Disability insurance discounts are driving me nuts. For years I have been telling physicians shopping for disability insurance to find a competent, responsive, independent disability insurance agent, have them lay out your options for an individual disability insurance policy from the Big 5-6 companies, help you compare them to any group policies you may be eligible for as far as features and pricing, and then make a decision.

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With that strategy, you only need one expert insurance agent and you’re good to go. It was an easy thing to tell doctors to do and sounded easy for them so they would actually go and do it. Unfortunately, that may not necessarily be the best strategy, which is going to create a lot more work for my readers and my advertisers. The reason why is discounts.

In today’s post, I asked for information about discounts from the ten agents I have on my recommended listing page. Seven of them were comfortable with me sharing their answers with you. Any time you reach out to multiple people about a subject, the post is going to be long, but usually worth it because of the multiple perspectives available. Let’s get started.

What Disability Insurance Discounts Are Available For Doctors?

What do I mean by discounts? Well, the usual discounts available are as follows:

Unisex Discounts

Unlike life insurance, where it costs more to be male than female, in disability insurance it costs more to be female than male. So if an agent can sell a woman a unisex policy instead of a gender-specific policy, that “discount” can be worth 15-30% off. Bob Bhayani said this about unisex rates:

Discounts vary from company to company; they can range from 10% to 30% on gender distinct rates and nowadays, in few cases, unisex rates. Due to a gender shift in the medical population, insurance companies are guarding against adverse selection by eliminating unisex rates. There are only two companies (Principal and MassMutual) that I know of that offer unisex rates tied to employer affiliation.

Trainee Discounts

Sometimes a student, resident, or fellow is eligible for a discounted price compared to an attending of the same age and health status. This may be because the resident is considered a different specialty than the attending. However, Rick Warren warns this discount is far from universal and frequent confused:

I do see that there is a wide variety of information out there, specifically concerning residents/fellows, that has led to some confusion.  There is a growing perception that if someone is a resident/fellow then they automatically are given a discount by most/every carrier.  This is not the case unfortunately.  Again, we reflect on the structure of how discount programs are set up by the carrier and it is based on the facility/program rather than someone being a resident.  Residents/fellows do enjoy some perks during the underwriting process by virtue of being in training; most carriers waive the exam requirement, all carriers waive the financial documentation requirement, all carriers will go to a $5,000 monthly benefit for a resident (which significantly exceeds the “insurable income” at the time of a resident’s application).  However, I get the feel that the discount element has gotten rolled into that “special programs for residents” discussion.

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Institution Discounts

There are two types of these — Multi-Life and Guaranteed Standard Issue policies.

Multi-Life

If three or more docs apply for disability insurance, a discount is often available. Those doctors don’t even have to know each other or apply at the same time. For example, if they all work at the same hospital and apply over the course of six months through the same agent, they could all get a 5-10% discount on their policies. The tricky part about this discount is that it is agent-specific. The more policies an agent has done for people at your institution, the more likely they are to be able to offer you this discount.

Guaranteed Standard Issue

Thought the multi-life discount made things complicated? It’s even worse if a Guaranteed Standard Issue (GSI) policy is right for you. GSI insurance is typically for those with health issues that will keep people from being able to get a standard policy. It’s a bit like a group policy purchased by an employer that way, but it’s still a portable individual policy. The problem is these aren’t available at all institutions from every company and from every agent. In fact, when they are available at all, they’re usually available only through one company and one agent.

Association Discounts

These discounts are available through an association you belong to. The main one in this category is from Ohio National through the AMA and is basically a 10% discount for any MD/DO.

What Is The Deal With Disability Insurance Discounts?

I asked agents why companies offer disability insurance discounts to some applicants but not others. This is what they told me.

