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Does own specialty matter for disability insurance?

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  • Does own specialty matter for disability insurance?

    Looking over Guardian's policy for their "Enhanced True Own Occupation Definition", they state that you are disabled if you cannot perform the duties of your occupation or if more than 50% of your income is from patient care or surgery and you can no longer perform this. Your occupation is defined as your duties over the prior 12 months. However, some other policies have specialty-specific wording, such as if you have limited your practice to a specific specialty, your occupation is considered that specialty. It's hard to imagine a situation where one policy would be more beneficial than the other. Is it important to have a policy that is specialty specific?

  • #2
    Scott at MD Financial Services is your go to person here.

    When I was getting my disability policy my agent was telling me about a surgeon developed a tremor. She had a "specialty" disability policy, so she was allowed to teach while still being qualified to receive disability benefits.

    Another story was an orthopedic surgeon could no longer operate, which previously was >50% of his income. Now he sees the pre & post ops, while a new hire does the surgeries. His disability policy was okay with this.

    I did not go with Guardian due personal medical issues. I have a Principal policy with "true own occupation" (or something like that). My agent told me if I become disabled I could collect benefits while going to teaching. Or answer the office's phones, schedule appointments, etc... Or open a chain of medical practices. I just couldn't see patients anymore, based on my prior year's billing. If surgery was >50% if my income, then I could do non-surgical patient care & still collect benefits.
    "Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

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    • #3
      In answer to your question, yes. Not only your own specialty, sub specialty, but your own practice. True own occupation and the definition of disability are what you are looking for.
      One reference to some previous posts on the topic. The legal wording is different, but accomplishes the same.
      https://www.whitecoatinvestor.com/fo...western-mutual
      This has links an more comments.

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      • #4
        Hah - what if you're peds? It's not like you can go a lot lower on the physician compensation hierarchy.

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        • #5
          Every MD needs own specialty insurance coverage, even radiologists, in my opinion. What if you get a mild TBI to where your medical judgment isn't reliable, but you could still push carts at Walmart? It would suck to have that disability claim denied if you purchased an "any occupation" policy.

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          • #6
            In my opinion, if you have a true own specialty from any of the carriers then you are in really good shape. There is a pro and con to the 50% rule that Guardian has. The pro is it can make someone feel comfortable because it has a clearly defined number. The con is what happens when that surgeon had 45% of their income from surgery and the rest was from clinic work which was being referred to them. Once they can't do surgery, are they still going to get the referrals for the clinic work that was making up 55% of their revenue? Other carriers might certify that as a total claim but Guardian might only certify that as partial since the 50% number was not hit. My point is you never really know exactly how a carrier might handle a claim because we don't know exactly how a practice/physician is performing or running their practice at that point. If you were my client we would build all of the disability contracts with the same terms you are looking for to meet your expectations of performance at claim time and then see which one has the best cost per dollar of coverage.

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            • #7
              Originally posted by Romberg45 View Post
              Every MD needs own specialty insurance coverage, even radiologists, in my opinion. What if you get a mild TBI to where your medical judgment isn't reliable, but you could still push carts at Walmart? It would suck to have that disability claim denied if you purchased an "any occupation" policy.
              Keep in mind that an Own Occ not working still allows the client control of if they push carts at Walmart or not. In addition, most individual contracts have a threshold of 80% loss of income triggers 100% of payout. If a client was making $250k then they can go get another job making $49,999 and still get 100% of the disability. My point is depending on the specialty I think someone can be buying benefit/designs that are certainly overkill based on their specialty.

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              • #8
                Originally posted by Scott at MD Financial Services View Post

                Keep in mind that an Own Occ not working still allows the client control of if they push carts at Walmart or not. In addition, most individual contracts have a threshold of 80% loss of income triggers 100% of payout. If a client was making $250k then they can go get another job making $49,999 and still get 100% of the disability. My point is depending on the specialty I think someone can be buying benefit/designs that are certainly overkill based on their specialty.
                That is a good point, but I think every physician (assuming they're not financially independent) should have some sort of own occupation, or own occ not working, policy that covers them if they're unable to work in their own specialty.

