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.
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.
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.
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 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
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:
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.
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
- 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
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 privileges and we can use that association for the discount. — Jamie FleischnerWe 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-ArcherPursue 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
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
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'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
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!
Let’s say someone does their due diligence (in terms of doing all their research on WCI) when selecting their policy but doesn’t get a second opinion at the time. Now that the policy is in place, is it worth getting another agent to review the policy to make sure all the details are sound? Since agents normally get paid only when selling a policy, would a DI agent even be willing to offer a second opinion on a policy already sold?
We would be happy to do a quick review for you.
Yes, they would be willing. Whether it is worth it or not depends on what the second opinion says. If they say, “Nah, your policy is fine” then it wasn’t worth it unless it helps you sleep better or something. If you’ve got a policy from the big five that pays out a five figure amount, it’s likely fine. But if you want to see if you can save $50-100 a month, sure, shop it around again.
I pay about 450/mo for 14k. Am healthy early 30s. No medical problem. Does this sound reasonable?
It could be but it really depends on exact age because 30 vs. 35 is about 20% price differential, your specialty can also have a 20% swing on price, the state you live in can be from a -10% to an additional 30% and of course the riders included make a difference as well. As a general rule of thumb $20-$25 per month per $1,000 of benefit for males ages 27-32, if in CA then add $5. Every year after 32 up to 40 the cost compounds up by about 4-5% until a contract is locked down.
If you want some exact rates let me send me your Date of Birth, specialty, state you live in and gender along with exact details of your existing contract and we will run them out for you. My opinion is you are probably about $800-$1,000 per year to high on your premium.
Yes. $450/14,000 = 3.2%. Doesn’t mean you can’t do better, but it’s certainly within the realm of reasonable pricing if that’s the only info you’re going to give.
I noticed you are doing a %, what we should be looking at when buying a policy?.
Example a $200 month for 10,000 will be 2%, is that consider good, bad, what are the benchmarks.
There are so many variables it’s hard to draw up a rule of thumb. As you get older or sicker it gets more expensive. As you add bells and whistles it gets more expensive etc. What you should be doing is using a high-volume, independent agent and maybe bouncing it off a second one to make sure you’re getting the best pricing.
For an individual policy, expect to pay 2-6% of the benefit amount. A group policy, although generally weaker, can be much cheaper.
Just be mindful that since about 60-70% of all physicians are now employees that have employer sponsored group plans they should read their group policy and specifically “Income Benefit Offset” provisions. Most employer group plans will state that they will reduce their payouts dollar for dollar against any benefit received from another group or an association plan. Typically you will see it written like this in those employer group plans:
Other Income Benefit Offsets
(1) benefit amounts that are payable for disability under any other group or association insurance
coverage; or
That makes buying a group product from another employer relationship or a plan from a medical association potentially ineffective because it reduces the employer provided plan by the amount you just acquired. By purchasing an individual plan it does not reduce the employer provided benefits, so by acquiring an individual policy one would get what the employer provides and what the insured purchased.
The bottom line is be aware of what you buy and know how it fits together since it may not produce a positive ‘Net Effect’ on total benefits to be received at claim time.
Awesome post as I am currently shopping DI right as we speak! I have really had great experience with all you guys advertising on WCI. I randomly checked what a random guy that term4sale recommended when I was looking for life insurance, and his prices were nowhere near WCI agents.
This blog post though has not touched on a question I’ve posted on the forum regarding the viability of Ohio National. Bob Bhayani was very honest in not offering me a policy from this company given it has consistently been downgraded in its rating from 4th highest to 7th highest Moody rating. He is at risk of losing my business given his strong feeling. Seems though he is the only concerned agent while others are still confident this is a reliable company.
Has it ever happened that companies in the 7th highest rating go under, especially if they were 4th highest and consistently trended down? This seems almost like stock panic- you see Apple stock go down and then you in response sell stock, despite Apple selling the same amount of iPhones and iPads. I just don’t know the history of these DI companies if Ohio National is likely to go the way of the dodo?
