In this episode of Cover Your Assets, host Billy Gwaltney discusses the critical importance of choosing the right disability insurance broker to avoid becoming an ‘orphaned’ policyholder. He emphasizes the risks of working with inexperienced agents and shares insights on how to ensure ongoing support and claims assistance.
Key topics
- The concept of orphaned policyholders and its risks
- The importance of working with experienced insurance brokers
- How to ensure ongoing support and claims assistance
- The impact of broker turnover on policyholders
Takeaways
- Always work with a dedicated, experienced insurance broker.
- Beware of brokers who may leave the industry and stop supporting you.
- Your broker’s ongoing involvement is crucial during claims.
- Buyer beware: the broker’s role is vital in policy management
Transcript (full length ep)
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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.
Hi there, welcome to today’s episode of the Cover Your Assets podcast. I’m your host, Billy Gwaltney, and it’s good to be with you. Today’s topic, I want to cover how to avoid becoming an orphaned disability policyholder. I work with physicians nationwide, helping them secure their private specialty disability coverage. And in the insurance world, which I’ve been in for over 30 years, since I was
I still in college, it was when I started. They refer to policyholders who no longer have a broker or agent assigned to them as orphaned policyholders. And that’s a powerful term. To be orphaned means to have lost your parents. Whoever’s in charge are supposed to be guiding you or shepherding you or caring for you, looking after you.
accessible to you and so forth is not there. any, you know, regardless of the reason, you’re on your own. And that’s a scary thought. When you buy disability insurance, the same thing is true with life insurance, and I help most clients with life insurance, but all of our clients, help with disability insurance. So I’m specifically referring to regarding disability.
There has to be an agent or a broker. So if you call an insurance company directly, one of the top four carriers, Mass Mutual, Guardian, Principal, or Ameritas, they’re going to send you to me or to a broker or agent to quote help you. What most people don’t understand is that the insurance world is a commission-based world where you eat what you kill. That means that the attrition rate is really high.
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is probably, last I’ve heard is upwards of 95 % of people that start out in the insurance business are no longer in it within three years or five years. So if you’re buying disability insurance and you are talking to someone who has been doing this for five years or less or even 10 years or less, there is a very high probability that in the next 10 years they won’t be doing
They’ll be doing something else. They’ll go work for the bank. They’re going to have to figure out how to pay some bills. And it’s just a difficult way to get started and to hang on long enough to have the persistence and stamina to be able to build it up. And so then you throw in the reality that the disability insurance world is quirky.
even financial advisors and the insurance agents that I know would rather do anything but disability insurance, most of them. So the people you’re talking to is a small number. There are not many specialists that do this at the level we do it. I’ve been doing this a long time. And so you go, well, why does that matter? Well, when you buy your policy, the broker gets paid a small percentage of the premium you’re paying for the life of the policy, whether they
whether they continue to help you or not. Okay, that’s baked in. There’s no cheaper rate if you go direct. Like I said, there has to be a broker. Well, the premium you’re paying, a small portion of that goes to me or whoever your broker is. Okay, the point behind that being a little bit over an extended period is to incentivize me or whoever your agent or broker is to keep you happy, to take care of you. So there’s a financial incentive for them to do that, which is good. But if they are no longer in the business,
there’s a good chance they still get the check, but they’re not helping you. Okay. So it’s the worst of the worst for you. It is truly buyer beware. The other thing is that when you need help increasing coverage, and most importantly, when you need help at the time of claim, if you ever need to tap into this, you can deal directly with the insurance carrier for sure. For HIPAA reasons, they’re going to send you things and communicate directly. But that’s a
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you that’s a department, that’s an 800 number like any other massive company. Your broker can be as involved as you want him or her to be. And that’s where this really matters. Advocating for you, someone who has experience doing this, making sure that you’re not getting taken to the, you know, the nightmares, you get your file and it gets taken, it gets put over here to the side and then it gets to the bottom of the pile. Who is helping moving your file up to the top of the pile? That’s what I do.
That’s what we do. We’re really good at that. We have a really good relationship with these carriers. We know the claims people. We have clients on claim. They all get paid. We’ve never had a client as of now that’s needed to hire an attorney, go to arbitration, do any kind of legal proceeding in order to get their check. If your doctor says you can’t do your specialty, you’re supposed to get paid. Well, the communication part can get muddy because it’s a very tense time for people when they’re disabled.
It is a very traumatic thing. I’ve had two separate clients that tried to navigate it on their own. I didn’t even know they were disabled. just, I don’t know why they didn’t call me. Maybe, I don’t know why. I’ve tried to figure that out, but I interviewed a client who’s on a podcast because he was one of them and he just didn’t think about it. Anyway, they went, kind of ran down the mountain on their own. They didn’t really know what they were doing.
They didn’t know who their friend was or who they should share what with and both of them got denied. Their claims got denied. They both reached out to me kind of in a panic. These are two separate, but they don’t know each other, two separate occasions. They got me involved as kind of a last minute ditch effort and I was able to get them both approved. And it wasn’t that they weren’t disabled. It was just that they is like ships passing in the night. The information it just.
There was just a breakdown. And so I interviewed, there’s a claims story on my podcast page with a client who went public with it, was able, was really happy that we got him paid. And the client or the broker is the one that can help move the needle. If something needs to be clarified, it’s going to be the broker that clears that up. So I just share that.
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If you buy your disability insurance or your life insurance from someone who is in the 90 % that isn’t going to be doing it in a while, then you really are kind of left out on your own while they continue to get paid. That’s the hard part. So buyer beware, the broker really, really matters. And you don’t want to be an orphan policy holder.
None of my clients are Lord willing, they never will be. I have a team in place, have a succession plan in place, I have experts that I work with, I’m connected to other experts. We’re kind of a tight knit community, so there aren’t many that do it at this level. So you wanna make sure that you’re working with a specialist. Message me here if you’d like to discuss further, happy to do that. 704-270-2376. Again, 704-270-2376, happy to chat with you.
Thanks for listening to the Cover Your Assets podcast, an odd 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.
