Disability Insurer Profiles: Guardian

In the last few posts, we’ve looked at a few of the most common disability insurance companies for doctors.  See our profiles of MassMutual, MetLife, and Northwestern Mutual.  Guardian is another disability insurer that specifically markets its policies to physicians and dentists.

Guardian has been around for over 150 years and is one of the largest individual disability income insurance providers in the United States. Guardian’s business model emphasizes the need for continuous growth, and Guardian reports that it has paid out dividends to its owners every year since 1868. To reach its goal of uninterrupted growth and live up to its owners’ expectations that it will pay out dividends each year, Guardian must not only maintain its past levels of profitability, but also come up with new ways to be more profitable. Obviously, from Guardians’ perspective, denying high paying claims submitted by physicians and dentists is an attractive method of increasing its profits.

Company: The Guardian Life Insurance Company of America.

Location: New York, New York.

Associated Entities: The Guardian Insurance & Annuity Company, Inc.; Berkshire Life Insurance Company of America; Guardian Investor Services, LLC; Park Avenue Securities LLC; RS Investment Management Co. LLC; Reed Group, Ltd.

Assets: $84.1 billion in 2013.

Notable Policy Features:  Guardian policies oftentimes attach a “Residual Disability Rider” to their policies. This rider could impact you in significant ways if you are partially disabled and considering part-time work. For instance, the residual disability rider to your policy might contain the following provisions:

Income. Income means your gross earned income, less business expenses, but before any other deductions. It includes salaries, wages, fees, commissions, bonuses, business profits or other payments for your personal services.”

“Prior Income. Prior income means your average monthly income for the tax year with the highest earning in the three years just prior to the date on which you became disabled.”

“Current Income. Current income means all income which you receive on a cash basis in each month while you are residually disabled.”

“Loss of Income. Loss of income means the difference between your prior income and your current income.”

“Residual Indemnity. Residual indemnity  =  (loss of income/prior income)  x  monthly indemnity.”

“Termination of Residual Indemnity. Residual indemnity will stop when the first of the following events occurs:

  • you become totally disabled; or
  • the benefit period ends; or
  • your loss of income is less than 20% of prior income . . . .”

When read together, these provisions essentially mean that if you are partially disabled and working in another occupation, Guardian includes the additional income earned in that occupation when determining your current monthly income. This is important because you could lose your residual disability benefits if, after adding in your additional income, your loss of income amounts to less than 20% of your prior income. If you have this residual rider in your policy, you should be aware that accepting part time work could jeopardize your ability to collect residual disability benefits.

Read more about residual disability benefits.

Claims Management Approach: Like many of the other insurance companies we have profiled, Guardian frequently conducts in-home field interviews, in an effort to catch you off guard and observe you in a state of activity that may not accurately reflect the severity of your condition. In-home field interviews also allow Guardian to collect personal information, such as your daily routine, hobbies and interests, names of friends and family, and work hours, so that its private investigators can more easily conduct surveillance of you.

If your claim involves a psychological disability, Guardian will likely require you to submit proof that you are being treated by a PhD level therapist, even if you have been working with a non-PhD level therapist for a significant period of time. Consequently, if you have a Guardian policy and are in need of therapy, you might want to consider consulting with a PhD level therapist from the start.

A final tactic frequently used by Guardian is the peer-to-peer call, which consists of Guardian directly contacting your treatment providers over the phone without your consent. This tactic is similar to the in-home field interview in the sense that it is an attempt to catch your treating physicians off-guard by ambushing them with detailed questions about your disability. Since these discussions take place over the phone, your treating physicians will likely not have an opportunity to provide well thought out, thorough answers, and there will likely be little, if any, documentation of the call. Although this tactic is alarming, it is easily countered. As we explained in a previous post, peer-to-peer calls can be preempted in most cases if you have your attorney notify the insurance company that all communications with your treatment providers must be coordinated through your attorney’s office.

These profiles are based on our opinions and experience. Additional source(s): Guardian’s 2013 Annual Report; Guardian Fact Sheet 2013; guardianlife.com.