The discounts are made based on the volume of clients and claims history with a given carrier. They will each cater to specific physicians at different times. — Stephanie Pearson

Discounts offered by insurance companies are tightly regulated, filed and approved for by state insurance departments. Insurance companies regulate discounting in order not to undercut their cost from an actuarial and claims perspective. Most Insurance companies offer discounts to a segment of physicians they want to attract. For example, Ameritas not only offers a Residency discount but also an additional preferred occupation discount to dermatologists, radiologists, internists, neurologists, oncologists and more.  — Bob Bhayani

They typically offer discounts in certain market segments to be more competitive with other carriers or to potentially increase market share.  — Larry Keller

We haven’t found that discounts are applied on a client-specific basis.  Generally speaking, the discounts that a carrier will offer are attached to the facility/hospital/GME Program.  There are some for business owners, etc. as well but those don’t often apply to med school through early attending, more for those that are now practice owners. If the applicant is part of that greater body then they should be offered the discount. — Rick Warren

Discounts are filed with the states and have to abide by certain stipulations.  Some are a little fuzzy so they can bend them, but for the most part, the criteria to receive discounts on DI are pretty much set in stone.  Since most of the discounts are filed based on volume coming from one place, called multi-life discounts in the insurance world, the insurance company has to have an employer, association, or training institution for the basis of a discount.  So, if a doctor in the same specialty and same age and health history apply for a policy but they are at different employers or training institutions, one may have access to a better discount or one may not have any discounts available at all. — Matt Wiggins

It depends on the company’s experience with different groups. Sometimes companies will offer discounts and when they have too much business from one demographic, they will pull back and discontinue the discount. — Jamie Fleischner

It is all about balancing their book of business, they don’t want too many doctors, too many of one gender, too many of one specialty, or too many from one state.  An example right now is that general dentistry is having an unusual uptick in claims so virtually all carriers are decreasing their occupational class which in turn increases their premium on new incoming clients and discounts are being removed or reduced from their occupational classification. — Scott Nelson-Archer

I believe that insurance companies offer discounts with the intent of helping agents market their specific product more frequently and easily. Although insurance companies need to charge reasonable amounts for the insurance they offer, there is also an interest in growing the insurance pool and the hope is that offering discounts will help accomplish that goal. — Michael Relvas

I then asked the agents why some agents are allowed to offer discounts and others are not.

Sometimes discounts are based on the volume of business an agent writes, sometimes they are based on facility relationships that a rep might have, or other times they are based on an association that a rep might have a relationship. The client may join the association to obtain the discount (or may even already be a member.).  — Scott Nelson-Archer

Insurance companies prefer to offer discounts to certain brokers based on the strength of their relationship, expertise and volume that a particular broker may offer. By doing this they limit the risk simultaneously. For example, an Insurance company would not be incentivizedtooffer discounts to agents who are subsidized by insurance companies as they are obliged to sell the company products anyway. They also may not choose to offer discounts to brokers who only represent a small number of physicians versus someone who specializes in only working with physicians. — Bob Bhayani

Discounts on disability insurance policies are nothing new. Some discounts are very old and are grandfathered and/or “exclusive” due to relationships that specific agents or agencies have with associations or academic institutions.  — Larry Keller

All agents and brokers can obtain discounts for their clients. This requires the agent to sell policies to multiple people (usually 3 or more) from one employer. Newer agents and less experienced agents typically don’t pursue this. Some companies also allow a select few brokers to offer association discounts as they want to provide a benefit to their top people or people they know who will write quality business. — Jamie Fleischner

Insurance companies reward volume.  Agents who sell more policies to doctors from a single employer or institution may be able to offer better discounts to doctors from the employer or institution based on their history of volume.  Agents who have a large volume in general from selling to doctors nationwide may be able to offer discounts to doctors from any employer or institution.  However, insurance companies almost never give special discounts to agents that are not able to be obtained by other agents.  So, if one agent can get a discount that another one can’t, it’s going to be mostly based on the one agent simply having sold more policies through the years at the specific employer/institution or in general to the masses.  Also, aside from price, some agents get other preferential treatment for their clients based on the experience of the insurance company with the agent. — Matt Wiggins

There are some agents who focus mostly on marketing their services in select hospitals or to select organizations. Allowing an agent who is heavily marketing their services to one organization to offer a discount helps them to sell that insurance company’s product more frequently and easily. — Michael Relvas

