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How to choose the right policy for you

By Kathryn Mueller, CLU, ChFC, FIC, LUTCF, Insurance Advisor

When choosing a disability insurance policy, it is essential to first determine what you want and need in terms of future coverage. Here are a few considerations to take into account when meeting with your agent to pick a policy.

What is your definition of disability?
Whether or not you are able to work may depend on your specialty and your type of disability. For example, if you are a surgeon and break your hand, you cannot operate. If you can’t operate, a disability insurance policy potentially would pay benefits even though you may be able to practice outside of your specialty.

Are there residual benefits (also called partial disability)?
Many physicians who are not totally disabled want to continue practicing after an injury. If this is the case and you can still perform some of your job duties within your specialty (or can only work part-time), a residual rider can be used to pay for a percentage of income lost. This enables the physician to stay active in his or her practice and also receive some benefits from their disability insurance policy.

A residual rider also will provide financial support if you have recovered from the disability and are back to work full time, but your income has not recovered.

Is the policy non-cancelable?
Confirm with your agent cancellation policies throughout the contract and whether and under what circumstances premiums are subject to change. If you purchase a non-cancelable policy, the insurance company cannot cancel your policy (except for non-payment), or change or increase the premium.

What does your health look like now? What about in 10 years?
This is a very important consideration for students, residents and fellows. Even though your income is likely to increase, by purchasing a disability insurance policy now you are locking in rates and premiums you may not be able to get in the future if your health changes or the policy needs further medical underwriting.

Are there any limitations?
Some contracts have a 24-month limitation of benefits received for mental/nervous conditions, as well as the amount of time they will pay for soft tissue injuries. This means, depending on your contract, you would only be eligible to receive disability insurance benefits for 24 months from diagnosis. Ideally, you will want a policy with minimal limitations to get the maximum amount coverage.

What happens if you don’t qualify for individual disability coverage?
If you have group coverage in place through your employer or program, often you can convert that to individual disability insurance coverage. However, it may not be as strong and can come with a higher cost.

If you are joining a group or health system, they may offer group coverage. Some companies will offer additional coverage with simplified underwriting, which means there is no exam. This may cost a little more than individual coverage.

Another option is to purchase a guaranteed issue policy. However, these often have a five-year benefit period and can be more expensive, depending on the medical condition that precluded you from obtaining individual disability coverage.

What’s next?
The process of applying for coverage can be confusing. From the application itself to the underwriting process, you may have a lot of questions. Give us a call any time at 866.442.3810, e-mail insurance@wismed.org, or submit a question online to speak with one of our agents. They can answer any questions you may have about the disability insurance application process or coverage needs.

The views and opinions expressed in this blog are solely those of the author and do not necessarily represent the views of the Wisconsin Medical Society, Wisconsin Medial Society Holdings Corporation or its subsidiaries. Nothing in this blog should be construed as legal, financial or clinical advice.

Kathy Mueller, CLU, ChFC, FIC, LUTCF

Insurance Agent
Kathy has been in the insurance industry since 1982 and an insurance advisor with Wisconsin Medical Society Insurance and Financial Services since 1995. In addition to the Chartered Life Underwriter (CLU) and Chartered Financial Consultant (ChFC) designations, Kathy earned from the American College of Finance, she holds the Fraternal Insurance Counselor and Life Underwriter Training Council Fellow designations. She is a graduate of Gateway Technical College and earned a Bachelor of Science degree in management from Cardinal Stritch University.

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