AMA Disability Insurance Review: Group Coverage Explained

AMA group disability insurance is often one of the first disability policy pitches that residents and young physicians encounter. But that doesn’t make it the only option or the best choice. Keep reading for our AMA disability insurance review and alternative disability insurance options.

What is AMA disability insurance?

The AMA-sponsored Group Disability Income Insurance plan provides exclusive benefits and rates to AMA members. Several policy variations are available, depending on whether you’re a medical student, resident or practicing physician.

Underwritten by New York Life Insurance Company, these group policies offer customized coverage, allowing you to choose your definition of disability. For example, you can opt for a “true own-specialty” policy that pays full disability benefits if you can’t work in your medical specialty — even if you choose to work in another field. However, this definition of disability isn’t standard, so it’ll cost you.

But AMA group disability insurance has limitations that can come as a surprise for many physicians. So, it’s best to weigh the pros and cons of this type of disability insurance with other alternative options.

To save you time in your search for disability insurance, AMA disability insurance isn’t an option for medical students, residents or physicians in New Hampshire, Vermont or Washington. If this is you, we encourage you to fill out the form below to learn about disability insurance policies unique to you. Otherwise, keep reading for our AMA disability insurance review.

Available AMA disability insurance plans

Physicians, residents and medical students have access to varying levels of disability coverage.

Option 1: Disability insurance for physicians

Established, early-career and finishing resident physicians under age 55 can apply for up to $15,000 in monthly benefits. However, coverage is also available for physicians from age 55 to 60 with reduced disability benefits that are capped at $5,000 per month.

Plan highlights for AMA disability insurance for physicians
Benefit amount	Up to $15,000
Benefit period	Up to age 67 if disabled before age 62 (additional benefit period details for disability from ages 62 to 75)
Elimination period	2, 3, 6 or 12 months
Definition of disability	“Own-Specialty” coverage based on your ability to perform the duties of your medical specialty (can’t be gainfully employed)
Rate discounts	AMA members receive a 35% rate reduction for at least the first year of coverage. Non-member physicians receive a 10% reduction.

Note you can choose “True Own-Specialty” coverage which allows you to collect disability benefits if you return to work in a different medical field or occupation. However, expect additional costs for this stronger definition of disability.

Option 2: Disability insurance for residents

Medical residents under 40 can sign up for AMA-Sponsored Group Disability Income Insurance for Resident Physicians. This plan provides up to $5,000 in monthly benefits regardless of your salary, debt or existing disability coverage.

Plan highlights for AMA disability insurance for residents
Benefit amount	Up to $5,000
Benefit period	Up to age 67 if disabled before age 62 (additional benefit period details for disability from ages 62 to 75)
Elimination period	2, 3, 6 or 12 months
Definition of disability	“Own-Specialty” coverage based on your ability to perform the duties of your medical specialty (can’t be gainfully employed)
Rate discounts	AMA members receive a 35% rate reduction for at least the first year of coverage. Non-member physicians receive a 10% reduction.

Note “True Own-Specialty” coverage is available, but expect an increase in premiums.

Option 3: Disability insurance for medical students

The AMA-Sponsored Medical Student Group Disability Insurance Plan is available to current full-time medical students under 40. It offers guaranteed acceptance with no medical exam or health questions.

Plan highlights for AMA disability insurance for medical students
Benefit amount	$1,000
Estimated premium	$41 per year
Benefit period	12 months
Elimination period	30 days
Definition of disability	A total disability that prevents you from attending classes and performing normal duties of a medical student

Note this policy can be transitioned to an own-specialty disability policy with up to $2,000 in monthly benefits after graduation, regardless of your health.

AMA policy riders for physician disability insurance

There are various disability insurance riders available with AMA-sponsored Group Disability Income Insurance, including:

• Medical school loan payment benefit. This policy rider could pay up to $200,000 of your student loans if you’re totally and permanently disabled before age 45. It’s automatically part of your coverage at no additional charge.
• Catastrophic disability rider. If you can’t perform two of six daily living activities (e.g., bathing, dressing, eating, etc.), this rider increases your base monthly benefit by 30%. It’s available with a 10% additional premium for physicians under age 60 and a 20% increase for older physicians.
• Cost-of-living adjustment (COLA). This rider adjusts your monthly benefit annually to keep up with inflation based on changes to the CPI-U. It requires a 15% increase in your premium.
• Rehabilitation benefits. If you participate in an approved occupational rehabilitation program during your disability, you might qualify for rehabilitation benefits that are separate from your monthly base benefit.
• Residual benefits. If you return to work part-time with a qualifying disability, this rider allows you to collect partial benefits if your income is reduced by at least 20%.
• Future purchase option. If you’re under age 40 and within the first three years of your policy effective date, you can take advantage of a one-time increase to your benefit amount without additional medical underwriting.
• Communicable disease benefit. This rider comes into play if you contract a communicable disease before age 67 and, as a result, earn less than 75% of your average monthly income.
• Family care benefit. This rider provides up to one basic monthly benefit to care for a close family member with a serious health condition. To qualify, you must be working less than 20% fewer hours and have a 20% loss of income.

Pros and cons of AMA disability insurance

Pros

• Allows you to choose your definition of disability. Choose between “own-specialty” and “true own-specialty” based on your preferences.
• Includes a student loan protection rider. Coverage is automatic with no premium increase.
• The plan is portable. Unlike employer-sponsored coverage, AMA group insurance will follow you if you change jobs.

Cons

• The monthly benefit amount might not be enough. If you’re in a high-income medical specialty or purchasing the plan after age 55, you might not have adequate coverage.
• A future increase option might not pan out. You must exercise your future increase within three years of your original effective date. So, you might not benefit from this rider if you purchase the policy at the beginning of your residency or fellowship.
• The plan ISN’T non-cancelable or guaranteed renewable. You can lose coverage if you no longer work as a physician or the AMA no longer sponsors the policy.
• Premium rates aren’t guaranteed. You can’t be singled out for an increase based on your health or the number of claims. But rates are age banded, so they can increase after you reach a higher age bracket. Additionally, the 35% rate reduction isn’t guaranteed from year-to-year.
• Coverage isn’t available nationwide. Physicians, residents and medical students in New Hampshire, Vermont and Washington aren’t eligible.

Is AMA disability insurance the right choice for you?

Because it’s a trusted and familiar source, many young residents and physicians assume they’re getting the best disability policy through AMA. While it might be a good temporary option to provide a basic level of disability insurance, it’s not necessarily a long-term solution, given the plan’s drawbacks and limitations. 

For example, future premiums can be an unexpected burden as they increase with age. Plus, the plan’s discounts aren’t guaranteed. So, you’re essentially signing up for unknown disability insurance costs as you advance through your career.

If you automatically sign up for an AMA-sponsored disability insurance policy, you could miss out on affordable options that provide better coverage.

Since the AMA insurance plan can change, it’s best to get a quote from AMA for your situation. SLP Insurance can then do a comprehensive comparison of other disability insurance options. Fill out your information in the box below, in order to get a quick quote!