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Disability Insurance: Group policy precluding adequate personal policy

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  • Disability Insurance: Group policy precluding adequate personal policy

    Hi all, I'm fairly new to WCI - fantastic website and community.

    I just finished training and am soon to start my first attending job - have a question about disability insurance:

    I am taking out an 'own occupation' disability policy with starting benefit of $7500/month + Future insurability option (FIO). My plans were to eventually ~double this coverage such that it would be commensurate with income.

    However, because of my employer's strong group disability policy (monthly benefit = 66% of income), I've been informed that I likely won't qualify to increase my personal disability benefit (despite FIO). This concerns me because the group policy is only 'own occupation' for a period of 24 months, at which point it converts to more of an 'any occupation' type policy. And thus, I wonder if I would be relatively under-insured.

    Is this a common issue that others have run into? Any suggestions/strategies for how to deal with this?

    Thanks in advance for suggestions!

  • #2
    You are finding yourself in an all to common situation where you accepted a job, get benefits but the design of the benefits are not great for a physician but rather kind of spot on for administration (guess which person decided on the plan to buy...).  Unless you do something different like the following you are kind of stuck:

    1:  Earn well in excess of their cap

    2:  Find a side hustle and buy coverage on that income

    3:  Determine in the group policy that it only covers wages and your income is predominately production, shift or call (every carrier determines this differently) which would not be covered and buy coverage on that uninsured income.

    4:  Get the group to go to a voluntary participation plan

    5:  Opt to become a business relationship with services rendered vs. a W-2 employee

    Really pay attention to the FIO on your policy and if you are paying for it or is it included since you probably don't want to be paying for something that you can't exercise and use.

    Let me know if we can help further.
    Scott Nelson-Archer, CLU, ChFC
    303-953-0263 Direct / [email protected]

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    • #3
      I'm in a similar situation. I just started my first "real" job, but I have not yet enrolled in my benefits yet. My group has an LTD policy available, paid for by the physician in either pre- or post-tax dollars (their choice). It is own-occ for a period of 2 years only as well. I'm not sure if I understood the benefits person correctly or not (have to get back in touch with her to get the full details), but it sounded as if it was not mandatory to enroll in the group LTD plan. If one could elect not to enroll in a group LTD policy would increase my chances of getting better coverage options with an individual disability policy, or is it the situation where I am simply "eligible" for this group LTD policy that an individual disability provider would determine that I am not able to purchase more coverage? I hope that makes sense...

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      • #4
        I have heard that disability insurance from an employer is a benefit and can be cx at anytime, even if one has applied for and is receiving the benefit.  Does anyone know if that is correct?

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        • #5
          I guess I'm more curious about the situation where one is "eligible" to purchase a group disability policy rather than if they have actually purchased one already. Let's say I opt out of my group policy... Would an individual disability carrier look at me similar to a resident/fellow in the sense that I have not purchased any disability insurance or is it different since my group has a policy that I can purchase if I want it? Thanks

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