First, agents can have discount programs that are closed; they are the only agents that are allowed to write that discount code into an application. This discount code is still specific to the facility/program. It’s not as common as agents sometimes like to tout, but it does happen in certain instances. If another agent wishes to access that code for their client, the second agent must generally give a portion of the commission to the discount-holding agent/agency, typically 10-20%. Second, volume, plain and simple.  An agent that writes 1-3 disability plans per year may not be granted the same discount program access or latitude as an agent that writes 50-150 policies per year. — Rick Warren

This has to do with the volume of business. Some agents are captive agents and are incentivized to sell specific policies (which are not always best for everyone) — Stephanie Pearson

Every Physician Should Qualify for a Discount

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Keep your costs to a minimum. DI discounts should be available to every doctor.

I’m pretty sure I didn’t get a discount when I bought my disability insurance policy, so I was curious about what percentage of doctors should be eligible for some type of discount. This is what the agents said:

For Physicians? 100% — Jamie Fleischner

100% — Scott Nelson-Archer

We see some kind of discount, from one or multiple carriers, on at least 4 out of 5 proposal sets we work through. Probably even a pinch higher than that. — Rick Warren

95-100% — Michael Relvas

Almost all residents and fellows are eligible for discounted rates with some of the carriers. As attendings, if practicing in a large center, the availability of a discount is higher than if in the private sector. — Stephanie Pearson

Majority of our business comes from Residents and Fellows and they are all eligible for discounts. About 90% of our clientele qualifies for discounts. Though, the level of discounting will vary from company to company depending on employer and specialty. Residents and Fellows typically qualify for the maximum discounts whereas Attendings qualify for discounts mostly based on their employer affiliation.  — Bob Bhayani

Any physician, dentist or medical practitioner should qualify for at least one discount with at least one of the carriers. So I would say 100%. — Larry Keller

I think the best way to answer this is to say that of the thousands of doctors we’ve worked with through the years, we’ve never had a single doctor that we couldn’t get a discount. — Matt Wiggins

Four out of seven agents say 100% of docs, and the other three say 80-90%. So if you’re not being offered a discount, probably time to call another agent to ensure there isn’t one you qualify for.

Who Has The Best Disability Insurance Discounts?

This is where I tried to pin them out and give them a chance to shine. I simply asked “What specific discounts can you currently offer that other independent agents cannot? (Please be thorough).” I include their responses verbatim.

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Like I mentioned above there are almost no discounts that agents can offer that can’t be obtained and offered by other agents since these discounts have to be filed by the insurance companies with the states.  So, the real difference comes down to who can get the highest levels of discounts (there are different levels with some companies again based on volume) and who can get them at the most employers/institutions.  So, something that distinguishes us is that, based on our nationwide volume, we can almost always get the highest level of discount for any employer or training institution in the country.  The only situation where that is not true is in the rare case that a specific agent has an exclusive arrangement with a specific employer or institution and the insurance company will only allow that agent to use their discount for doctors at that location.  These used to be common but aren’t any more and the last remaining exclusive deals are quickly vanishing. — Matt Wiggins

To be quite honest, there are very few discounts at this point that are exclusive to select agents. The information is available, for the most part, and any broker can gain access to most discounts. There are some programs at select hospitals that are exclusively available through certain agencies representing those specific insurance companies. Even with the information being available though, it’s amazing how lazy some people can be. So, while I might not necessarily have any exclusive discounts, I know about hundreds of discounts available and actually include the proper discounts when providing people with information and making recommendations. So there is still an advantage to working with diligent and experienced agents. — Michael Relvas

I can’t really speak to what others can offer, but our current run-through looks like this:

