This is part two in a series on disability insurance. If you missed part one, go back and read it here first.
At 4 am the other day I found myself climbing up Mt. Hood, outside Portland, Oregon. My world was reduced to the area illuminated by my headlamp as I carefully worked my way up the mountain, digging my ice axe into the snow and ice for security and carefully placing my feet, now covered with stiff mountaineering boots and twelve 2-inch spikes called crampons, to ensure I didn't slide off the mountain.
As dawn rose, along with the temperature and my spirits, I recalled that my disability insurance doesn't cover this activity, so I ought to be extra careful. Perhaps that was why I found myself carrying far more safety gear than anyone else I saw on the mountain that day. A 50 meter rope, several 2 foot spikes to attach the rope to the mountain, a harness, a helmet, an avalanche transceiver, ascenders to climb out of a crevasse if necessary, and enough slings, carabiners, pulleys, and first aid gear to rescue not only my partner and me, but also anyone else who got into trouble on the mountain that day. Overkill? Probably. But far cheaper than the alternative-losing my ability to make money.
Risky Hobbies = Bad
Insurers don't like to insure people who engage in risky hobbies. Unfortunately, my hobby is one that makes the standard list of risky hobbies. Others include SCUBA diving, flying airplanes, and parachuting. This really irks me since it leaves out a lot of things that I feel are more risky than my particular bad habits. Bungee jumping? Apparently okay. Skiing? No problem there. Never mind that I know skiers who go down chutes I wouldn't climb up no matter how much safety gear I had on and I know several backcountry skiers who have been partially buried in avalanches. 4-wheelers? Despite all the ATV injuries I see in the emergency department, that's apparently okay with all the actuaries at the insurance companies. Mountain biking, cycling on busy city streets, bow-hunting grizzly bears- all okay.
Honesty is the Best Policy?
So when I applied for insurance as a resident, I was honest and admitted that I occasionally climb. A follow-up questionnaire clarified how often I climb, how far I travel to do it, what safety gear I use, and what types of climbing I do. The end result? My life insurance was three times as expensive as it otherwise would be and my disability insurance carried a rider that says it won't pay if I become disabled while climbing. Although I was able to obtain cheaper life insurance in later years when I wasn't climbing much, I still have the same disability policy and it is unlikely that with or without blatantly lying that I will ever have one that covers climbing injuries.
There are three morals to this story. First, be careful what you tell an insurance company. The best time to apply is when you haven't done any “risky activities” for a year or two. Perhaps a busy period at work such as residency or fellowship. Second, get insurance BEFORE taking up a new dangerous hobby. If you're thinking about becoming a private pilot or going skydiving, update your life and disability insurance policies 3-6 months before you make any firm plans. Last, if I have an accident climbing and it looks like I'm probably going to be disabled the rest of my life, you better push me off the mountain and finish me off.
Other Excluded Stuff
There are other things that disability policies don't cover. Here's a partial list:
- War or act of war (with our current War on Terror, this could probably be interpreted pretty broadly)
- Active Military Duty (having served, this is pretty stupid since 95%+ of our military folks are never in any kind of serious danger of being hurt by a combatant)
- Normal Pregnancy (don't want to work because you're 8 months pregnant? Don't bother trying to get disability benefits for that)
- Foreign Travel (varies by policy, but many don't cover you during that European vacation, must less that humanitarian trip to Sudan-read the fine print)
- Mental/Nervous Disorder (many companies limit benefits to two years, where they might pay for “physical” disorders until you're 65 years old)
- Medical Exclusions (any medical conditions you have at the time the policy is issued will likely be excluded, meaning if you have heart disease at the time of issuance, and it leads to you being disabled 5 years later, the policy isn't going to pay. Again, apply when you are young and healthy and/or when you haven't had medical problems for several years to minimize this.)
Next time we'll discuss the importance of how your disability insurance contract defines disability. Read part 3 of this series here (or go back and read part 1 here)
What do you think? Do you have any exclusions on your insurance? Did you have to pay extra because of your hobbies? Comment below!
