[Editor's Note: This is the first of our five sponsored posts this summer from the Platinum ($3500+) sponsors of the WCI Scholarship. Jamie K. Fleischner, CLU, ChFC, LUTCF is the president of Set for Life Insurance and a long-time advertiser here at The White Coat Investor. We have referred hundreds of readers to Set for Life and I have never had a single complaint. For this post, we decided to just keep it casual and do it interview style. Thank you for supporting those who support this site and especially the scholarship. 100% of proceeds go to the scholarship winners.]
Tell us about yourself. What are you like outside of your professional life?
I'm a married, busy mother of two teenage boys and two Border Collies. I spend a lot of time hiking and running and traveling every opportunity we can as a family. My friends would describe me as someone who is energetic, down to earth, productive and prioritizes people and experiences above things.
What drew you into insurance in the first place, and how did you end up working with so many doctors?
My father is in the insurance business so I had a lot of early exposure to the industry. Although we have never formally worked together, he has always been an invaluable mentor. When I was in college I did an internship with an insurance company selling insurance. I attended Washington University in St. Louis where they have a large medical school. I started making connections there and was referred to a lot of physicians and residents.
After graduation I decided to return to my hometown of Denver, CO. Within a few months, my mom became gravely ill and I took care of her full time. I had to take her to the University Hospital daily where I made a lot of personal connections and started writing a lot of business on the physicians and residents. She passed away 18 months later. This experience had a profound impact on my career and life. I learned the importance of income protection and it has stuck with me ever since. I have a great passion for disability insurance and realized early on that I love working with physicians. I naturally connect with them on many levels. Throughout the years as my clients moved around the country I continued to be referred to their colleagues and my business blossomed.
How many doctors do you write policies for in any given year?
Close to 1000/year.
When do you think doctors should buy disability insurance? As an intern? As a new attending?
The earlier the better. The most important thing to protect early on is your insurability, the ability to purchase more in the future without further medical questions. A lot of students and physicians are not aware that you can start with as little as $1000/month benefit and still be pre-approved for up to $17,000/month in the future for about $25/month premium.
What mistakes do you see doctors making with respect to their disability insurance?
1) Working with someone who only shows them one option. It pays off to work with an independent broker who can objectively show you all of your available options to find the most suitable policy at the best price.
2) Thinking that your employer policy is sufficient. Employer policies can offer benefits but there are several disadvantages. The benefits are taxable if your employer is paying the premiums, the definition may not be own occupation, there are caps on the amount of potential benefit received and the benefits are not portable if you leave. As such, it makes sense to supplement with an individual policy.
3) Paying full price. Find out if you are eligible for available discounts. This can save you anywhere from 10-75% depending on the situation.
4) Women paying female rates.
Which riders do you think are generally worthwhile on a disability insurance policy?
1) The most important contract language to have in a disability policy is the definition of disability that covers you if you can't work in your specialty even if you can work in another medical specialty or occupation. Without this language, the company may either reduce benefits if you work elsewhere or may not even pay a claim if you are capable of working elsewhere.
2) Residual/partial disability
3) The clause “non cancelable, guaranteed renewable.” This means the company can never modify your contract or raise your rates.
4) The ability to increase benefits in the future without further medical underwriting.
What is the best way to buy term life insurance?
Work with someone who can shop around to find you the best rate for you based on your circumstances. Some companies may be better for you than others. For example, here in Colorado we see people who use marijuana. Some companies would consider them smokers and others may not.
What's your opinion of whole life insurance?
I am not a huge proponent of whole life insurance. I prefer life insurance to cover the life insurance need only and to invest your money elsewhere. My philosophy is that insurance is designed to fill in gaps until you are able to self-insure. Once you have accumulated enough assets to self insure, you do not need the life insurance any more. Whole life insurance is a very expensive product that requires a tremendous commitment. I prefer that my clients buy as much life insurance as they need for protection and for it to last as long as they need it, typically until their last dependent is out of the house.
Why do you think so many doctors regret their WLI purchase?
I have a lot of physicians who come to me regretting their whole life purchase elsewhere. It is extremely expensive and they feel trapped. Oftentimes they are embarrassed. For example, I had a physician contact me after purchasing a whole life policy a few years ago with another broker and was paying close to $30k/year for $3mil of life insurance. He was married with 2 year old twins. He suddenly had a job change and could no longer afford the premiums. They were about to lose their house. The $30k/year became a huge burden. Fortunately he was able to reduce the death benefit to the minimum amount thereby reducing his premium. He didn't lose the premiums that he had already paid but was able to reduce his future premium payments. He purchased a $3mil term life policy for around $100/month.