  • Ohio National:  10% for MD/DO based on their agreement.  Ohio National will do multi-life discounting when 5 or more applicants apply at the same time, creating a facility/program specific discount.
  • Guardian:  10% for 24 month mental/nervous is static, not agent specific.  10% program discounts are available based on facility/program, Guardian has hundreds we can access although I find them very tricky to deal with when trying to establish new programs where 3 or more applicants are coming at the same time.
  • Standard:  Not known for their discounting.  10% for mental/nervous limitations to 24 month is about the only thing we will see.  However, Standard does have a number of strong options in the group & guaranteed standard issues product spheres but it takes a very large group to capture this.
  • Ameritas:  15 or 20% discount, gender specific pricing, for just about any physician group/program and a general willingness to open new discount programs based on our tract record with them.
  • Principal:  likely the most well-known in the discount discussion.  We have dozens of Principal discount programs, both gender specific as well as unisex.  Principal is by far the easiest to establish a new program discount, but it still does require at least 3 policies.  I have seen though, over the last 2-3 years, that Principal discounts can be… over-promised to an applicant by agents during the initial application phase, only to have that discount either not be available or less significant when the policy is finalized.  We insist that Principal validate & provide us their internal discount number prior to any client e-signing an application.  Sometimes there is human error on their quote team’s side, sometimes there is facility/program confusion, and other times we have heard from our clients that they were promised unisex but it came back discounted on gender-specific which yields a higher cost.  Either way, or by whatever genesis, the client should know to the penny what their approved plan’s anticipated cost will be before they sign the application.
  • Mass Mutual: again, discounting based on program (if they have established plans) which they always research. — Rick Warren

Honestly, most discounts are open discounts. As a true broker, there are not many captive discounts. I am sure that I have a few, but I could not tell you off the top of my head. — Stephanie Pearson

  • MassMutual currently offers unisex rates as a result of these with 15%, 25% or even 35% discounts. Some of these discounts are exclusive. They also offer GSI plans at certain institutions, all of these are exclusive. They do not offer association discounts to physicians.
  • Principal also has a Multi-Life Discount with unisex rates  However, this is not available to Residents/Fellows as of March, 2017 (unless they are graduating, going to an institution to work as an Attending Physician where Principal has a discount plan and they provide a copy of their employment contract to prove it).  They can then purchase their policy with unisex rates and a discount (based upon where they will be employed in the future, using that discount).  Otherwise, the Resident/Fellow Discount is 20% off of gender distinct premium rates. They also offer a 10% association discount. These are (typically) not national but rather regional or local.
  • Ameritas only offers unisex rates on polices that a Guaranteed Standard Issue (GSI), which have limited medical questions that must be answered. The number of institutions that offer this are limited and are exclusive to specific “endorsed” agents in a specific office. The maximum (total monthly benefit) between base policy and FIO Rider is $10,000.
  • Berkshire (Guardian) has Student/Resident Discounts at specific hospitals. Most of these discounts are “open”.  However, some are exclusive. They also have GSI plans at certain hospitals with specific “endorsed” agents in a specific office or agency. The discount is 10% with no unisex rates.
  • Standard Insurance Company offers a 10% Resident/Fellow Discount at certain institutions. These are “open” to all. They also have Guaranteed Standard Issue (GSI) plans with unisex rates available at specific institutions through specific “endorses” agents.
  • Ohio National has a 10% AMA discount. They also have unisex rates and a 15% discount on their GSI plans available at certain residency/fellowship programs through certain “endorsed” agent(s) for that specific institution.
  • I have a 10% association discount with Principal that I established for the American Society of Plastic Surgeons. This is National And best suited for practicing Plastic Surgeons. I also have a Permanent Total Disability (PTD) plan available through Lloyd’s of London. This is likely best for those that have “maxed out” their traditional coverage and still desire more coverage. — Larry Keller

That is really tough because I know we can offer all discounts across the country that are not exclusive GSI offerings.  Other reps may or may not be aware of the different discounts for a particular client so technically they may be able to offer but if they don’t know about them then they don’t know to share them with the client.  Now there are some institutional programs that have a specific rep that has a Guaranteed Standard Issue program in place and when a rep has that it is exclusive to that rep, when that is the case we refer the client to that rep for the best deal.  The only other oddity is currently with Ohio National, since they don’t do business in NY they don’t allow NY reps to be licensed with them in other states as a non-resident licensed producer.  Due to that, I have a few friends that refer their Ohio National business to us to write when Ohio is the appropriate carrier for that client. We do keep a list for institutions and business but we run our operation a bit differently in that we have been granted a few national discounts with carriers so we don’t have to worry if someone is an employee of company A or B, we can just plug them into our national association for the discount. — Scott Nelson-Archer

