By Andy G. Borgia, CLU and D.K. Unger
This year, thousands of residents and fellows are completing training and, as in the past, will be seeking to protect their medical careers in the event of disability. Covid has eliminated most in-person meetings, so residents/fellows are using the internet more than ever to obtain protection. Disability insurance is the most difficult type of insurance to secure but something all physicians should establish. Approximately 40% of all disability insurance applications result in either a declination or a policy modification.
Fortunately, Residents/Fellows at many training programs nationwide are eligible for disability coverage on a guaranteed approval basis. For example, DI 4 MDs has programs at UCSD, Rady’s Children’s and Scripps Hospitals in San Diego. The individual policies offered are the exact same specialty-specific own-occupation policies available on a non-guaranteed basis, with only some minor restrictions such as set monthly benefit amount, elimination period, and benefit period.
In addition, the policies are offered on a discounted gender-neutral basis. In 2024, this will be the only way to obtain gender neutral rates for females, which is extremely cost-effective. To protect against adverse selection, insurance companies with guaranteed approval programs usually limit representation of these policies to only one insurance agent or office per training institution. This creates a problem for the under-informed resident/fellow seeking to establish disability coverage with a pre-existing condition. The guaranteed approved policies are only guaranteed if you have NOT applied for disability insurance previously and been declined coverage or issued a policy with a modification.
Every year, hundreds of uninformed residents/fellows are ill-advised by agents who are either unaware or do not reveal that a guarantee program exists at their training hospital. As a result, numerous young physicians with pre-existing conditions are forced to go without coverage for what they need covered the most. We see a few in our programs each year that are now paying the penalty of acting on ill advice.
BEFORE ANY RESIDENT/FELLOW BEGINS THEIR RESEARCH FOR DISABILITY INSURANCE, FIND OUT IF YOUR HOSPITAL HAS A GUARANTEED APPROVAL PROGRAM! Do not rely on agents who are not authorized to offer such programs for advice; the risk is too great. With Covid limiting in-person and local insurance agent access to Hospital training programs, the likelihood of a resident/fellow being declined coverage, having to accept an exclusion rider for a pre-existing condition, or accepting a policy with limited provisions when a guaranteed policy is available to them has increased dramatically.
THE DISABILITY UNDERWRITING PROCESS
To elaborate, all physicians should protect their medical careers with adequate disability insurance. Most realize the advantages of this protection and take the advice of their colleagues by trying to establish coverage while they are young and presumably healthy. This usually occurs during training. As mentioned previously, this is when many learn a critical lesson about disability insurance underwriting.
Disability insurance underwriting is extensive. Underwriters will review your prescription history, driving record, avocations and will typically obtain and review your medical records. An issue in any one of these categories can pose a problem.
Disability insurance medical underwriting is not like the clinical medicine you are practicing. The insurance companies must group you together with similar risks, consider the risk that the condition(s) will impair your ability to practice your specialty, and consider the likelihood for future recurrence/relapse. They do not know who will have a problem in the future, only that someone or many will. This means that many conditions that you have recovered from can and probably will, particularly if within the last five years, be excluded from coverage or result in limited provisions or benefits.
For example, if you have had knee surgery, then that knee will be excluded from coverage. Remember that this type of policy modification occurs approximately 40% of the time with disability insurance applications. These policy modifications can be either the exclusion of a pre-existing medical condition either temporarily or permanently, reduction of the desired benefit period, removal of critical riders such as the Future Insurance Option, or, the worst-case scenario, a complete declination of coverage, depending on the medical history.
A common example is medication use or therapy for anxiety or depression. In that example, at best, a policy will not cover disabilities due to mental/nervous disorders and substance abuse (think conditions listed in the latest DSM, not dementia). If the diagnosis is recent and/or severe, it is more likely that you will be declined for coverage entirely.
Another example is a spine exclusion due to regular or even past chiropractor visits even without any underlying pathology. Another red flag for insurance companies is when you have been advised to complete a test/study that has not yet been completed. One common example of this is a sleep study. Another problem is having a colleague prescribe a medication for which there is no medical record and later is discovered on a script check. Insurance companies are naturally suspicious and wonder what else you are not revealing.
All the previously mentioned will cause a problem either at policy underwriting or at time of claim. This can all be avoided by taking the extra time to determine if your training program has a guaranteed approval disability insurance policy available. Ask your colleagues, especially those ahead of you, your professors, GME Coordinators, or experienced disability insurance agents.