by far the most in dividends for policyowners.

2011 Disability Insurance Fact Sheet

Policyowner Value

We have allocated more than $1 billion in total dividends for our policyowners during the past five years. We have allocated more than $1.7 billion in total dividends for our policyowners since 1969, which is the year we began offering disability income insurance.

2011 $226 million
2010 $209 million
2009 $203 million
2008 $185 million
2007 $148 million

Source – Northwestern Mutual. Amounts shown were allocated for individual non-cancellable disability income insurance policies. Dividends represent the allocation of divisible surplus to eligible policyowners. Illustrated dividends are not estimates or predictions of future results. Neither the existence nor the amount of a dividend is guaranteed. Dividends may be zero in some cases. As is true of all participating policies issued by Northwestern Mutual, decisions with respect to the amount of divisible surplus and its allocation to eligible policyowners as dividends are within the sole discretion and sound business judgment of the Company’s Board of Trustees. There is no guaranteed specific method or formula for the determination or allocation of divisible surplus. Northwestern Mutual’s approach is subject to change.

We have paid more than $2.3 billion in total disability benefits to our policyowners during the past five years. We have paid more than $6.3 billion in total disability insurance benefits to our policyowners since 1969.

2011 $478 million
2010 $473 million
2009 $452 million
2008 $421 million
2007 $409 million

Source – Northwestern Mutual. Amounts shown were paid on individual non-cancellable disability income insurance policies.

Longevity

In 1980, there were 54 companies that were considered major competitors in the disability income insurance marketplace. Today, that number has dwindled to 11. Many competitors have either abandoned the disability income marketplace, or have merged their product line with another company.

1. UNUM 7. RiverSource
2. Northwestern Mutual 8. Standard
3. Berkshire/Guardian 9. Union Central
4. Mass Mutual 10. Ohio National
5. Metropolitan 11. Illinois Mutual
6. Principal  

Of the top five competitors on the list, only one has remained in the disability income insurance marketplace without merging its product line with any other company.

That company is Northwestern Mutual.

Source: 2011 Company Annual Statements

Rankings are based on the amount of earned premium for individual non-cancellable disability income insurance policies.

Your Security

A disability in a family could seriously hinder the financial future of a partner or children, if precautions are not taken. A well-designed and customized income protection plan must include disability income insurance.

When you consider strength, policyowner value, reputation and longevity, wouldn’t you agree that Northwestern Mutual may very well be the best place for your disability insurance coverage?

Our Products

  • Individual Disability Income Insurance
  • Interim Term

NM-ADV-001 (0610)

Individual Disability Income Insurance

Purchased by an individual to protect his or her most valuable asset – the ability to earn an income. Provisions and features cannot be changed by the insurance company once issued.

Each individual has unique needs and desires in protecting their income. Northwestern Mutual offers a great deal of flexibility and options that allow you to customize a policy to meet your needs, and fit within your budget.

Types of Disability Insurance


Non-Cancellable Guaranteed Renewable
Premiums cannot be changed by the insurance company once the policy is issued.

Guaranteed Renewable
Premiums may be changed by the insurance company on a class by class basis after the policy is issued.

Interim Term
Provides temporary coverage until an employee qualifies for employer-sponsored disability coverage. The policy is guaranteed renewable for one, two, three, four, or five years.

Key Features

Part of every disability income insurance policy, with choices to meet your needs:

Beginning date
Disabilities are not always measured in consecutive days. Northwestern Mutual allows an extended period of time to accumulate days of total or partial disability toward the Beginning Date of benefits. Days of disability due to different causes will be accumulated to satisfy the Beginning Date.

Benefit Period
Northwestern Mutual offers Maximum Benefit Periods of two years, five years, to age 65 or to age 70. Most people choose to purchase coverage that would provide disability benefits to age 65 to help insure against a long-term disability.

