In this episode, Billy Gwaltney discusses the intricacies of insurance coverage during claims, particularly focusing on the limitations of increasing coverage based on salary changes. He explains the formula used by companies to determine eligibility for coverage and the stipulations surrounding benefit increase riders.
Takeaways:
- There’s a formula that companies use to calculate coverage eligibility.
- You may be eligible for a higher coverage amount after training.
- Benefit increase riders have specific stipulations.
- You need to increase coverage by at least 50% of the max eligible amount.
- If you increase coverage, it affects your claim duration.
- Understanding your coverage options is crucial during claims.
- Insurance policies can be complex and require careful navigation.
- Disability insurance is essential for financial security.
- Consulting with an expert can clarify insurance options.
Transcript:
00:00:01:18 – 00:00:19:02
Welcome to the Cover Your Assets podcast, a show for the physician who understands the importance of protecting everything you’ve worked so hard to achieve. If you’re ready to find the peace of mind that only financial security can bring. Let’s get started. Here’s your host, Billy Gwaltney.
00:00:19:04 – 00:00:34:11
Hello. Welcome to today’s episode of the cover of Your Assets podcast. I’m your host, Billy Gwaltney. And today we’re going to talk about term life insurance. Why? The best term life insurance policy is not always the cheapest. Buyer beware.
00:00:34:13 – 00:00:43:14
As a disability insurance specialist, working with thousands of physicians across the country, always get asked, hey, can I buy a term life insurance?
00:00:43:14 – 00:01:24:20
Also, the answer is yes. We help most of our clients with term life because it’s, so similar from a medical screening standpoint. And the term life insurance market is very different than the, the private disability marketplace term life is much more commoditized. And insurance companies have made certain philosophical decisions. In fact, the, the majority of them have where they’re basically, in order to reduce cost, they are gutting their client services component of their business.
00:01:24:22 – 00:01:50:16
They’re not many carriers that haven’t done that. The one one of the best ones that I’ve come across in the last probably 15 to 20 years that has not done that and is still robust in their servicing of clients, is actual people, is Ameritas. They’re also one of the top, specialty disability carriers. They’re the the only top carrier that offers the same payer discount on the life insurance as well.
00:01:50:18 – 00:02:16:22
So pretty much all of our term life is with Ameritas. The rates are very good. But equally important to the rate is the care that you as a policyholder get. I have my term life insurance with them as well, so I know it firsthand. And I can move the needle if we ever need help or an exception, for something related to your policy, because we do a lot of business with them.
00:02:16:22 – 00:02:42:04
They know who I am, they like who we are and like how I operate and my team operates. And so we have influence there. When you go, kind of Google term life carriers and get quotes online, you’re working with an agent like me who has made a philosophical decision to not communicate with you directly, but to have an online portal.
00:02:42:06 – 00:03:11:12
And they broker the, the, the, all the, the big names, the carriers and it’s usually cheapest wins and it’s kind of a chop shop like approach. Okay. So, what that means is that the medical screening is kind of a quagmire, and it is fine if you’re perfectly healthy, but if you’re not, then, then there can be some things that are going to be difficult to, to find out or navigate to you get no service.
00:03:11:12 – 00:03:35:14
Okay. Like and I had to stop brokering these companies because when you need servicing, you rightfully would contact me and I would then have it got to the point where I had to basically call the same customer service number that you would call. Okay, they have gutted their client services division, which means they’re there’s a very small team.
00:03:35:16 – 00:04:01:06
If there’s any team at all to deal with, premium payment questions, changing beneficiaries, converting the policy if you want to keep it longer than the term period, which a lot of them don’t even let you do that. That’s another important, consideration when it comes to term life is having the flexibility or the freedom to switch it to a permanent life policy if you wanted to in the future.
00:04:01:08 – 00:04:21:11
So there there are a handful of things that are really three or so things that you look for in a term policy. One is it with a reputable company? Is it a good, solid company? Check. Yes. You want to make sure that two, is the cost on par? Is it among the least expensive among the top tier carriers?
