Here’s why your employer (or school) should offer Multi-Life GSI disability insurance
Multi-life GSI offers groups of physicians discounted rates on superior individual disability insurance policies
Robust income protection is a pillar of financial planning for physicians. As you take stock of your financial assets and liabilities, it is important to assess whether your earnings are properly insured. Own-occupation, long-term disability (LTD) insurance provides a critical safety net in the event that a physician becomes too ill or injured to earn their usual income. However, insufficient insurance products can still leave physicians with serious coverage gaps.
Most physician employers provide or subsidize group disability insurance for employees. However, these policies tend to be seriously lacking, with restrictive definitions of disability, sudden changes in coverage and cost, and extremely limited portability from employer to employer. Nevertheless, due to the convenience and affordability of these policies, too many physicians end up relying on their employer-offered group coverage instead of investing in an individual LTD insurance policy.
Multi-life Guaranteed Standard Issue (GSI) disability insurance is an attractive alternative to group disability plans. While multi-life GSI is still offered under the sponsorship of an employer or educational institution, these are individual policies that allow doctors to take advantage of lower rates and skip the medical underwriting process. Better yet, these policies are portable and scalable, so physicians can carry multi-life GSI policies with them throughout their career and increase their benefit amount when necessary. While still lesser-known than traditional group disability plans, multi-life GSI insurance is gaining popularity as a top-of-the-line insurance product that benefits both physicians and their employers.
What is Multi-Life GSI?
Multi-Life GSI is an insurance offering that combines the convenience and affordability of group disability insurance with the own-occupation, portable coverage of an individual policy. A multi-life GSI is a customized insurance product designed to cover a group of physicians (ten or more) under the sponsorship of either an employer or an educational institution. While each policy still belongs to an individual physician, the insurance company can offer discounted rates due to the group’s economy of scale.
With Guaranteed Standard Issue disability insurance, every physician is guaranteed approval for a policy at a single rate, regardless of age, gender, occupation, or health history. There are no medical exclusions and no individual medical underwriting. At the request of the sponsoring institution, the insurance carrier will offer a uniform policy option for every physician in the group with the same cost, benefit amount or percentage, and riders. The sponsor can select from the carriers’ variety of riders to include in each GSI policy. In some cases, the employer will cover the cost of the insurance premium as a perk for all employees (or in the case of medical schools, all existing residents), while others allow the physicians to opt-in to the GSI and pay the insurance premium independently.
Multi-life GSI’s typically include:
- Full own-occupation definition of disability
- Enhanced Residual Riders to pay a portion of the benefit amount in the event that your income decreases due to partial disability
- Future Increase Option (FIO) riders to allow physicians to increase their coverage amount throughout their career as their earnings grow
Some institutions also include a Cost of Living Adjustment (COLA) rider, as well as the student loan rider which adds an additional amount of benefit to cover student loan repayment obligations in the event of a lost income due to disability.
Who Benefits from Multi-Life GSI?
By streamlining and discounting high-quality disability insurance, Multi-Life Guaranteed Standard Issue disability insurance offers unique advantages that benefit all members of a physician group, including:
While women comprise roughly 45% of all training physicians nationwide, female doctors are still paying higher insurance premiums for disability insurance. Data shows that women are more likely to make a disability claim (partly resulting from pregnancy, childbirth, and immunodeficiency related disorders) and tend to stay on disability leave longer than their male counterparts. As a result, women physicians typically end up paying 40-60% more for individual disability insurance policies. However, multi-life GSI policies can help women physicians avoid these higher insurance premium costs.
“When we offer an employer a disability insurance contract for a group of employees, we offer a blended unisex rate,” explains disability insurance expert Barry Dittus of Ohio National. “As a result, the female physicians in the group will end up paying 30-35% less in insurance premiums at the unisex rate before we layer in the multi-life discount.” While male physicians won’t receive the same extent of savings from the unisex rate, they still benefit from the discounted insurance premiums and coverage from one of the most robust insurance products on the market.
