Principal vs. Guardian Disability Insurance: Key Factors to Consider Before Choosing

Long-term disability insurance serves as income protection for injuries and illnesses that might prevent you from working for several months, years or even until retirement. There are various types of disability insurance. But high-income earners — like doctors and dentists — need a specialty-specific policy, such as those offered by two of the “Big 5” disability insurance carriers: Principal and Guardian. Let’s look at some key factors to consider when comparing Principal versus Guardian disability insurance.

Principal vs. Guardian disability insurance: Overview

Here’s a general summary of some of the base policy features and optional riders available with a Principal Income Protector policy versus a Guardian Provider Choice policy.

	Principal income protector	Guardian provider choice
Monthly coverage (maximum)	Up to $30,000	$20,000 for physicians(Up to $30,000 for lawyers)
Benefit period	2 year, 5 years, to age 65, to age 67, to age 70	2 year, 5 years, 10 years, to age 65, to age 67, to age 70
Elimination period	60 days, 90 days, 180 days, 365 days	30 days, 60 days, 90 days, 180 days, 360 days, 720 days
Definition of disability	Total Disability While Working (True Own-Occupation)Own-Occupation	Enhanced True Own-OccupationTrue Own-OccupationTwo-Year True Own-OccupationTwo-Year Modified Own-Occupation
Policy riders	Maximize Your Benefit, Annual Increase, Presumptive Disability Benefit, Limitation of Benefits for Mental/Nervous and Substance Abuse Disorders, Catastrophic Disability Benefits, Cost of Living Adjustment, Residual Disability Rider and Recovery Benefits	Partial Disability Benefits, Student Loan Protection, Future Increase Option, Benefit Purchase Option, Cost of Living Adjustment, Lump Sum Disability Benefit, Retirement Protection Plus, Catastrophic Disability Benefits, Supplemental Benefit Term Rider, Social Insurance Substitute Rider, Unemployment Waiver of Premium Rider, Automatic Benefit Enhancement Rider, Mental and/or Substance-Related Disorders
Premiums	Level	Level or graded

Own-occupation disability coverage: Principal vs. Guardian

Principal and Guardian both provide own-occupation disability coverage for physicians and other professionals with specialized training. But no two individual disability insurance policies are the same as it’s designed to be customized to the policyholder.

For example, specialty own-occupation coverage is included in all Principal policies for specialists in legal, medical and dental fields. But you can opt for an enhanced definition of disability that will allow you to work in another occupation while collecting disability income. This is what is referred to as “true own-occupation” or total disability while working.

In comparison, Guardian also offers true own-occupation coverage, as well as other optional definitions:

• Two-year modified own-occupation. Converts to an any-occupation after two years of being disabled.
• Two-year true own-occupation. Provides a two-year period of true own-occupation coverage, followed by a modified definition of disability for the remainder of the benefit period.
• Enhanced true own-occupation. Exclusively available to physicians to allow them to be gainfully employed, sometimes in their own practice.

Ultimately, your policy’s definition of disability can either provide you with more ways to qualify for benefits or stand in your way when filing a claim.

Guardian vs. Principal disability insurance: Differences in base features and policy riders

Disability insurance policies with Guardian and Principal have many similarities. For example, both providers will consider your age, gender, occupation class, medical history, state of residence and other factors to determine your premiums. But there are also many differences that can change from policyholder to policyholder, including policy structures, optional riders, available discounts and more.

Here’s a sample of potential competitive advantages between Principal versus Guardian disability insurance. However, keep in mind that there isn’t a one-size-fits-all policy and coverage options and pricing can vary. So, it’s best to work with an independent insurance broker — like SLP Insurance — to find the best own-occupation disability insurance for your situation.

Choices for level or graded premiums

All of the “Big 5” disability insurance companies use level premiums, allowing you to pay the same cost every month throughout the life of the policy. But Guardian (and MassMutual) also offer a graded option, which increases your cost annually.

Graded premiums can be appealing as they can be much cheaper in the early years of being a resident or fellow. But if you go this route, you’ll generally want to convert the policy into one with level premiums once you’re in practice to avoid paying excessive premiums later in your career.

Stand out base features and optional riders

When comparing Principal versus Guardian disability insurance, each has its own perks.

For example, Guardian provides a hospice benefit as part of its base policy. This feature waives the elimination period and pays total disability benefits when receiving services. It also offers a student loan rider which reimburses you for student loan payments if you’re totally disabled during the selected 10- or 15-year term period.

Whereas Principal offers a unique combination of no-cost future purchase option riders. Its annual increase (AI) rider provides a 3% automatic annual benefit increase. But you can also add on its maximize your benefit (MYB) rider, which allows for unlimited increases in the first three years based on income. After that, you can up your disability insurance coverage for major life events or when your salary increases significantly.

Potential drawbacks to consider for each disability insurance provider

There might be some definitive drawbacks for Principal versus Guardian disability insurance, including but not limited to:

• Principal Income Protector isn’t available to residents of California, Florida, Montana, New York, North Dakota, South Carolina, South Dakota or Wyoming.
• Guardian Provider Choice maxes out at a monthly benefit amount of $20,000 for physicians, which might not be enough if you have a $400,000+ salary.
• If you decline the benefit increase that comes with Principal’s AI rider for two years in a row, the rider will terminate (potentially terminating the MYB rider, as well).

There are a lot of angles to consider when choosing the best disability insurance, and what’s seen as a major benefit for one person could be viewed as unimportant or a barrier for another.

Related: Principal Disability Insurance Review, Guardian Disability Insurance Review

Which disability insurance policy should you choose?

Whether you choose own-occupation coverage with Guardian, Principal or another “Big 5” disability insurance carrier (The Standard, Ameritas or MassMutual), the details of the individual policy matter.

Your age, gender and occupation will greatly influence the cost of your policy, and your career and financial goals will help guide the policy structure. But you don’t want to sign up for costly policy riders you don’t need, nor do you want to pay more by working with an inexperienced insurance agent.

SLP Insurance will work with you to evaluate your existing disability policy, identify gaps in coverage and match you with the best discounts available. In fact, our team will send you to another broker if we’re aware of a better deal. Fill out the form below to get started.