00:04:21:11 – 00:04:43:00
Yes. You want to check that box? Two three if I ever need help. Can I get it? Okay, that’s a box that you need to check. And you might think, well, it’s a term policy. How difficult can it be? We have, if you miss a premium payment, you get a certain grace period. If the annual premium notice doesn’t show up and you forget, you get a certain grace period.
00:04:43:02 – 00:05:07:23
We’ve had clients miss that grace period, and I’ve been able to let them get there or help them get their policy reinstated. With a company like Ameritas, simply because of my relationship with them. They did me a favor. They do not owe that to any policyholder. Once that grace period is gone, most insurance carriers, especially the chop shop carriers, are just going to write it off and you’re done.
00:05:08:01 – 00:05:33:22
You might be healthy enough to get a new one, but you’re going to start over. It’s just very difficult to do that. So that’s just one scenario where that’s important. If you need to change beneficiaries and if you need any kind of help, then, then you’re kind of on your own. If you’re with one of the, the, the cheapest kind of chop shop companies, if you work with me, I can help you get those things done.
00:05:34:00 – 00:05:54:23
A lot of times it is going to be the least expensive option, but sometimes it won’t be, and and I just that’s just the way it is. And if, you know, if I’m not worth the 5% extra or 10% extra or whatever it is, then yeah, just go with whatever the, the online portal is. So that’s kind of how the, the term life marketplace works.
00:05:54:23 – 00:06:28:08
The third thing to keep in mind is the conversion, the ability to switch your term policy to a whole life or universal life or indexed life policy in the future, should you want to. Okay, or should you need to. Now, you may never intend on doing that, but if your health changes down the road and you’re uninsurable and you want to keep life insurance for for the rest of your life, especially as you realize that your life expectancy is shorter because of an illness or something, then the hard reality is, where’s that money going to come from?
00:06:28:08 – 00:06:56:06
Do you what it what are your options? And successful people, wealthy people keep their options open. And one thing that you want to make sure of is that your term policy has the ability to allow you to convert or switch to a permanent policy without any additional medical screening. And Ameritas also automatically allows the long term care rider to be added to the death benefit of their permanent life policy without any additional medical screening.
00:06:56:06 – 00:07:28:10
They’re the only carrier that does that, the only top tier carrier that does that. That’s not a chop shop. So, the devil’s in the details. Also, when it comes to term life, insurance policies and cheapest doesn’t always mean you’re getting the best. So buyer beware. Please be careful as you consider that. Because if your health changes and you get several years down the road and you find that you don’t, that you’re kind of navigating your own island by yourself, it might be too late to fix anything.
00:07:28:12 – 00:07:46:15
With my clients, I know that as they work with me that we’re going to be able to be involved, and we have the best shot at helping get things done. If changes need to be made, if updates need to be made, or if there are any curveballs, we have a chance of hitting the curveball. And that’s what that’s what we want.
00:07:46:16 – 00:08:12:19
That’s what the goal of this is, is to make sure the insurance does ultimately what it’s supposed to do. And also, if you do need to change something or if you need assistance, if something if you do have a curveball that we have the ability to to navigate that and get you where you’re supposed to be. So, and I’m just kind of talking off the, off the chest here and from the heart when it comes to this.
00:08:12:21 – 00:08:32:21
I want to help you get this part of your life, right. The disability coverage you’ve gotten. Right. If you’re thinking about life insurance, please be sure that you don’t miss the forest for the trees and find yourself being penny wise and dollar not so wise when it comes to this part. Just, factor that into the equation for what it’s worth.
00:08:32:21 – 00:08:48:18
Food for thought. I hope you found this helpful. Please message me or text me here (704) 270-2376 if you’d like to discuss further. Happy to do that. (704) 270-2376. Thank you as always. See you next time.
00:08:48:20 – 00:09:12:23
for listening to the Cover Your Assets podcast and on Conduit Media Production. New episodes drop every two weeks. If you’ve enjoyed the conversation, subscribe, rate and review this podcast. For more tips and advice. Visit the website and YouTube channel. Check the show notes for links. Join us next time for another episode dedicated to helping physicians like you get your disability insurance right and protect your way of life.
