Great podcast on Disability Insurance

[Miss Bonnie MD]

Many of you may not be familiar with Stephanie Pearson, MD - she's an OBGYN who became an insurance broker. She learned the hard way that she was not adequately insured. She did a VERY informative podcast with Carrie Reynolds @ Hippocratic Hustle.  I think all docs will appreciate this point of view. She really explains things clearly.

 

https://hippocratichustle.com/2017/07/10/stephanie-pearson-md-disability-insurance/

[jz]

Thanks for sharing that ;  I listened to the entire interview.  The biggest impact message:  understand the definitions of "own occupation."

[Scott at MD Financial Services]

This happens all of the time.  That is why I often say to not be surprised that we often see claims where the the individual policies pays the benefit but the group or association plan may not...language in these policies really do matter!  Know what you have and don't treat these as a birthday present where you find out what you have when you finally open them at claim time.

[Scott at MD Financial Services]

Where I do agree with you on some issues, after 24 years in this business I have found when reviewing group policies that physicians send my way, many have things like:

1:  After 24 months, you will be required to do ANY gainful occupation based on education, training, OR experiences.  That word OR is powerful due to your high level of education. Your required gainful occupation could be pretty much anything and since you have the word OR in there you don't have to have had training or experiences to be qualified in the eyes of the insurance company.

2:  I also find that many contracts have language about the income stating that they cover your salary. Salary is typically part of ones income but not typically all the components of income. Group policies actually have a description of what part of the income is covered.  Some I have seen do not cover productivity, calls, bonuses and the such as an example.  The most extreme situation of this I have ever experienced was with a client who had an annual salary of $90,000 but his productivity as a Ortho Surgeon pushed his income over $1 million. He thought he had a great group plan from the employer of 66% to $32,500, but when you read the policy, it only covers salary and not productivity. That was an eye opener, for sure, when he realized his monthly benefit would be $4,950 taxable.

3:  Another issue I often see is where the employers don't opt for the benefits from other sources to be waived from benefit reductions.  Most carriers have offsets which simply state "if you receive $X from any one of these listed entities we get to offset your benefits dollar for dollar".  Most group plan options have the ability to not have that offset take affect, but it costs about 3-4% to the premium when you do that.

The reality is most of the time the group plan acquisition is put in the hands of an office manager or HR person who is told to find us a plan and we want $10k, $15k or whatever amount is desired and then like most things everyone sets out to get the lowest cost.  It is not really their fault since they have not been trained in what to look for.  The policy review/renewal is a once a year process/decision which they typically spend 15-20 minutes on, and without understanding it, most just default to the lowest price offering.  Most reviews I do, and I do about 4-5 per week, the physicians typically did not know they did not have a true own specialty definition.  Marketing can be tricky right?  Some plan documents state they have an "Own Occupation" definition which is 'A" preferred definition, not 'THE' preferred definition the disability benefit.  Unless you take pause at that moment one could certainly assume that is a true own occupation policy, even the largest Medical Association in the country pulls that one on its members.  Reduction for the offset provisions is also an interesting topic, when one finds out they have to apply AND appeal any denial from Social Security for the sole benefit of the insurance company since any money received by the insured or their family would allow the group plan to reduce its payment to the claimant dollar for dollar.  When we talk about the policy can be canceled, language modified to fit current claims loss, or rates be changed, that certainly causes a bit of concern as well.  What part of their income is actually covered at their main place of work and then any side work they might do, how would a disability affect the family?  Finally how a claim is processed, at some of the large institutions the insurance is sometimes held in-house as a self-insured plan for the most part which means the hospital is acting as the holding company.  Heck, there is even one hospital in Cleveland that to qualify for claims they have a peer review process.....you may not want your peers to be reviewing your medical situation to then also be the judge/jury on your claim capacity.

My point is simple, know what you have, know how it is going to behave at claim time and either get comfortable with that or do something that will make you comfortable.

[EDDOCMOM]

Thanks for listing this Miss Bonnie - I came on to post the link myself and glad I checked first!  This was a terrific podcast.