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                • #9
                  Originally posted by Romberg45 View Post

                  That is a good point, but I think every physician (assuming they're not financially independent) should have some sort of own occupation, or own occ not working, policy that covers them if they're unable to work in their own specialty.
                  I agree 100%, you do not want an insurance company saying "with your education or training you can be X", not everyone wants to use their medical degree to biology in the H.S. In addition, it is incredible how many contracts will say you have to be 100% disabled to ever qualify for claim or once on claim you have to do any job the carrier says after 24 months. Heck one of my clients had a group plan, received a double lung transplant 6 years ago, at 2 years into the claim the carrier starts with U and ends in M said he needed to go be an Uber driver because he had a drivers license. Can you say risk of getting sick and rejection? All of that because the contract said "any occupation based on education, training, or experience". Anyway it kind floors me what these companies present as solutions for physician coverage and what office managers buy as coverage for the physicians, I am sure it always just comes down to the bottom line. Our stance is we would rather not take on a client than have language we know won't meet the expectations at claim time, that is just a recipe for bad outcomes.

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                  • #10
                    Originally posted by Scott at MD Financial Services View Post

                    I agree 100%, you do not want an insurance company saying "with your education or training you can be X", not everyone wants to use their medical degree to biology in the H.S. In addition, it is incredible how many contracts will say you have to be 100% disabled to ever qualify for claim or once on claim you have to do any job the carrier says after 24 months. Heck one of my clients had a group plan, received a double lung transplant 6 years ago, at 2 years into the claim the carrier starts with U and ends in M said he needed to go be an Uber driver because he had a drivers license. Can you say risk of getting sick and rejection? All of that because the contract said "any occupation based on education, training, or experience". Anyway it kind floors me what these companies present as solutions for physician coverage and what office managers buy as coverage for the physicians, I am sure it always just comes down to the bottom line. Our stance is we would rather not take on a client than have language we know won't meet the expectations at claim time, that is just a recipe for bad outcomes.
                    I agree. This stuff isn't even all that expensive if you're young and healthy. An intern making $55k will be paying about $1300/yr for social security disability, which is an any-occupation plan without any residual benefits and would only pay about $2200/month for a resident if you're even eligible.

                    I won't even be eligible for Social Security disability benefits until I'm a PGY-3, yet I'm still dumping $1300/yr into that plan. I'm glad I got a policy for $6k benefits per month for $2k/yr. I actually feel so much better now not having to worry about the possibility of financial catastrophe from a disability (I have a worrier's personality).

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                    • #11
                      Originally posted by Scott at MD Financial Services View Post
                      In my opinion, if you have a true own specialty from any of the carriers then you are in really good shape. There is a pro and con to the 50% rule that Guardian has. The pro is it can make someone feel comfortable because it has a clearly defined number. The con is what happens when that surgeon had 45% of their income from surgery and the rest was from clinic work which was being referred to them. Once they can't do surgery, are they still going to get the referrals for the clinic work that was making up 55% of their revenue? Other carriers might certify that as a total claim but Guardian might only certify that as partial since the 50% number was not hit. My point is you never really know exactly how a carrier might handle a claim because we don't know exactly how a practice/physician is performing or running their practice at that point. If you were my client we would build all of the disability contracts with the same terms you are looking for to meet your expectations of performance at claim time and then see which one has the best cost per dollar of coverage.
                      Thanks for your input! When you state that if you have a true own specialty from any of the carriers then you're in good shape, would you consider Guardian in that? It is own occupation, but the fact that it does not specify specialty is throwing me off a bit. I'm sure they could say my occupation is a "physician" rather than "specialty", but as someone who's not going into a procedural field it's hard to imagine a scenario where I could not do my specialty but could do tasks that they would state a physician could do.

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                      • #12
                        Guardian is in the group you would be ok with, no doubt about that. The way they determine things is at claim time they look at what you have been billing for on CPT codes as that is a true representation of you daily work.
                        I agree, most primary or non-procedural folks really should look at what is called an Own Occupation Not Engaged definition, because if you get hurt or ill enough that you can't do your work then what work could you justify being able to do but not your pre-disability occupation. I think a number of clients get oversold or over buy on this definition. The premium spread is usually 15%+/- for that definition vs. true own specialty definition so the money can add up.

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