Issues with Potential Disability Claim if Not (currently) Earning Salary??

[taz7]

Background: Early 40s law partner at amlaw100 firm, earning mid 6-figs. have had Mass Mutual Radius IDI (with own-occupation rider, benefits to age-65) for past five years.

A "mid-life crisis" finds me leaving big-law to start my own firm; not planning on taking any salary for the first year or two: living off savings and plowing all revenue into growing my firm.

Question: if anything happens to me, and I have to make a claim, are there going to be any issues, given that I don't currently have a salary (though i'm obviously working full-time in my normal occupation as a lawyer).

Thanks!

 

[aclaro]

You should check the wording of your policy. The payment is usually based on prior earnings at time of claim. Mass Mutual currently (I believe, don't hold me to this word for word) uses the greater of the average monthly earnings over the last 12 or 24 months or highest consecutive 24 months of last 60 months. In this case the monthly benefit is the maximum benefit. This is how current policies do it. I have heard of old policies that don't do this and just pay the benefit amount regardless of earnings at time of claim. Read your policy.

 

[Caryn Montague]

You have excellent coverage. While I understand your concern, you are continuing to work versus not. Any group coverage may not transition with you (although you are going to want to have a full insurance check up before separating from the firm to ensure you keep benefits you can). You own coverage, however, transitions with you - so long as you pay the premium.

While I cannot think of any reason -given the criteria you laid out- that a claim would not be paid, I can gently suggest you take the question directly to your broker and Mass Mutual, in writing. I have reason to believe the answer will come back most favorably but having it in writing will reduce your concerns. In your query, you will also ask what happens to the monthly face amount of your coverage if your income is diminished due to having to pay office overhead expenses. (Part of the answer is that you and your broker will arrange to take care of that risk directly, asap.)

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