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Your disability insurance policy may include a Future Insurability Option. With an FIO, you can increase your coverage without an updated medical review.

This allows you to increase coverage throughout your career.

But what if you don't take this option, or you let it lapse? When you find yourself in need of more insurance, it can be costly — or outright denied.

Don't leave your future disability insurance up to chance.

Listen now to discover how to keep your future insurance options flexible.

  • Why getting an inexpensive FIO early in your career can save you thousands of dollars (1:00)
  • How to get the most from your FIO before you reach your insurance company's age limit (1:50)
  • Why getting an early medical screening may limit your Future Insurability Options (and what to do when that happens) (2:33)
  • Red flags that an insurance provider might not honor your original FIO (4:09)
  • Why getting an FIO is most important when you're on a tight budget (5:55)

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 let's get started.

(00:28): Welcome to today's episode of the cover, your assets podcast. This is your host, Billy Gwaltney, and as always, I'm thrilled to be with you today. Today, we're going to talk about the future in share-ability option or FIO as the acronym is called in working with physicians across the country and helping them set up their specialty disability coverage, whenever possible, we include this future insureability option and what this is, is what most insurance companies call the rider that can be included on your policy that allows you to increase coverage as your income increases throughout your career. Usually we work with physicians, start working with them when they're in training residency or fellowship. And let's say the policy starts out at 5,000 a month, which is a common starting point with the top companies. They can include the ability to increase the coverage in the future without having to revisit the medical screening upfront.

(01:29): And that's a valuable asset. So you can go from 5,000 depending on the company up to perhaps 20,000 a month. And you would not have to start from scratch to do that. Usually there's, this rider allows you to increase as much as needed. So you could go from five all the way to 20,000 or anywhere in between. They'll let you do the, as much as you need at any one point until you get to the age of 40 or 45 or 50, it just depends. Each company sets their own specifics. As far as the maximum age that you can be to increase coverage or to exercise the option. And sometimes they'll put limits on how much you can exercise once you get over 40, for example. So you'd want to know the specifics of your particular contract upfront. What's important about the rider, as I mentioned earlier, is that the medical screening you go through initially, hopefully you just do that once.

(02:26): And when you go to exercise the option in the future, your health status at that particular time would not factor in that's important. Now this is not always possible. Medical history can impact someone's ability to have this rider included in their contract. Sometimes insurance companies can offer a policy, but due to the medical history at that particular point they're not able to include the future insureability option on the policy. And if this occurs, obviously it's still advisable to strongly consider the coverage, even without this rider on it, because the definitions and the discounts are significant for any amount of coverage you have in place. But just mentioning because there can be situations where the future insureability option is not able to be on the policy. Sometimes that can be revisited in the future as, as someone's medical situation stabilizes, but we certainly push with these top companies to, to get that rider included, if at all, all possible what's important about having it also is that the discount that you have in place, hopefully you have in place at the time you purchased your policy that day, this count would be included on any increases.

(03:37): So if you secure a trainee discount, for example, when you go to increase coverage, you would have access to the trainee discounted rate for that increase, even though you're an attending, once you do the increase. And so that can save you significant money on the premium, especially over the longterm. Essentially there's a linear relationship between the coverage increase and the cost increase, you know, rule of thumb is if you go, if you triple your coverage, you're going to triple the rate, which is important. Now, be careful, not all even inside the, the top true specialty company, but he's, they don't all guarantee that the future insureability option when you go to increase coverage through that option, that the same definitions and the same rate structure will be in place that you have in place at the time you originally started the policy. So what that means is that the terms can change.

(04:28): If you start out with a true specialty contract at a certain rate structure, when you go to increase, say five years down the road, the discount would be included. But if the insurance company is only offering policies with a modified own occupation definition, a watered down version, or if their rate structure has changed and maybe they've increased their rates, then you would be subject to whatever those new terms are. That's not always the case, but there there's one company in particular, I don't want to. But because this, hopefully this podcast can be used, right? Anytime, but the point being that, just read the fine print to make sure that when you include a future insureability option on your policy, that you know what you're getting, it's okay to have it where it can potentially change if you're okay with that, obviously, but a lot of folks are not.

(05:21): They want to make sure that they know what the definition is going to be. They want to make sure they know what the rate structure is going to be. And it would be an adjustment for the age, at the time that they do the increase, of course. So, you know, 5,000 a month of coverage for, for a 38 year old is going to cost more than it does for a 28 year old, obviously, but you don't want any other moving parts typically. And so you just want to make sure those details typically for the future insureability option, it says separate rider to the policy that has a small fee associated with it. That is absolutely worth it. So at the time when you're in training, perhaps, and you're securing coverage, budgets are very tight and you would not want to skimp on your disability policy and save you know, in order to save eight or $9 a month and not have this future insurability option on your policy is very valuable to have it for the reasons I've already mentioned.

(06:16): Of course it it's your money, not mine. And I recognize that, but just a word to the wise, as you consider the options. And I say that because we've had real life situations where people have gone to increase coverage and for whatever reason, their base policy, original policy did not have the future insureability option, perhaps because of their medical history or perhaps for some other reason, I don't know what it would be off the top of my head, but we have had situations where people can't automatically increase because their health has changed. And I'm thinking one particular situation where the client asks for the rider to be removed and it was removed. The future insureability option was removed from their policy. And then they ended up in a situation where their employer didn't provide coverage and they needed more coverage and they didn't have the option.

(07:03): And so they had to start from scratch and, and we started the underwriting and the underwriter would not approve them for the additional coverage. So it's just not a given that we're going to stay as healthy, you know, in the future as we are currently when we get the coverage, hopefully. And so just want to mention that as something to consider again, really the only reason to not have this rider on your policy would be, have some type of medical history related situation precluded you from being able to get it. If an insurance company is willing to offer you the future insureability option on your specialty disability policy, it's highly advisable to put it on there because that'll, that'll be something that'll be worth it in the future. For sure. Hope you found this helpful, just a quick overview. I would be happy to discuss your situation in more detail. Anytime. My number is 7 0 4 2 7 0 2 3 7 6. Again, that's 7 0 4 2 7 0 2 3 7 6. I'd be happy to chat with you until we meet again. This is Billy Gwaltney. Thank you as always for your time.

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