What’s your opinion on being completely honest regarding risky activities. For example, the policy I’m looking at excludes “mountaineering,” but says nothing of rock climbing (as a climber, I’m sure you appreciate the difference). Since I do a lot of rock climbing (and very little mountaineering), I would love to insure myself against a climbing-related injury. Do you think it’s best to ask the company about a climbing rider (and pay significantly more $$) or avoid the issue and hope that in the event of a climbing-related injury, I can stand on my assertion that they only excluded “mountaineering” and not rock climbing?
I can tell you that whatever you tell them you currently do will be excluded via a rider. Perhaps wait until you haven’t climbed in a while and don’t have any plans in the near future to climb to get more insurance. Either that, or take advantage of inferior group policies that don’t ask these questions.
I too am a climber. However in residency I’ve done very little of it outside of a gym.
How does waiting till I haven’t climbed/kayaked/piloted airplanes affect my ability to get a competitive disability plan? If I stop climbing all together, purchase a policy, then start climbing again when I get more free time – would that not be considered insurance fraud?
If I were in a climbing accident could they not state that it is a ‘standard high risk activity which we clearly asked you about when purchasing your policy’ and then as a result deny payment? I would hate to pay thousands for a policy when in the end they would deny me coverage.
Another example…what if 5 years into being an attending I learn to fly a plane? Will I need to tell my insurance company of this new activity? If I were to suffer an injury would they deny claim again because it’s a high risk activity that I was directly asked about?
Lastly, do group disability plans deny coverage or charge more because of ‘high risk activities’
Thanks again for all your help. I enjoy your site.
There is a statute of limitations on denying payments, two years I believe.
They do not restrict future activities, only current activities. How you define “current” is the key, of course. It’s pretty hard to say you’re a climber if you haven’t been climbing for two years and don’t have any trips planned in the next few months. Perhaps one of the agents can weigh in, but I believe they go back about a year and forward about planned activities for about 3 months. At a certain period in my life, I hadn’t climbed in that long so it was reasonable to describe myself as a non-climber. I swapped out life insurance policies at that point. However, I haven’t been able to do the same for the rider on my disability insurance. They figure if I don’t climb any more what’s the big deal if I have that rider on there?
Are there any companies that will sell a policy to Active Duty physicians?
I’m going to leave this one for the agents who frequent the blog. However, if you can, it’s almost surely going to have a “war exclusion” on it and you may only be able to get it if you are separating soon. When I went active duty, Standard told me the policy I owned prior to doing so would cover me if I was disabled while on active duty. I never had to test that out, and some agents I’ve mentioned that to were pretty skeptical they would have actually paid (so I might have wasted 4 years of premiums.) This is an excellent question for an independent disability insurance agent, so hopefully one of them will be along with current information soon.
This post is obviously from earlier in the year, but could become useful for someone else in the future. There are very limited options out there when it comes to active-duty physicians. In fact, MassMutual was the only carrier offering it the last time that I checked, and it was highly restrictive in regard to the benefit amount offered. If you are not yet active duty however and have not received call-up orders, there may be some options.
WCI – The person who told you this was likely correct, as long as you purchased the policy prior to receiving call-up orders. It does sound very sketchy, but I’ve had this situation come up with clients and I even received confirmation from the carrier in writing. Acts of war will, almost definitely be excluded, but if you are involved in a car accident (that is not related to an act of war) while driving to work or develop a debilitating illness (that is not contributed to by an act of war), you would likely be covered.
Hi Michael,
My husband and I are in the process of purchasing, and have it narrowed down to the Standard and Ameritas – they’re identical, except for the fact that Ameritas requires us to suspend payments during the next four years of active duty, after which they initiate our policy using the rates determined today (big savings!). The Standard does not allow us to suspend, requiring us to pay the premiums over the next four years. Neither policy pays for disability due to act of war. Which company would you say is the wiser choice? (We are assuming his greatest risk of disability is during deployments, which isn’t covered regardless, and it would be nice to save those four years of premiums). Thanks for your help!
It sounds like Ameritas doesn’t cover you for the next four years and Standard does, no? If so, then I’d take Standard. There are plenty of ways to get disabled that aren’t acts of war.