Definition of Total Disability

  • Specifies the circumstances under which you would be considered totally disabled, and receive your full monthly benefit.
  • Most disability income insurance definitions of total disability focus on the ability to perform the principal duties of the regular occupation – the job you were doing when the disability struck.
  • Northwestern Mutual offers a variety of alternative definitions to best fit your unique circumstances.  Depending on your state of residence there is even a definition designed specifically for physicians and dentists.
  • Your financial representative will be able to recommend the best definition for you based on your specific circumstances and occupation.

Standard Features

Automatically part of every disability income insurance policy:

Benefits for Partial Disability

  • Pays in proportion to the amount of income lost.
  • Eligible when you are able to do some, but not all of your duties, or unable to spend as much time at your job as you did prior to disability.

Transition Benefit

  • Pays after you return to full-time work if your income is at least 20% less than it was prior to disability.
  • Paid for up to 12 months to help you transition back into productive work.

Benefits for Presumptive Total Disability

  • For total and irrecoverable loss of vision, hearing, or speech, or for loss of use of two or more limbs (hands/feet).
  • Benefit is paid from the date of the loss without a beginning date.
  • Benefit is paid for life, as long as the disabling condition continues.

Presumptive Plus Benefit

  • Adds 50% more benefit for presumptive total disability occurring prior to age 50.

Waiver of Premium

  • Waives premiums on your disability insurance contract during periods of total or partial disability.
  • Helps further with cash flow during a potentially difficult financial time.

Optional Features

Available at additional cost. May not be available in all states, with all plans, or to all insureds.

Future Increase Benefit*

  • Tied to the Consumer Price Index (CPI).
  • Helps your monthly benefit keep pace with inflation before and after disability.

Indexed Income Benefit*

  • Tied to the Consumer Price Index (CPI).
  • Helps your monthly benefit keep pace with inflation during a disability.

*Because these benefits are capped, they may not provide complete protection against inflation.

Additional Purchase Benefit

  • Guarantees your ability to purchase additional disability income insurance coverage in the future regardless of changes in your health, activities, or occupation.
  • Subject only to financial underwriting.

Social Insurance Substitute Benefit

  • Provides disability benefits that are coordinated with benefits from the Social Security Administration (SSA) and/or State Disability Insurance (SDI) programs.

Download Maximizing Your Protection Brochure
Download Your Most Important Asset Brochure

The policies described here refer to policy forms RR.NCDI.(0101), RR.NCDI.(0909).CA, RR.GRDI.(0101), RR.GRDI.(0909).CA, RR.INT.(0101), RR.INT.(0909).CA, RR.NCDI.ML.(0101), and RR.GRDI.ML.(0101), which may not be available in all states. This information is intended to explain provisions contained in the policy; it is not the insurance contract, only the actual provisions will control.  Precise contract language may vary from state to state. For costs and complete details of coverage, contact a Northwestern Mutual financial representative.

Exclusions and limitations include pre-existing conditions. There will be no benefits for a disability or loss that results from an accident that occurred within two years before the Date of Issue; or results from a sickness that existed within two years before the Date of Issue; or if the accident or sickness was not disclosed or was misrepresented in the application.

A sickness is considered to have existed if symptoms were present that would have caused a prudent person to seek diagnosis, care or treatment; or if medical advice or treatment was recommended or received from a health care practitioner.

There will be no benefits for a disability or loss that is caused or contributed to by an act or incident of war, declared or undeclared, the suspension, revocation or surrender of a professional or occupational license or certificate or the commission of or attempt to commit a felony. There will be no benefits for a disability or loss for any period the Insured is incarcerated or is excluded from coverage by an Agreement of Limitation of Coverage.

Benefits will not be provided for more than 24 monthly benefit periods in total for the life of the policy for all disabilities or losses primarily due to any mental disorder, or substance abuse or dependency. This limitation will not apply if, at the end of 24 months of benefits, the Insured is confined in a hospital and is continuously confined thereafter.

