By Dave Serena, Insurance Agent
Having been a life insurance agent for 25 years, it’s been my distinct pleasure to work exclusively with physicians. I’ve learned many lessons along the way and, because of that, I think I may be in a unique position to share some insights about some of the milestones that lie ahead for young physicians.
With that in mind, in this four-part series I address some of the most common mistakes and opportunities for physicians who may be buying life insurance for the first time. Part 1 focused on buying the wrong amount of insurance, part 2 addressed buying the wrong insurance product and part 3 tackled the issue of underestimating life expectancy. In my experience, another one of the most common mistakes is…
Failing to review your contract
It might seem reasonable to expect that after going through the process of selecting an agent, assessing options and finally selecting (and paying for) a policy, you’re set for life. However, you would be mistaken!
It is important to review your contract regularly—especially after you experience what we in the insurance world refer to as a “life event.” A life event is anything that results in a lifestyle change, such as a birth, marriage (or divorce) or significant job change.
For example, two years after completing a residency program or fellowship is an opportune time to review your policy. We recommend reviewing your policy no later than that because you will be in a better financial position to consider more protection and coverage for your future. (Of course, that’s assuming you already have a policy. If not, don’t wait any longer!) A good rule of thumb is if you begin making more money, less money, or sharing your money with more people, it’s time to review your policy with your insurance agent.
In addition to changing your coverage after big life events, you also should consider reviewing your designated beneficiaries and contingent beneficiaries. A beneficiary is the person who will receive benefits should you pass away, and a contingent beneficiary is a person who will receive distributions if the designated primary beneficiary is unable to accept the proceeds.
Naming minor children as contingent beneficiaries may seem like a good idea, but when the time comes to distribute payment, issues can arise that tie up the money when it’s most needed. So if you plan to name minors as beneficiaries, you may want to discuss with an attorney other potential options, such as setting up a trust.
If you have questions about insurance coverage or life events, we encourage you to contact a Wisconsin Medical Society Insurance agent today.
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.