Correct – The Standard will cover unless he gets disabled during deployment. Our gut is to go with Standard…sounds like most people agree with this.
Even if he gets disabled during deployment but it isn’t due to an act of war it should cover, no? Remember that most deployments for doctors are very safe.
Yes, it should. We just weren’t sure how technical they got with that situation/how hard they make it to prove that his disability wasn’t due to an act of war, even though he was deployed in that case. We might be over-thinking it. 🙂 Thanks for all your help!
Do you have any insights on how foreign travel is viewed by disability companies when obtaining a policy? For instance being asked if you have travelled in the past or have any upcoming travel plans? I have been to africa and asia in the past (non-hot spot areas), and have been formulating future travel plans to India with no ticket purchases or solid itineraries as of yet. Would it be prudent to reveal this information in detail?
How about risky activities that were a one time thing, such a skydiving? Or perhaps a one off visit to a massage therapist bundled with a chiropractic visit? Is there any room for explanations with respect to those activities so that you wouldn’t become excluded on these issues for these once off occurences?
I wouldn’t mention either of those. It’s really about what you have done recently and what you plan to do in the next few months.
I just found out that my employer actually offers long-term disability insurance. I didn’t even realize that. If I send you the insurance document, could you look it over and tell me if you think it is good enough? I read through it and it appears that I would get $10k per month if disabled for 6 months.
Trying to do this the right way and cover all the bases.
Although the benefit amount is certainly an important factor, contractual provisions like the definition of total disability, are really where you should be focusing your attention. I’d be happy to review the information you have, and provide a second opinion if you’d like.
I want to thank Michael for his time reviewing documents and talent at clear communication. Thumbs up!
I had a brain haemorrhage in October 2014, when I was employed by a hospital. Luckily there was good disability coverage and I was out for 5 months. During that time I found a better job employed by a private practice. I was told that I cannot apply for is ability insurance for 1 year (policy of company, not personal) so I am looking for a policy for the year.
Will my pre-existing condition(s) prevent me from getting ANY disability insurance? Or I pay premiums and then have no coverage if I have another event? Be destitute?
What do people do in this situation? Thank you.
You may be able to get disability insurance that excludes brain hemorrhages. See a good independent agent to help you shop it out.
So as a 4th year medical student soon going on active duty for residency, would it be pointless to purchase disability insurance if they don’t cover active duty military? Or would I be covered if I sign up now while I’m technically in the reserves before going active?
One of the Big Six insurers (Standard) should be able to offer you a policy so long as you still haven’t received call up orders. The policy would exclude any disability contributed to by an act of war, but would cover any non-war/duty related claims (for example: getting in a car accident while driving to the grocery store for family groceries).
Thank you for your post! This tutorial is fabulous! Lots of great info including, Disability Insurance provides security for individuals if you are unable to work because of sickness or accidents. Preparing for a disability means that you you have to buy disability insurance to protect the loss of income.
Is there a list of the high risk activities that will be flagged by disability insurance companies?
Skydiving, climbing/mountaineering, SCUBA diving, and being a pilot.
If I’ve been diagnosed with Diabetes in the past but have since turned my health around and have perfect A1C levels, how would you suggest I handle getting insurance? Wait a certain amount of time? Will this be excluded anyway? I guess this same question applies to life and disability. Thank you!!
I would have an independent agent bounce it informally off the underwriters at a few insurance companies before you formally apply.
How overarching or encompassing are medical exclusions / preexisting conditions for disability insurance?
To use my situation as an example: I had a chronic L4-L5 disc herniation and recently underwent microdiscectomy for symptomatic pain relief (never experienced neurological deficits) which was successful. Luckily I had a stretch of 5 days off between when one rotation ended and another started so I never used any sick leave/vacation for the surgery/recovery.
I had a disability insurance sales agent who basically stated that any future disabling injuries/problems to my back would not be covered under most disability insurance plans due to my “preexisting” condition. This sales agent is trying to sell a continuation of the disability insurance coverage that I had as a resident which not exclude any back injuries. Comparing the pricing of the agent’s offer to AMA disability insurance online seems like there is a significant premium for the one that the agent is selling.
