Guardian/Berkshire Disability Insurance Review

Guardian is an excellent carrier and has had a great disability product for many years. Guardian’s competitive advantage is offering the best possible definitions however, we find the rates can be very expensive for certain specialties and their underwriting can be very strict. The discount programs offered to physicians are not as attractive as some other carriers. Guardian’s current product line is called provider choice and contains three different variations (essential, select, premier) each having multiple options, making it one of the more customizable and complex products.
  • Quality of contract 5/5
  • Rates 3/5
  • Application Experience 4/5
  • Communication/Service 5/5
  • Total score 4.5/5
Guardian is an excellent rated disability insurance carrier. They are one of the largest mutual insurance companies. Guardian’s primary focus is life insurance and annuities. They are headquartered in New York, NY. Guardian purchased Berkshire life insurance company of America. The current policies offered are provided by the Berkshire life insurance company of America. Guardian has been one of the top carriers for physicians over the past two decades.

2019 Financial Ratings:

  • Moody’s Investors Service - Aa2 Excellent
  • A.M. Best Company – A++ Superior
  • Standard &Poor’s - AA+ Very Strong
  • Fitch – AA+ Ver Strong
  • Comdex – 98/100
Total Disability: This benefit is key to determining your eligibility for benefits. Physicians tend to prefer a true own-occupation definition of disability insurance. A true own-occupation disability insurance policy allows a disabled physician to be employed in another occupation and still receive full disability benefits from the policy. The benefits will not be reduced or limited by working, or if able to work, in another occupation.
  • Enhanced True Own Occupation Definition: This benefit states that if you are totally disabled if due to injury or illness you are not able to work in your occupation. You will still be considered totally disabled even if you work in another occupation, as long as it's not your occupation. With the specialty language included for physicians, you can even be eligible for full benefits while still working in your occupation. The additional detail included in the definition is as follows:
    • For physicians performing surgical procedures: Guardian will consider you totally disabled if, due to injury or illness, you cannot perform the surgical duties that more than 50% of your income was generated from.
    • For physicians providing hands on patient care: Guardian will consider you totally disabled if, due to injury or illness, you cannot perform the hands-on patient care that more than 50% of your income was generated from.

    Our Analysis: Guardian’s contract has one of the best true own occupation definitions available in the industry. It is usually automatically included in the base policy for both the Premier and Select contract although other options are available.

Partial Disability Benefit Rider: Many disabilities allow physicians to continue working, but they may work less or earn less because of the injury or illness. Therefore, the partial disability benefit is an extremely important clause to include in the contract.
Guardian offers two options for partial disability that can include in either the premier or select contract:
  • Enhanced Partial Disability Rider: The trigger to qualify under this rider is a 15% loss of income due to injury or illness. The rider pays a portion of your monthly benefit that is equal to the proportional loss of income. There is an enhancement for the first 12 months of claim. For the first 12 months of a claim, the benefits paid would be equal to the actual loss of income, up to your monthly benefit, with a minimum of receiving at least 50% of your monthly benefit.
    Recovery benefits are included with an enhanced partial rider. The policy will pay benefits if a 15% loss income, caused by injury or illness, remains even after you medically recover from the injury or illness. The benefit is payable up to the maximum benefit period.

  • Basic Partial Disability Rider: The trigger to qualify under this rider is a 20% loss of income due to injury or illness, and you can no longer work the same hours or perform all the same job duties you did prior. premium is being paid. For the first 6 months of a claim, the benefits paid would be based on at least a 50% loss of income.
    Recovery benefits are included in this rider. Guardian will pay a lump sum recovery equal to 2x the monthly benefit after you recover from a partial claim that lasted 12 months.
    Our Analysis: The Enhanced Partial rider is an excellent benefit for a professional that has “fee for service” income. It is one of the only options for partial disability that is based on income only. Basic Partial is a suitable benefit for professionals that primarily receive a base salary. It is slightly less expensive than the enhanced option and still competitive with many other carriers.

When signing up for your first policy, it is wise to include provisions that provide the ability to increase coverage in the future, without medical additional underwriting. Guardian offers 3 options that allow you to increase coverage in the future without any additional medical underwriting, regardless of any changes in health.
  • Future Increase Option: This is available as a rider on both the Premier and Select contract. There is an additional cost to have this benefit included. It allows you to increase coverage, if you financially qualify, on an annual basis to age 55. As a resident or fellow, you can purchase up to 3x your base monthly benefit (5,000 monthly benefit qualifies for up to 15,000 FIO), and post residency or fellowship you can purchase up to 2x monthly benefit. The option to exercise this benefit occurs annually on policy anniversary.
  • Benefit Purchase Rider: This is available as a rider on the Select contract. This rider allows you to increase coverage every 3rd policy anniversary, if you financially qualify, up to age 55. If eligible, this rider can be added to a policy without any additional cost. The policy (subject to state and occupation) can be increased up to a $20,000 monthly benefit. This rider can be added to a policy without any additional cost. To keep the rider on the policy, you are required to apply for additional coverage every third policy anniversary and purchase at least 50% of the additional coverage you would be eligible for.
  • Automatic Benefit Enhancement Rider (ABE): This is a no-cost benefit to have that helps to automatically increase your monthly benefit while working and healthy. On an annual basis, ABE provides a 4% increase to your monthly benefit on an annual basis, for the first six years of the policy. As your coverage increases, your premiums appropriately adjust.
    Our Analysis: The future increase option with Guardian is more expensive than most other carriers. When you exercise the future increase option it will result in an additional policy.

