Considering Coverage During Training
First and foremost, it’s important to note the primary benefit of securing coverage during training is that you’ll be protected if an injury or illness prevents you from working. No one ever plans for an accident, injury or concerning medical diagnosis, but it happens anyway. Let’s not forget medical residents and fellows suffer from disabling injuries and illnesses too.
Disability insurance pricing is affected by age, so it’s typically less costly to secure coverage at a younger age. It is also much easier for physicians to secure discounts on their policies during residency and fellowship because discounts are more easily accessible. With select companies, the discounts available to medical residents and fellows are also greater than those available to attending physicians.
Generally Better Health
Private disability insurance policies are generally medically underwritten, and an individual must be in fair health to qualify for coverage. Few medical conditions will exclude applicants from qualifying outright but many could warrant medical exclusions, a provision used by insurers to limit their exposure to specific pre-existing conditions in an insured’s medical history. Having coverage with an exclusion is better than not having coverage at all, but it is ideal to apply for coverage when one’s health doesn’t yet include any pre-existing conditions.
Applying for disability insurance generally requires full medical and financial underwriting, which for many means providing tax returns, a medical history questionnaire and an in-person insurance medical exam. Although most applicants will still undergo full medical underwriting, medical residents and fellows can secure certain levels of coverage without any financial underwriting or in-person insurance medical exams. Applying for coverage during residency or fellowship doesn’t have to be a huge inconvenience.
Top Three Mistakes to Avoid
1. Get Multiple Quotes
You don’t necessarily need to request quotes from multiple insurance agents, but should review quotes from multiple insurance companies. Any insurance agent can claim to objectively review options from multiple companies, but it’s important for consumers to actually be presented with multiple options. There are 6 primary companies offering a True Own-Occupation definition of total disability today: Guardian, Principal, MassMutual, Standard, Ameritas and Ohio National. If you aren’t seeing quotes from at least 4-5 of these, we feel you should be wondering why.
2. If your NOT healthy, DON’T rush
Not everyone will be so fortunate, but there are several hospitals / GME programs nationwide offering GSI (guaranteed standard issue) policies to medical residents and fellows. These programs are not always the most cost effective, but they allow for residents and fellows to secure quality individual disability insurance policies without requiring any medical underwriting. For unhealthy individuals who may not otherwise qualify for coverage, or who would otherwise qualify for coverage with significant restrictions, GSI plans present a tremendous opportunity. While these policies do not require medical underwriting, most are only available to individuals who have not previously been declined by another insurance company. For those concerned about how their medical history will impact their eligibility for coverage, it is strongly advised that you ask your agent about possible GSI options available through your hospital / GME program.
Many of the GSI programs offered today are exclusively available through an endorsed insurance agent or agency which means not all insurance agents can offer it. For that reason, not all insurance agents will know about these programs or be interested in soliciting them since they are not personally able to receive compensation from selling the policy.
3. Disability insurance is NOT that complicated
Securing insurance is an important and sizable purchase that deserves some due diligence. While these policies are quite detailed and include many moving parts, they are not as complicated as some insurance agents would like you to believe. As you evaluate your options, it can be beneficial to work with an agent who is willing to spend time educating you on the few major differences, so you can make an informed decision. Each insurance company may offer a slightly different version of a similar feature, and those differences could be decision-maker for your situation. Reviewing the over-simplified spreadsheets some insurance agents offer today does not create informed consumers.
We enjoy helping people with their disability insurance because we truly believe it’s important and have witnessed it’s benefits in action. That said, quality disability insurance policies can be costly, and we believe it’s important to find a balance between quality coverage and affordable premiums. Securing adequate coverage, without the extra bells and whistles, is better than not securing coverage at all because of ultra-high premiums – at least that’s our opinion. Private disability insurance policies can be customized, and we encourage consumers to learn about their options, but generally recommend the following features:
- Benefits payable to age 65 (longer benefit periods are obviously better, but also more costly and may not be a priority for those with a budget)
- Noncancelable and guaranteed renewable (secure pricing and policy terms)
- True own-occupation definition of total disability (coverage based on the performance of your medical specialty)
- Partial or Residual disability benefits (provide benefits when an illness/injury causes a loss of income, without causing total disability)
- Benefit Increase option (particularly important for early-career physicians expecting increases in income)
- Cost of Living Adjustment rider (particularly beneficial for young physicians with the potential of decade-long claims)
Optional riders are available for an additional premium. Some policy benefits and features are not available to all occupations.