Thank you!
I think I’d go with the agent’s recommendation, but you’re not really specific on what that is exactly. This post may help:
https://www.whitecoatinvestor.com/should-i-purchase-life-or-disability-insurance-from-professional-societies/
Why not get a second opinion from one of my recommended agents?
https://www.whitecoatinvestor.com/websites-2/insurance/
Like the comments from Mark, I am also interested in finding out about the medical exclusions / preexisting conditions for disability insurance.
I’m currently 36yrs old without any health issues and regularly exercise. Occasionally (once a month) I have a mild backache for which I take OTC NSAIDs. Almost a month ago the backache acted up and I had to take a sick day. I have never been to a doctor/urgent care/ER for this but I had a prescription of Medrol dosepak and flexeril called in. Subsequently I did see a physical therapist for one visit (out of pocket – not via my insurance). Pain completely resolved. Now if I apply for disability insurance, will they consider all problems related to back pain as pre-existing and not cover them? Do I have to mention this or just leave it out as I never went to see the doctor?
The best thing to do is have an independent agent “shop this around” informally without applying to see how the various companies would treat it.
Thanks!
I find it interesting that most DI companies have being a pilot as a high risk exclusion but not being a driver. Aren’t you more likely to die/become disable as a driver than you are as a pilot?
I’m 38, otherwise healthy, had normal 3 vaginal deliveries, latest one 2 months ago. 1 month before finding out that I was pregnant with my last pregnancy, I found out through urgent care visit CT scan that I have a dermis cyst. Post delivery ultrasound still shows a dermis cyst in left ovary and I gym recommended removing dermoid cyst as well as Fallopian tubes for contraception. I’m thinking of getting a new Long term disability insurance on my own ( in addition to the one provided by my work as a group policy ie 60%of monthly earnings )
My question and concern is, should I tell the insurance company about my dermoid cyst during the medical interview? Will they find out? It’s benign and painless. Do I need to disclose its presence during medical questioning or on application forms?
Next question is is it better for me to apply for LTDI after having laparoscopic surgery done to remove the dermoid cyst?
Which option will get me lower premiums? Before surgery with fermium cyst present? Or after surgery when cyst is removed? Is this cyst a reason for medical exclusion for “pre-existing condition”?
Please advise. Thank you
I think you’re obligated to disclose the cyst if it is an ongoing issue- i.e. you’re going to remove it.
Personally I’d look into what you can get now, but this is a question for an independent agent to help you with. They can shop you around informally. Here’s a list of the ones I recommend:
https://www.whitecoatinvestor.com/websites-2/insurance/
I have a question about medical exclusions. If I am treated for high blood pressure or high cholesterol, would this exclude me from coverage if I am disabled from something like a heart attack or stroke?
Not unless the policy specifically states that. What is more likely is you’ll either pay more for DI insurance or you won’t be able to get it at all. Something like a back injury is usually specifically excluded but I don’t think they’d give a diabetic a policy that excluded amputations, blindness, renal failure, stroke, and heart attack. They just wouldn’t issue the policy.
Gotcha. I guess I was confused after reading: “if you have heart disease at the time of issuance, and it leads to you being disabled 5 years later, the policy isn’t going to pay”. How does the insurance company define “heart disease” and how do they know if this is the actual reason you become disabled 5 years later? This seems gray.
I think it varies by company so you’d just have to have your agent run your particular situation by an underwriter. Honestly, if you have significant heart disease I doubt they’ll insure you at all.
I know a number of physicians who have been flat out refused Disability Insurance on account of depression, nothing said about any two year limitation. Even when depression is an exclusion. It is well known that physicians are more likely than most others to successfully complete suicide, without causing “residual” disability. This is blatant discrimination, but these are private companies so none of the laws against discrimination apply. But it adds to the many reasons that physicians are reluctant to seek treatment for mental health conditions.
Is it illegal to discriminate against someone for a medical condition when selling insurance? First I’ve heard of it. Those laws aren’t somehow different for companies, individuals, or government entities.
Heck, they can even discriminate based on gender and age!