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Over the last 26 years, we have worked hard to put together unisex discounts at almost every hospital in the country. Clients who come to us have access to these discounts. If someone wants to work with another broker who doesn’t have this available discount, they will need to find multiple people from their same employer to secure the discount. Unisex discounts are the most significant discounts available for women as they reduce the premium by close to 70% or more. Women pay twice as much as men for disability insurance. Securing a unisex discounted rate makes a substantial difference. Here is our list of discounts. We are constantly adding more. All of our clients can obtain AMA discounts through multiple companies. As for multi-life, we can set this up as long as there are at least 3 or more people at the place of employment. If someone is a solo practitioner such as a psychiatrist, this is difficult unless they have hospital privelages and we can use that association for the discount.  — Jamie Fleischner

We are able to offer the following discounts:

  • Principal: Medical Students, Residents/Fellows: 30% discount (gender distinct rates), Attendings: 30% Unisex rates (approved Employers and Institutions only )
  • Ameritas: Medical Students, Residents/Fellows: 20% to 30% discounts (30% depending on specialty), Attendings: 15% to 25% discounts (25% depending on specialty)
  • Guardian: Medical Students, Residents/Fellows: 10% to 30% discounts (for approved Institutions and Employers only), Attendings: 10% discount (for approved preferred specialties)
  • MassMutual: Residents/Fellows: 15% to 25% unisex rates (for approved Institutions and Employers only), Attendings: 15% to 25% unisex rates (for approved Institutions and Employers only) — Bob Bhayani

The Best Process to Buy Individual Disability Insurance

So here is where the rubber hits the road. Given that some agents can offer some discounts that others cannot, what should your process be to secure individual disability insurance? Let’s go to our panel.

It’s honestly very difficult for consumers to ensure they are getting the right information. I’d say they should work with the right agent, but it’s difficult to know who the right agent is too. I’m not a big fan of people going to 5 or 6 different agents because it’s wasting a lot of people’s time for a relatively small chance of earning the business, but perhaps the only way to verify they are getting sound advice is to at least get quotes from 2 different agents. The next step is to ask questions about the discounts, especially if the information provided is different from one agent to the next. The fact that an agent cannot offer the discount is not good enough reason for them to not let a consumer know it exists, in my opinion. — Michael Relvas

They should look to see if they are being provided with an association or student/resident discount or not. If not, they should ask the agent(s) providing the quotes if the opportunity to purchase one exists. I would want to ask the agent why they are recommending what they are recommending and the pros/cons associated with the recommendation. — Larry Keller

Someone shopping for disability insurance should ALWAYS ask for discounted rates. If they are not quoted, they are likely not available from that broker. This is why it is important to find an independent experienced broker who has multiple discounts available. — Jamie Fleischner

They actually can offer the discounts so it really just means that rep doesn’t have the knowledge to know where to ask for the discount nor the desire to give the client the lowest price possible for the coverage provisions desired. — Scott Nelson-Archer

Pursue the best policy possible and then make the final combination of contract strength and cost be the determinant. I would ask anyone to weigh some questions about an overall policy before even looking at the pricing including mental/nervous provisions, future insurability rider set up, residual/partial provisions, specialty-specific, non-cancelable, graded premium availability (Guardian, Ohio National Ameritas.) Once a person zeroes in on their ideal setup for mental/nervous as well as future insurability, they are beginning to create their own short list of carriers.  This is where price will become a huge influence. To ensure they are getting the best pricing from each carrier, I really feel that the agent should be doing that upfront but the client can always ask, “Are there any discounts that we are missing?”  and/or if the client gets two proposals for the same carrier but from different agents, call it out if Agent #1 has a discount and Agent #2 doesn’t. Could merely be human error in proposal generation. —Rick Warren

Ask around. Speak to more than one. — Stephanie Pearson

Disability Insurance is insurance you will carry for a long time. Its purchase warrants due diligence before making a decision. Any Physician considering Disability Insurance should target a provider who specializes in Disability Insurance for Doctors. Typically an Independent agent will shop all the best carriers for you and match your request with maximum discounts applicable. Besides securing best rates, an Independent broker’s objective is to offer and educate you on definitions, riders and options, then let you choose the best fit for yourself. — Bob Bhayani

