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There’s a lot of confusion and speculation behind pricing special disability coverage. You might feel so overwhelmed by the wave of information that you put it off until you really need it. By then, your rates have skyrocketed beyond repair. 

Preserving and protecting a career path starts with coverage that works with your wallet, not against it.

In this episode, I share the invisible expenses behind special disability rates and how you can design a plan for peace of mind. 

Highlights from this episode include:

  • The ‘ticking time-bomb’ that is making your disability rates more expensive each year. (1:10)

  • How to pay the lowest rate possible right now (even if you want to change career paths later on). (2:36)

  • Why most physicians get stuck paying premium prices and how you can protect your wallet (while paying discount rates). (4:24)

  • A common misconception about disability coverage that’s harming your health right now.  (6:13)

To ask questions on insurance coverage or to get a quote, please don’t hesitate to call us anytime at 704-270-2376, and I’d be glad to discuss your specific situation with you.


Read Full Transcript

Hi, I'm Billy Gwaltney and this is the CYA podcast. This show is for the physician who understands the importance of protecting everything you've worked so hard to achieve. Each week I'll bring you tips and advice to help you cut through the clutter and misinformation and show you exactly what you need to preserve your income and way of life. If you're ready to achieve the peace of mind that only financial security can bring.

Welcome to today's episode of the cover, your assets podcast. This is your host, Billy Gwaltney, and I am very happy to be with you today. Today, we're going to answer the question. What are the factors that determine my rate when it comes to a specialty disability coverage for physicians? And that's a great question. There's a lot of fault and speculation about how these rates are determined and how you go about getting the best rate for your situation.

(00:55): So we'll dig into that. And again, this is meant to provide an overview. We be happy to talk about your particular situation in more detail. I'll give you the, my contact info later. The first thing that determines your rate is your age. Bill younger. You are the less expensive. The coverage is the older you are, the more expensive it becomes. If you purchase it age 30, you will pay a lower rate for the life of the policy than if you purchase at age 32, the rate can typically go up anywhere from four to 5% per year. So if you purchase at age 31, your monthly rate for the life of the policy will be essentially 5% more than it would have been. If you purchased at age 30. The second thing that factors into your rate is your gender. If you are a male on average, your rate will be less than a female females.

(01:45): Statistically become disabled more frequently and stay disabled longer. Don't be mad at me, please. I didn't come up with that. I'm just the deliverer of the news. I think it's important to keep in mind that when it comes to life insurance, that's reversed. Females are going to outlive us males by a pretty wide margin and a lot of cases. And so females pay less for their life insurance. And so it does tend to come out in the wash over the long term. It's just that most trainees are a lot of trainees that we did that we talk with are just thinking about disability coverage before they're thinking about life insurance. And so they don't know that about life insurance, that it's, that it's going to kind of come out in the wash on the other end. But yes, females typically are more expensive. There are certain discounts that you can obtain, which I'll talk about here in a minute that could alleviate some of that gap.

(02:38): The other thing, the third thing that factors into the rate is the specialty that you're engaged in. And that specialty is important at the time of purchase. And that definition was important about this coverage. Again, if you do it correctly and you work with a broker that knows what they're doing, then that definition is going to be one that moves with you throughout your career. So if you're a resident in internal medicine and you obtain coverage, you're going to pay the lowest rate that a physician can get because internal medicine is and the best occupation classification, when it comes to disability coverage, at least with the top disability carriers, there are four of those. As we do this podcast today, they all classify internal medicine is in their best customer underwriting classification or occupation classification. I should say, if you then do a fellowship in cardiology, you will be covered for cardiology, but you will always pay the internal medicine rate.

(03:36): And so the definition moves with you to cover the more expensive occupation classification, but you will always pay the lower internal medicine rates. So that what matters at the time when it comes to your specialty is what it is at the time of purchase. The fourth factor in your coverage is the state that you live in. The disability rates are determined or priced based on the state. There are differences. California is more expensive than North Carolina. There are more expensive States. There are less expensive States. I'd be happy to talk about what those are for your situation, but the state does factor into what your rate would be. Your health also factors into the rates. Now, when I, when I work with clients and I provide a rate that they can expect to pay, that's a rate that if, if you're healthy ish, that will be your rate.

(04:27): Some people that have purchased life insurance, so familiar with where you can, you know, you can get a quote for the best rate, but then if your cholesterol is a little off, or if you're black, if your family history is not perfect, then they will ding your rate and make you pay more disability. Coverage is not really like that. If you're in a healthy ish category, then, then the rates, the rate, there could be a, a rating added. If you have a high BMI or someone is diabetic. I mean, there are certain chronic conditions that would cause the rate to be higher. If someone's had a history of seizures and they can exclude seizures, but they're going to cover that sometimes they'll, they can add 25% to the rate or 50% of the rate, but you would know that upfront. You would know that before you pay the policy.

(05:12): Hopefully again, if you're doing it right, you would know that before that first premium is paid. And the last thing that factors in the sixth item would be the training facility. Most discounts with the top insurance carriers are specific to the, to where you're in training. It is possible to be in training at a facility where they do not have a discount. Most facilities do have discounts. The larger ones generally do. There are certain discounts that are available for trainees and certain that are available to members of the AMA or association driven that are not tied to any one particular training institution or employer. Those association discounts are usually lower. The largest discounts in particular for trainees, I'm thinking about here are going to be driven based on a particular facility where you're employed. There are sex distinct discounts that are discounts off of a male or female rate.

(06:11): And then there are also, what's called a gender neutral or unisex discount, which I referenced earlier, which is where females can get a lower rate and essentially pay the same discounted rate. As a male. Those discounts are, are kind of hit or miss. As we sit here today, there are very few of those around, they're almost all gender specific and discounts off of that gender specific rate. What I would advise a female physician to remember is to not miss the forest for the trees. It's important to get coverage in place while you're healthy. It might cost a little bit more now, but over the course of your career, if other discounts become available, then you can consider pivoting to that less expensive coverage down the road. But in the meantime, you're covered. And that's really important because the disability, the chances of being disabled are not suspended, just because you decide to put on hold, buying coverage, your chance that you're just as exposed if you buy it or don't buy it.

(07:11): And so what I would encourage you not to do is say, well, I'm just going to wait to purchase coverage until there is a gender neutral discount available because that you could get that gender neutral discount at some point a year down the road or five years down the road. But if your health has changed, it's not gonna matter because you can't get the coverage. And so it's important to get it while you're healthy. An insurance company will always give you their best coverage at the time. You probably think you need it. The least, which is usually when you're at your healthiest, they'll give you whatever you want. And so it's important to get that coverage in place, even if it's more expensive now, and then down the road, if that same company comes out with a, with a gender neutral discount or another company comes out with one, this is not a mortgage.

(07:54): Your policy is not a mortgage where you can't change it. You can, you can always revisit it at that point and then look to see if that's a better fit for your situation. Oh, this has helped. I went through this quick because I value your time. I want to cover all these details, but I know you have a lot to do. And so I wanted to get this covered these, these handful of factors that go into the rate, I'd be happy to discuss your situation in more detail would love to do that and answer questions. My number is (704) 270-2376. Feel free to text me anytime to schedule something again, that (704) 270-2376 until next time, this is Billy Gwaltney. Thank you as always for your time. I'm grateful for that. And hope to speak with you soon.

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