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:
- You cannot add coverage if your salary as an attending.
- 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;23 – 00;00;19;23
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;26 – 00;00;44;19
Hello. Welcome to today’s episode of the Cover Your Assets podcast. I’m your host, Billy Gwaltney. It’s good to be with you. Thank you for your time. The topic today is, can I increase coverage? While I’m on a disability claim, I work with thousands of physicians across the country helping them secure their private specialty on occupation disability coverage.
00;00;44;19 – 00;01;23;21
The good news? Well, the not so good news is we do have clients on claim. They they all were healthy enough or healthy ish enough to get the coverage when they started. But they never they never thought they’d need it. But they did need it. And, it’s been, a privilege. And, I’ve worked with clients during the claim process, helped them navigate that to make sure the check shows up when it’s supposed to, to make sure that anything that is, needs to be cleared up with the claims people is cleared up to make sure they stay the top priority, kind of at the top of the the
00;01;23;21 – 00;02;02;15
list of claims that they’re working on to make sure that this gets handled. In a, quick way. So that’s not so good news that they were on claim. The good news, though, is that every one of our clients has gotten paid. We’ve never had a client not get paid for a disability. We’ve never had one need to hire an attorney or go into some kind of, third party arbitration hearing or whatever you might think of to be sure they got their benefit if if your doc, if you have this coverage and you’ve done it right, if your doctor says you cannot perform the material duties you were performing before
00;02;02;15 – 00;02;25;21
the event, before the diagnosis or the event, the illness, the injury, then, they’re going to have to pay you and they know that. Now, can you increase coverage while you’re on claim? Generally, no. You cannot add coverage if your salary as an attending, there’s a formula that the companies used to calculate how much you can buy.
00;02;25;23 – 00;02;55;05
And let’s say you start in training at 5000 a month of coverage. And then when you become an attending, you’re eligible for 20,000, a month of coverage. And you say, well, I don’t need that much yet. I think I’ll just bump it up to 12,000. And you, you do that or you stay at five. But let’s say you do increase it some you just because the benefit increase rider you may know has, stipulation that you need to increase by at least 50% of the max that you’re eligible for.
00;02;55;07 – 00;03;18;18
So, if you had 5000 a month and you’re eligible for, 20,000 a month, that’s a $15,000, a month increase, you need to increase by at least 7500. So let’s say that you increase to 12,500, and just did the 50%, and you become disabled. Then the 12,500 is what you’re getting for the duration of that claim.
00;03;18;20 – 00;03;41;16
Now, if you have the cola rider cost of living adjustment rider on your policy, that amount will increase starting in the second year. Based on the the calculation for the Cola rider that you have is usually 3% somewhere in that range. And that will compound over time and in most cases, and so there will be an increase off of the 12,500.
00;03;41;20 – 00;04;05;27
Okay. What you can’t do is once you start getting the 12 five to say, well, I was eligible for 20, can I bump up to 20 now that I’m disabled? The answer is no. You can’t do that. And so it is important to make sure that you have the maximum coverage before the claim is filed. Because once it is filed, you’re, you’re you’re at that amount.
00;04;05;29 – 00;04;25;20
Again, the adjustments for the cola, but that’s it. So I wanted to answer that question. It does come up. It’s not intuitive necessarily for people that haven’t dealt with insurance. In the past, much if at all, to, to, to assume or to think that they can’t increase once they’re disabled. You can’t adjust it later.
00;04;25;20 – 00;04;49;27
So you got to plan before the event happens. Once the event happens, you just get what you have. You can’t plan much after that. Planning is about before the event. Then what happens? You’re just dealing with whatever you did or didn’t plan for before it happened. So I hope you found this helpful. Quick podcast. I wanted to just get to the point of message me here if you’d like to discuss.
00;04;49;29 – 00;05;16;29
I’d be happy to do that. Or you can text me at (704) 270-2376. Again (704) 270-2376. I look forward to seeing you next time. Thank you, as always, for your time. I’m grateful for that. Take care. Thanks for listening to the Cover Your Assets podcast and Art Conduit Media Production. New episodes drop every two weeks. If you’ve enjoyed the conversation, subscribe, rate and review this podcast.
00;05;16;29 – 00;05;30;06
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.
