How to Get Discounts on Your Physician Disability Insurance

By Travis Christy, White Coat Insurance

Navigating disability insurance discounts is a bit of a puzzle. Over the years, our advice to physicians has always been to find a reliable and responsive independent disability insurance agent who can give you quotes from all the major carriers. The whole drill involves having your agent lay out the individual disability insurance options from the Big 5 “own occupation” companies, comparing those options, and then making an informed decision.

In this post, we give you the lowdown on discounts for disability insurance and what’s available in the marketplace. Some discounts are plentiful while others are becoming less common. You’ll find out where to look for discounts, how big the discounts are, what companies offer them, and who to talk to to get more information about those discounts.

What Disability Insurance Discounts Are Available for Resident Physicians?

Let's begin with residents and fellows. Across institutions in the United States, discounts are available. For instance, Principal extends a discount to all doctors in training, regardless of their residency location. While Ameritas, Guardian, MassMutual, and Standard also offer discounts, they may not be universally available. These discounts typically range from 10%-20% depending on the insurance carrier.

However, it's important to note that some carriers may charge higher premiums for certain occupations, so a seemingly substantial discount may not be as significant as it appears. Therefore, it's advisable to consult one of our trusted insurance agents to thoroughly evaluate all options and quotes when considering discounts.

Disability Insurance Discounts Available for Certain Medical Specialties, Residents/Fellows, and Attendings

As someone who has been involved in the insurance industry for 15 years, I've observed how the word “discount” profoundly impacts consumer behavior, a phenomenon supported by findings in the Journal of Retailing. This influence extends to decisions about purchasing disability insurance, where discussions among industry experts often revolve around whether to adjust occupation classes or maintain discounts.

It's fascinating to note consumers' strong preference for products and services with the word “discount” attached to them—even when potential premium savings could be achieved by improving occupation classes. Ameritas and Guardian offer a “Preferred Occupation Discount” for specific medical specialties, further highlighting the allure of discounts. Some of these occupations represent a risk history that may be slightly better than the occupation class they’re in but not good enough to move up to the next occupation class with better pricing. Still, that word “discount” does ring a bell.

While MassMutual, Principal, and Standard do not offer a variation of this discount, they say their occupation classes reflect pricing that competes with these discounts.

Mental Nervous/Substance Abuse Limitation Discount

The Mental Nervous/Substance Abuse (M/N) 24-Month Limitation Discount is something you'll find in disability contracts from Ameritas, Guardian, Principal, and Standard. However, MassMutual does things a bit differently. Its base policy limits M/N coverage to two years per occurrence with no lifetime aggregate benefit. But if you're looking at a MassMutual policy, you can add a rider to remove this limitation (although it will increase your premiums by 15%). While the discount varies depending on the benefit period with other carriers, it still helps save on costs.

Certain medical specialties—like anesthesiologists, CRNAs, ER physicians, and Pain Management physicians—may face a mandatory 24-month limitation with all carriers. Gynecologists and OB/GYNs might encounter this specifically with Ameritas. Also, general dentists insured by Guardian and MassMutual and pharmacists with Principal are subject to such limitations.

It's important to know that some carriers apply these limitations to all contracts in states like California, New York, Louisiana, Florida, and Nevada. And if you're considering a Guaranteed Standard Issue Disability (GSI) contract, remember it comes with a mandatory 24-month limitation, too. All of this highlights how the insurance industry acknowledges mental health and substance abuse challenges when it comes to disability claims.

Medical Associations Discounts

Medical association discounts, while existing, are a rare find with the Big 5 disability carriers—they're challenging to uncover and not as prevalent as you may think. Their scarcity primarily stems from a lack of participation and claims experience. Although some programs have historically operated successfully, many have been discontinued over time.

Currently, you’ll find them through Guardian (10% off), MassMutual (10%), or Principal (5%). Ameritas and Standard have stopped offering them. Additionally, there may be occasions where carriers extend discounts on disability business products, such as disability overhead expense and disability buy-out for buy-sell planning.

More information here:

People Aren’t Buying Disability Insurance, But They Should

Own Occupation Disability Insurance — A Key for Doctors

Other Disability Insurance Discounts

Gender Neutral Rates (an Extremely Rare Occurrence These Days)

In the world of disability insurance, women frequently encounter the challenge of paying higher premiums compared to men. When I asked an insurance actuary about this, they explained that it boils down to women's proactive approach to healthcare. Regular doctor visits and early detection of health issues are common practices among women. Additionally, factors like pregnancy and reproductive health come into play, leading to increased early illness diagnoses among women. As a result, women often find themselves filing more disability claims and staying on claim for longer periods than men.

On the other hand, men tend to wait until symptoms manifest themselves, often leading to advanced stages of illness and subsequently higher mortality rates. Consequently, this is why life insurance costs more for men.

Despite these discrepancies, some insurance companies offer gender-neutral (unisex) rates on disability insurance, especially in settings where there's a balanced mix of both genders to spread the risk. By using a gender-neutral rate, women can save 15%-35% off a normal premium for them. While these programs are extremely rare, they can still be found in hospital groups and a limited number of residency programs. Again, these are extremely rare to find in the marketplace nowadays, and if you find one, consider yourself lucky.

On that same note, though, if you're an attending physician, it could be worth exploring the possibility of setting up such a program at your hospital by requesting a quote from one of our trusted insurance agents.

Multi-Policy and Other Discounts 

Some carriers will offer a multi-policy discount when buying two or more products from the same carrier. For example, you may get a 5% first-year discount on your disability insurance if you also buy life insurance with MassMutual. With Guardian and Standard, if you buy a business disability product and an individual disability policy at the same time, they’ll offer a discount on the business disability policy that can save you money for the next several years. With Ameritas, if you make two annual premium payments at the time of application, you’ll get a one-time 5% discount on your premium. Standard and Ameritas offer a small permanent discount if you apply using their electronic application and/or their electronic medical questionnaire.

More information here:

The Physician’s Guide to the Best Disability Insurance Companies

When to Drop, Replace, Modify, or Decrease Your Disability Insurance Coverage

The Bottom Line

It's important for physicians to understand the various discounts available when it comes to disability insurance. These discounts I've discussed are some of the most common ones you'll likely come across and are ones you could qualify for. Keep in mind, though, that the insurance world is always changing, and new discounts may pop up down the line.

So, I'll make sure to keep this post updated with any new discounts that become available. Understanding discounts tailored for residents, fellows, and attendings is key to making informed decisions about your insurance. As the insurance landscape shifts, staying informed about these discounts and how they affect your coverage is essential for securing the right disability insurance plan at the best possible price.

Obtaining quality disability insurance is a must for any physician, so you can be sure to protect your hard-earned income. Get a quote from one of our recommended insurance agents and cross this task off your to-do list today!

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

The post How to Get Discounts on Your Physician Disability Insurance appeared first on The White Coat Investor - Investing & Personal Finance for Doctors.