NM-DI-001 (1009)

Disability Income Insurance for Physicians and Dentists

In the course of conducting market research with physicians, the latest Harris Interactive study1 revealed that physicians are familiar with the chances of suffering a disability that could prevent them from working. And physicians are aware of the role that disability income insurance (DI) can play in providing protection for income that could be lost as a result of a disability.

However, the Harris study also uncovered that there are discrepancies between:

  • What medical professionals’ expectations are of the coverage provided by “own occupation” (“own occ”) disability income insurance.
  • What actually would happen at time of claim.

Visit the Disability Income Insurance Knowledge Center for Physicians and Dentists2 to see if your expectations match the reality of “own occ” coverage.

What’s Expected?

As a physician or dentist you might expect that if you are unable to deliver your most important duties because of illness or injury, you will receive full benefits from your disability income insurance policy. This expectation may encompass two misconceptions.

First, the definition of total disability is not based on your inability to do your “most important” duties, but is instead based on your inability to do your principal duties (in some states, referred to as substantial and material acts.) As a result, you might consider yourself to be totally disabled in cases where you would only be partially disabled.

Further, in situations where an individual is totally disabled, the expectation to work in another occupation may be unrealistic.

Both misconceptions could lead to a gap between expectations and reality of what “own occ” coverage provides.

“Medical Occupation” – the Flexible Own Occ Definition

Based on insights from the Harris Interactive research, Northwestern Mutual has developed a Medical Occupation Definition of disability. Our goal is to provide physicians and dentists with an option that gives you choices, especially in the event of a partial disability.

How does Northwestern Mutual’s Medical Occupation Definition differ from typical own occ? The key differences come into play in two instances:

  • When you are totally disabled, but choose to work in a different occupation; and
  • When you are partially disabled, not totally disabled.
Situation
With Typical
Own Occupation3
With Northwestern Mutual's
Medical Occupation3
You are considered totally disabled because you cannot do all of your principal duties, and you are not gainfully employed You will be eligible to receive your full disability insurance benefit. You will be eligible to receive your full disability insurance benefit.
You are considered totally disabled because you cannot do all of your principal duties, and you are gainfully employed in another occupation You will be eligible to receive your full disability insurance benefit. You can earn up to 20% of your pre-disability income and still be eligible to receive your full disability insurance benefit.

If you earn more than 20% of your pre-disability income, you will receive a proportionately reduced benefit.
You are considered partially disabled because you are capable of doing some, but not all of your principal duties You must be gainfully employed to be eligible to receive a proportionate disability insurance benefit. In specific circumstances, you will have the flexibility to decide to:

  • Continue gainful employment and receive a proportionate benefit.
or
  • Cease gainful employment and receive your full monthly benefit.

As you evaluate the definitions, consider how unlikely it would be to be totally disabled and gainfully employed in another occupation at the same time. Also consider if you were determined to be only partially disabled – what options would you like to have available should you need to utilize your disability insurance?

Use the Disability Income Insurance Knowledge Center for Physicians and Dentists2 to see the difference in how the Northwestern Mutual Medical Occupation Definition versus “own occ” would impact your financial security in the event of a disability. And view this brief presentation to see how the Northwestern Mutual Medical Occupation Definition would work at time of claim.

12008 Harris Interactive Study

2These tools are not intended for use in California.

3The ability to perform the principal duties of your occupation is only one of the factors that determine eligibility for disability benefits. All individual disability income policies have exclusions and limitations.

 

Contact Form
All fields marked with * are required
First Name*
Last Name*
Address*
City
State
Zip*
Phone*
Email
Current Customer?
Are you a current customer?* Yes No
Tell us more about your needs...
 
All personal information which is provided via this form is secured during transmission and processing.

By providing your email address you consent to receiving email messages from Northwestern Mutual.
 
Have an Advisor Contact You
Find an Advisor
Or
Customer Service
Most Requested Forms
Tools and Resources