Obtain quotes from both local and nationwide agents that they trust based on information you gathered in your background research of the agents and spend about a week researching DI in order to know enough to effectively compare and find the best coverage and rate.  However, doctors typically lack the knowledge and/or time to devote to ensuring they make a good decision and get the best rate.  So, I think the smartest thing they can do is to start with an independent, online, nationwide agency because they are the most likely to have the most discounts available.  Find one that will teach them about disability insurance from an unbiased perspective and not just make their sales pitch.  Finding someone who will make the process simple and efficient is best for the time-stripped doctor.  If, at the end of the meeting, they still want to check around with some other agents, at least they will have a great starting point and a greater knowledge with which to make their final decision. — Matt Wiggins

As you can see, you are probably going to have to get at least one second opinion. I still wouldn’t try to use 10 different agents, but it seems reasonable to use two to make sure you’re getting the straight scoop, especially on discounts.

Can You Trust These Insurance Agents?

Finally, I asked them each what they would do if they knew about a discount that they could not offer a client but knew the client qualified for.

Our objective is to provide best value and guidance to our clients. When we come across physicians who are able to access a discount that we cannot offer , we refer them to that particular insurance carrier or broker as that would be in their best interest.  — Bob Bhayani

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If I know a discount is “exclusive” for that I cannot offer, I will either illustrate it (and explain in the email that should they choose that particular policy, it must be purchased via the “endorsed” agent and provide them with the name and contact information for that person) or if they are in need of a GSI plan or need a unisex rate that is exclusive, I tell them that as much as I would like to work with them, they need to purchase a specific policy and simply provide them with the contact information for the endorsed agent that can provide it to them. — Larry Keller

Refer them to who can offer it, there is plenty of business out there, do the right thing for the client. Regarding GSI discounts, most of the time it is just a call to the carrier to ask if (example) Duke has a GSI or discount then they will tell us if there is and what that discount/unisex is along with if it is open or closed except to a specific rep. If it is closed we will then ask for rep name and number to then forward the prospective client over. — Scott Nelson-Archer

I always find a way to provide a discount. If a discount is not yet set up at their employer, we find a way to set it up by finding multiple people who want coverage. Saving 10-70% on a disability policy over the course of 30 years is significant. This can save someone six figures. — Jamie Fleischner

I’ll be honest, out of thousands of meetings through the years, I’ve had less than 10 that I remember having better options elsewhere.  When they do, I inform them of what I know and point them in the right direction as far as I can.  It’s best for the client and it furthers our mission of helping doctors establish the best financial foundation possible!  We’d never sell them a policy that was more expensive if I know that they can get the same policy cheaper with someone else. — Matt Wiggins

One, we pound on the carrier to give us the same discount for that client.  We have enough policyholders with all the Big 6 carriers to stomp our feet a bit.  If it saves the client an extra 10% and we simply need to write “XYZ Agency” in on the application’s compensation sheet for 10% of the commission, so be it.  This agency does not become their writing or servicing agent, merely an “additional agent” listing. Two, we let the client know directly if we simply cannot access it.  To us, it is far better to let someone know all their options and let them make the informed decision.  If they chose to stay with us and forego 5% (as an example), then we are honored.  If they chose to capture the discount via another agent, can’t and won’t blame them one ounce.  No one should pay a dime more than they need to for insurance. — Rick Warren

If I know that there is a discount that I cannot offer, I will let the potential client know that I do not have the keys to that castle and recommend them seeking the policy elsewhere. — Stephanie Pearson

I will either illustrate the discount knowing I cannot offer it, or let the person know it exists and suggest they get a personalized quote from the agent/agency in order to include it in our comparison. I personally prefer to let people know about all of their options, regardless of who they will end up buying the policy through. — Michael Relvas

Now you know why these folks are on my list. Sorry the post was so long, but I think it is a subject that few people outside the insurance industry really understand and I wanted to provide a thorough resource with multiple points of view.

What do you think? Did you get a discount on your disability insurance? Which one and how large was it? Comment below!