Physicians with pre-existing conditions
Multi-life GSI can also provide critical disability coverage for physicians with pre-existing medical conditions. When carriers offer an employer a multi-life GSI contract for a physician group, there is no individual medical underwriting process, which means that no medical conditions are excluded and every physician is guaranteed approval. This is a pivotal opportunity for physicians with pre-existing conditions to access robust disability coverage.
“The medical dictionary is deep and long, so physicians can face exclusions for a myriad of conditions,” notes Dittus. “Take for example, a physician who was inspired to become an oncologist because of their own childhood battle with cancer. Typically, this doctor may be unable to purchase individual disability insurance because of their medical history. However, when you’re part of a multi-life group, the insurance company can’t ask individual medical questions so you are guaranteed to receive the exact same policy as other physicians without any underwriting, exclusions, or insurance premium hikes.”
Multi-life GSI insurance can help educational institutions and employers retain and attract top talent. Traditional employer-sponsored group disability insurance is notoriously restrictive and leaves physicians with dangerous gaps in coverage. By comparison, multi-life GSI offers employees a far more robust insurance product with little to no increased cost for employers.
A multi-life GSI contract has a flexible design and is easy to implement. The sponsoring employer or institution can determine whether they–that is, the sponsor– will cover the costs of the insurance premium, share the costs with physicians, or offer the policies on a voluntary, employee-paid basis. Multi-life GSI policies can be an attractive recruiting tool, as they allow physicians a rare opportunity to lock-in career-long discounts on portable, own-occupation disability policies.
“[Multi-life guaranteed standard issue disability insurance is by far the cleanest, smartest way for resident physicians to get affordable coverage early for many who want to avoid the medical underwriting process,” says Dittus. “Plus these policies let physicians increase their coverage without going through medical underwriting for the rest of their career. It baffles me that more medical institutions do not take advantage of this option for their training physicians.”
Multi-life GSI is one of the highest-quality disability products available to physicians. Too often, doctors will put off buying disability insurance at the start of their career. Other times, a physician might pick up a small policy and never think about their coverage again for years. Unfortunately, the risks of insufficient coverage only increase as a doctor progresses in their career.
For example, imagine a gastroenterologist, Dr. Cruz, who purchases a modest policy ($5,000 per month benefit) as she exits her residency. She crosses ‘disability insurance’ off her to-do list and does not pay attention to the policy for the next decade. By age 45, she is earning nearly $400,000 and realizes that a $5,000 per month benefit is not nearly sufficient to protect her income. To pick up another individual policy, Dr. Cruz would typically need to go through medical underwriting and pay higher insurance premiums due to her older age. However, multi-life GSI can help physicians skip the process and access guaranteed coverage. In this way, multi-life GSI provides supplementary benefits for older physicians who may need additional coverage, and it can help younger physicians avoid these coverage gaps altogether.
To sum up, here’s a recap of some of the most important features of multi-life GSI to protect the earnings of all physicians:
- Guaranteed approval
- Own-occupation, long-term coverage
- No medical underwriting required
- Discounted unisex insurance premium rates
- Fully-portable for the duration of a physician’s career
- Future Increase Option to scale up coverage throughout career
How can I get Multi-Life GSI Coverage?
Multi-Life GSI policies are only available to physicians under the auspices of an employer-employee or institution-trainee relationship. However, if your employer or school does not yet offer multi-life GSI policies, you can get the ball rolling by contacting one of our independent insurance advisors. Many employers end up introducing multi-life GSI offerings at the request of employees, and top insurance carriers can develop a flexible, custom quote for any physician group of ten or more. The majority of sponsoring institutions end up saving money and improving the quality of their disability insurance offerings by providing multi-life GSI.
Whether you’re an M4, resident, fellow, physician employee, or an institutional representative, you can talk with one of our advisors today to learn more about implementing a multi-life GSI disability insurance plan at your organization.
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