How to Tell if You’re Getting Good Disability Income Planning Advice

Because they recognize the need to protect their most valuable asset – their earning power – physicians are a ready and willing market for disability insurance sales people. Most physicians, by the time they enter residency, are bombarded with solicitations which continue throughout their working lives.
For most young physicians, the initial advice they receive for addressing their disability income needs is typically provided by insurance sales people, incentivized by their company to sell its products. This leaves to question just how good is the advice and whether it’s offered in the best interest of the physician or the sales person.

Here’s how you’ll know if you’re getting good disability income planning advice:

1.  You are provided with a comparison of several physician disability insurance products from top tier disability insurers.

There are only six companies that offer top tier, physician-specific disability products – Guardian, MetLife, Ameritas, The Standard, Mass Mutual, and Principal Group. Any comparison of disability products must begin with them. If the agent tries to tell you theirs is the very best product, don’t buy it, because there really is no “best” product – only ones that can offer you more features or options that suit your particular needs, and even then, it sometimes requires a combination of different disability products to create a tailored solution. Make sure the agent you’re working with can explain the differences between the policy features across these plans and can offer plans with most of the top tier physician disability insurance companies.

2.  The advisor recommends you not rely solely upon a GME, employer-sponsored, or other group policy.

While a GME policy is inexpensive and convenient, you would be better off using a GME policy as a supplement to an individual disability policy that meets your current needs. At best, a GME policy is a temporary solution. It’s not usually portable, so when you change employers, you will have to obtain another one if it’s offered or buy individual disability coverage. While it may be convenient to get coverage without a medical exam, you are paying blended premium rates built on the average health of all the residents in the program instead of rates that truly reflect your individual health and risk of disability. That means you could be paying more and getting less benefit. When you are in residency, you will never be younger or healthier, and individual disability coverage will never be cheaper. You will need to get individual coverage at some point, why not lock in the most inexpensive disability insurance rates possible? The best, physician-specific disability policies will allow your benefits to grow as your income grows even if you become uninsurable.

3.  You are advised to buy the amount of coverage you need, not necessarily the amount you are offered.

Some disability insurers will offer medical residents policies with benefit amounts that far exceed their current income needs. You and your disability insurance advisor should consider your current and future income needs and design a policy that will cover you today while protecting your income growth. You shouldn’t pay any more for disability income coverage than you absolutely have to.

4.  You are shown how a GME policy can integrate with an individual disability policy to create the optimum amount of coverage cost efficiently.

Anyone who suggests that you don’t need individual disability coverage because a GME plan is all you need isn’t telling you about the severe limitations of the GME plan. You’ve invested too much time, energy and money in your career not to have the best possible disability coverage at the most affordable cost.
Unlike other forms of insurance, disability insurance is a very complex vehicle with a lot of moving parts that have to be well-coordinated in order to provide the optimum coverage physicians needs throughout their working lives. With so much at stake, physicians need to understand the difference between a “product” solution and a long-term planning solution in addressing their disability income needs. The advice they receive for protecting their most valuable asset could be the most vital advice they receive throughout their financial lives.

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