Any thoughts? Is there a company in the past like Ohio National that kicked the bucket?
Ohio has had a rating reduction but as I posted in the forum it is due to the secondary guarantees they allowed consumers to put on their Variable Annuities but that does not mean they are at all at risk of going the way of the dodo. When carriers have gotten hurt by products they typically stop selling them and stop paying commissions (which concerns some reps) in order to shore up that division, that is exactly what Ohio did on the VA front. Other carriers that have stopped selling disability have typically just stopped offering products (MetLife stopped in 2016), other sold off their block of business to other carriers (Minnesota Mutual did this years ago to Standard). Yet a few have gone into receivership where the state department comes in takes over then sells off the business to other bidders. In none of these situations has a client that owned a non-can policy been hurt and the client has maintained their policy with the same premium/features all in tact. Once again Ohio is no where close that but if you are really concerned about it, just buy the next best priced product, it probably is pretty close in price and if that makes you feel better then do that. There are worse things you can spend money on than peace of mind!
I don’t think there is enough data to answer your question. Like with anything, if you get way out into the weeds you’re going to find differences of opinion even among educated folks. As Taylor Larimore likes to say, “When experts disagree, the answer likely doesn’t matter much.”
Insurance companies have gone under in the past, but most of the time their policies are picked up by someone else and continue to be serviced and even if it isn’t, you would have to have become uninsurable AND then become disabled. Multiply those probabilities to assess your true risk.
Is it possible to buy a disability policy without the use of an agent? ie do any of these insurers let you go onto their website and select the options you want and purchase it on our own much as we do almost everything else in our lives now? I have had my DI policy for a number of years now and I am not sure what my broker ever did to ‘earn’ his commission? this whole process seems intentionally opaque…how can we cut out the middle man and save for ourselves?
Not really. Might as well use the agent and their knowledge to assist you.
What did he do to earn it? He sold you a policy. So the insurance company paid him for doing it. If you wanted him to do more for that commission, you needed to demand more before buying- more information, more illustrations, more explanations etc.
With the multiple types of discounts available, are they “stacked” or “only one per purchase”.
Unisex, resident/fellow, institution, broker?
40/20/20/20 would really be fantastic.
100% means free doesn’t it? Most discount coupons say “not valid with any other offer”.
Tim,
You crack me up with some of your commentary!
I’ll say I was never once referred to another producer when I was shopping for DI even when I expressed interest in a policy when there was a sub-maximal discount, and I talked to basically everyone in your article that was writing policies in 2015. That being said, I went in knowing exactly what policy I wanted.
It was really easy to find the Agents’ Guides for underwriting these policies on the internet, and it allowed me to really get elbows deep into the DI world to understand the product. With Ameritas, for example, I knew going in that I should be looking for at least a 10% discount but preferably 20% as part of a multi-life discount.
I decided what riders I wanted on my policy first (settled on residual disability, COLA and catastrophic) and knew that the benefit I’d qual for as a resident was $5K to start with with some sort of increase option of $10,000. Armed with that, I then went to a bunch of different independent agents (probably 5) and my financial advisor at the time and asked for quotes for all the major insurers at the time (G,A,MM,Std,P).
I was amazed at the variety of discounts that were available. Only two could get me 20% on Ameritas, most had only 10% on a Guardian policy. Set For Life’s Principal discount was 30% at the time, but I felt like the own occ definition was not as good, so I ended up with an Ameritas policy. None offered me the double annual premium discount but I think I surprised a few by knowing to ask for it. Interestingly, I’m not sure if it’s allowed to be done just once or with every other modal premium anniversary, but it’s like 10% so not bad, you just have to pay 2 years of DI premium all at once.
Only one producer seemed bothered that I was shopping around and said I shouldn’t waste his time any further. He’s not a site sponsor anyway.