What if I Don’t Agree with How My Monthly Income is Being Calculated in my Partial Disability Claim?
While every disability policy contains definitions for key terms, such as “monthly income,” the policies do not always provide for what happens in every scenario. Many dentists receive income from multiple sources, and this can give rise to disputes over whether certain income amount should be factored into the benefit calculations.
Below are just a few example of complications that can arise.
[1] Many dentists own their own business, get paid via payroll, and take some extra distributions/draws in addition to W-2 wages. Some dentist take distributions on a monthly basis, and base those amounts on how the practice did in that particular month. But, more commonly, dentists take these distributions as-needed, or at irregular times of the year. This can cause problems when attempting to calculate monthly losses, as the actual income coming in during a particular month may be unusually high or low, and not necessarily reflect how the practice is doing or how much the dentist is working.
[2] It’s not uncommon for members of a dentist’s household to work and get paid by a practice. It’s important to show that the dentist’s family members are paid proportionately for their work. The insurance companies will also look at whether the dentist’s family member(s) were working prior to the onset of disability. Additionally, if both spouses are dentists but the practice is paying lump-sum amounts to a joint account without designating which dentist is being compensated, it can be difficult to get the insurance company to agree that all of the household income should not count for benefit calculation purposes.
[3] Insurance companies will also look at whether income from owning a practice is passive or active (and will likely try to argue that it is active, and therefore applied to monthly income). For example, it is not uncommon for dentists to get rental income from owned properties, or to invest in other practices. In this scenario, insurance companies will look to whether the dentist is investing only, or if they are actively involved in the practice.
As these last several posts have shown, partial disability claims include lots of moving parts and financial considerations—and you and your insurance company may be at odds when it comes to determining the amount of prior income, monthly income, and loss of income. Before filing a disability insurance claim, it is beneficial to speak with a disability insurance attorney to understand how your policy works, whether partial disability is the best option, and to determine any areas that may complicate your claim.