  • Non-Cancellable Guaranteed Renewable: With this clause, the cost and coverage can never change. This terminology protects the policyholder from any policy changes. It means that if your premium is being paid, the insurance carrier cannot change the policy provisions, rates or cancel your coverage once established. This is built into the contract and therefore is automatically included for Guardians Premier and Select options. The policy is Non-cancellable & Guaranteed Renewable to Age 65 or Age 67 and then Guaranteed Renewable for life. During the conditional renewable time, the insurer does not have the right to make changes to any provisions of the contract, however rates can change for all members of the same class.
  • Mental and/or Substance-related Disorders: This benefit includes claims that stem from, drugs, alcohol, stress, anxiety, depression, or burnout. Guardian’s premier contract does not limitation the benefit period for Mental Nervous related claims (maximum benefit period would be the same as your selected benefit period). Guardian Select contract contains a 24-month limitation. A 24 month mental nervous limitation is applied for anesthesiologists and emergency room physicians.
  • Presumptive total disability benefit: Guardian will waive the elimination period for presumptive disabilities. The benefit is payable up to the maximum benefit period.
  • Waiver of Premium: Premiums are waived during periods of disability. Premiums are also waived for 6 months after disability ends.
  • Waiver of Elimination Period: If you suffer a disability that lasts more than six months and collect benefits, guardian will waive the elimination period, for any subsequent disability of 30 days or more and that occurs within five years.
  • Hospice Care Benefit: Considered totally disabled and elimination period will be waived if under a physician-ordered plan of care for hospice services.
  • Serious Illness Benefit Endorsement: This is a no-cost benefit that pays an additional 50% of your monthly benefit, in addition to your monthly benefit , for the first year if you become disabled as a result of a stroke, heart attack or cancer.
  • Occupational Rehabilitation Modification & Access Benefit Endorsement: This is a no-cost benefit that helps you get back to work. If you need some therapy to help get back to work as a result of your disability, this benefit helps cover the costs of an occupational rehabilitation plan.

  • Elimination periods available: 30 day, 60 day, 90 day, 180 day, 365 days, and 720 day
  • Benefit periods available: 2 year, 5 year, 10 year, age 65, age 67, age 70
  • Cost Of Living Adjustment (COLA): This benefit is designed to increase your monthly benefits on an annual basis during a claim. Guardian offers, 3% compounded, Based on changes in CPI up to 6% (with 3% minimum), or 4 year delayed 3% compounded adjustment.
  • Catastrophic Rider (CAT): Guardian offers 2 options for CAT. Both the Enhanced CAT and Basic CAT options provide benefits in the event of cognitive impairment or an irrecoverable disability as detailed in this policy option. The Enhanced Cat rider includes a 3% cost of living adjustment and can also provide benefits if the insured is unable to perform two or more activities of daily living.
  • Student Loan Protection: Provides a reimbursement of student loan payments while insured is totally disabled. The rider is for a duration of either 10 or 15 years and will reimburse an addiotnal 250-2,000 per month toward student loan payments.
  • Lump Sum Disability Benefit: This is a benefit that is receivable at age 60 to help provide for retirement. The amount paid is a lump sum equal to 35% of all total and/or partial benefits paid as in claims during the policy.
  • Graded Lifetime Rider: Provides a lifetime benefit for continuous total disability beyond policy expiration. The benefit payable is based on your age at the time the disability begins. For disabilities prior to age 45, the benefit is 100% of your regular monthly benefit. For claims after age 45, the benefit is reduced by 5% each year past 45 that the disability began.
  • Student/Resident Discount: The most common discount physicians can benefit from is a Student/Resident Discount. Guardian offers a 10% discount if you obtain a policy in residency or fellowship. These discounts are available to employees of most of the large GME programs. The discounted rate remains on the policy after graduation.

Guardian offers two different rate options they call level and graded.
  • Level rates are based on your age and these rates lock in your age when you obtain coverage. Therefore, your policy premium remains the same once you purchase coverage.
  • Graded rates are designed to allow someone to obtain a policy for a lower initial premium (generally 40% less). The tradeoff is that each year the premium will increase based on your age.
    In the long run you will pay less by securing level rates. Level rates will also guarantee your coverage remains affordable as you get older.