Is there anything in particular women should be aware of when buying insurance?
Women pay twice as much as men for disability insurance. According to the top people at the companies that I have interviewed, this is both due to the rate of claims as well as the length of claims. Women tend to not only become disabled more often, but stay on claim longer. The best strategy for women is to look for a unisex policy. This means that the rates are the same for men and women. Depending on the company, this can save women 50-70% off of the female rates. It is important to note that not all unisex policies are created equal. It is important to ensure that not only the original policy is at unisex rates but future increases are at the unisex, discounted rate, too. Over the last 20 years I have focused on setting up unisex discounted rates at hospitals around the country. We have them in almost all 50 states. If they are not yet set up, we help clients put them in place.
When does it make sense to replace a life or disability policy?
First of all, it is important to note that you should never cancel a policy before the new policy is in force.
These are the circumstances when it can make sense to replace a life or disability policy:
- Cost. If you are able to reduce your cost significantly or by at least 20%, it may make sense to replace your policy.
- Benefits. If your policy is not a true own occupation policy or is not suitable for your needs, it may make sense to replace. Or, if you have a policy with increasing premiums such as an association policy, it may make sense to replace it with a fixed premium policy. This can save you a lot of premium over time.
- Your policy is no longer suitable for your needs. For example, you have a term policy that is about to expire but you still have young dependents in the house, you may look into replacing or adding to that policy. Either way, you will need to go through new underwriting.
When does it make sense to cancel a life or disability policy?
Once you are able to self insure, you can cancel your policy. For example, if you originally needed $2 Million of life insurance and your portfolio exceeds that amount, you may not need the insurance any more. However, if you have had a significant change in health and cannot go out and buy the insurance any more, you may want to keep the insurance.
If/when you reach financial independence and are only working because you want to and are no longer dependent on your income, you may no longer need your disability policy. For a disability policy, if you reach age 65 and are not working full time, you may need to drop the policy.
Can you tell me more about the discounts available for disability insurance?
There are several available types of discounts:
- Unisex, discounted rates. As noted above, women can save between 50-70% on their female rated policies.
- Association discounts. If you are a member of the AMA, there are a few companies that will offer a 10% discount.
- Some companies offer a 10% discount if you also purchase life insurance.
- Resident discounts. Some companies offer discounts for medical residents. These discounts are 10-20% depending on the company. Some of these discounts are only for the base policy and do not apply to future increases and some will allow you to maintain the 10% on future purchases.
What issues have you seen with doctors trying to make DI claims?
- The first thing I tell my clients when they are going to file a claim is to document everything. The more organized you are the smoother the claims process will be. Keep track of when the injury/diagnosis occurred, lost hours or wages and the names of all of your doctors.
- Delaying filing a claim. I've seen people not realize until several months later that they have had a loss of income.
- Not realizing they have a claim. A lot of people forget that they have a residual/partial disability rider on the policy that only requires a 15 or 20% loss of income to instigate a claim.
How are you different from other insurance professionals?
- Responsive. My clients can always expect a response within 24 hours. Even if I don't have an answer to their question, I always acknowledge their question and retrieve an answer in a timely manner.
- Experienced. 24 years in the business.
- Discounts. We have among the largest portfolio of available discounts in the country.
- Approachable. My clients all have my cellphone number and call and text me 24/7.
- Candid. I am very matter of fact when I work with people and advise them how I would advise a family member. People appreciate my honesty. They are often surprised to hear that they should continue working with their existing broker and that they do not need to make any changes or replace their existing coverage.
- Future service. I keep in contact with my clients regularly throughout the year and check in at least once a year to ensure their contact information is up to date and that their insurance is still meeting their goals. I also remind people when they have opportunities to make changes on their policies.
- Woman. In a highly male dominated field, I'm the only woman at this level in this niche field of physician disability insurance.
Thank you Jamie for your detailed answers and for sponsoring the scholarship!
What do you think? Are there other questions I should have asked that you'd like to know the answer to? Have you worked with Set for Life Insurance? What was your experience like? Comment below!