Author Archives: Billy Gwaltney

In this of Cover Your Assets episode, host Billy Gwaltney clarifies how disability insurance rates are determined, why they vary between brokers, and how to ensure you’re getting the best coverage without overpaying. Physician listeners will learn what to look for in policies and how to compare offers effectively.

Takeaways

• Insurance rates are fixed and do not vary between brokers for the same coverage.
• Always compare apples to apples; differences in coverage or riders cause rate variations.
• Beware of fluff riders and unnecessary add-ons that inflate premiums.
• The devil is in the details: coverage definitions and benefits matter most.

For more tips and advice, connect with the CYA Podcast on YouTube and visit the Professional Planning Group online. Stay up to date with Billy on Facebook and LinkedIn.

This episode of Cover Your Assets with your host Billy Gwaltney explores the eligibility rules for Guardian’s Guaranteed Standard Issue (GSI) Disability Insurance for residents and fellows, clarifying common misconceptions and providing practical guidance. 

Transcript: 

(00:01.836)

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. Welcome to today’s episode of the Cover Your Assets podcast. I’m your host, Billy Gwaltney, and as always, it’s good to be with you.

Today’s topic is what are the eligibility rules for the Guardian Guaranteed Standard Issue or GSI Disability Insurance for residents and fellows. I work with physicians across the country and one of the endorsed brokers for Guardians Guaranteed Standard Issue at a number of residency and fellowship training facilities across the country.

And it is a common question. There’s a lot of misinformation out there about how do you stay eligible, who is eligible, who isn’t eligible for it. And so we’ll cover that today. First, the key to remember is that this is the best coverage on the planet with one of the four top tier carriers that offer the best specialty coverage for physicians. And every now and then a top company will want to increase their growth.

sooner rather than later and one of the easiest ways to do that or quickest ways to do that most effective ways is to remove all of the medical screening required that’s typically required for their best coverage. And that’s what Guardian has done is called GSI, guaranteed standard issue, where they pick certain locations across the country. There’s no rhyme or reason as to how they pick them from a

you know, what would be intuitive for an average person to think about. So they pick these locations and then they say, okay, residents and fellows, if they’re in training here and they meet our guidelines, they can get our best coverage with the best definitions, the true specialty on occupation definition of disability, the enhanced partial benefit, the long-term recovery benefit, the future increase option or benefit increase rider. You ultimately can end up with 15,000 a month of

(02:18.702)

private specialty coverage and they completely waive the medical screening. In order to get this, there are a few things you have to adhere to. One is you have to currently be a resident or fellow at that facility, at that employer, and there’s no negotiating that. You can’t have been a trainee there last year. You can’t be a trainee that’s going to be there next year. It needs to be current. That’s the first thing. The second,

metric is that you cannot have applied elsewhere first. If you have applied for disability insurance with any other insurance carrier, then you are removed from eligibility for the guardian guaranteed standard issue policy. Technically, it goes back five years, I believe, but for most trainees, that means that that five-year window will not pass with you being able to say you haven’t applied in the last five years while you’re still a trainee.

So effectively, if any trainee applies with a different company, they’re just removed from eligibility. You can apply with Guardian and still have access to the guaranteed standard issue disability insurance if you’re working with an endorsed broker. That’s the key. You need to work with someone who has access to the GSI. This is a one-shot deal.

If you apply for the guaranteed standard issue or ask for it and they issue the policy and you don’t sign for it within the allotted time that they typically allow which is usually 30 days or so Then that’s it. You can’t come back and get it later So let’s say you decide in January you want to do it then you get sidetracked you forget and you’re like, well I still have

a year left of training, I’ll revisit it later, you come back in six months and want to get the GSI, you can’t do it. They won’t let you do it. So you get one window and once that window closes, that’s it. Lastly, and this is kind of the one that sneaks up on people, is that there is a knockout question. And the question reads, I wrote it down so that I can read it exactly, have you been continuously at work full-time performing the usual duties of your occupation for the past six months?

(04:43.308)

you want to check yes to that. If you have been out of work, like a day or two here or there for PTO or a sick day or a long weekend, that kind of thing is okay. Usually a week’s vacation would be okay. But if someone takes a month off to leave the country and go somewhere else, or if someone starts maternity leave or someone’s out for surgery and they come back, Guardian

reserves the right to not allow you to access the GSI. And I’ve seen situations where they won’t let you do it. And then in order to able to access it later, that answer needs to be yes. You need to allow six months to have passed since you missed a day. And so if you try to time that toward the end of your graduation, you can back yourself into a corner and not have access to the GSI because there’s not enough time for six months to pass before you graduate.

There is a grace period of 90 days after you graduate to access the GSI, but it is a hard stop at 90 days. So if you do the math on the missing work in the last six months, if someone, let’s say is out on maternity leave and they come back, they graduate in June, they’re technically finished with maternity leave in June.

They will not be able to get the GSI because they’ve got a 90 day grace period and they need six months of not missing work before they can access it. sometimes the GSI can have little bit of walking through a minefield feeling to it. And it’s because they’re waiving all of the medical screening. The only required question is, are you currently disabled? That’s essentially it.

pre-existing conditions, whether it’s diabetes or past cancer or anything, they’re going to fully cover with no medical underwriting. You get the trainee discounts. It’s the best definitions. It’s private, it’s portable, it’s non-cancellable, guaranteed renewable, which means you can walk away at any time, but the insurance company cannot. They can’t increase the rate or cancel the policy. So it is their best coverage. So they reserve the right to

(07:04.033)

to create the rules and guidelines about what it required that you have to meet in order to access the no medical screening component. There’s more to this. Perhaps for your situation, I would be happy to answer it. I went through this fairly quick, but there’s a lot of misinformation out there. So I want to put this out there so you can listen to it. And then if you want to discuss your situation, I would be happy to do that.

Feel free to message me at 704-270-2376. Again, 704-270-2376 and happy to arrange a time to chat. Thank you as always for your time. 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.

Summary:

In this episode, Billy Gwaltney delves into the complexities of disability benefits, focusing on the implications of having insufficient coverage when faced with disability. It highlights the importance of understanding policy features such as cost of living adjustments and the limitations that come into play once a person becomes disabled.

Takeaways:

• A lot of times in life, things don’t go according to plan.
• Once you’re disabled, you stay where you were in terms of benefits.
• The cost of living adjustment rider can help increase benefits over time.
• Benefits will increase starting in the second year of the claim.
• Inflation factors usually compound at around 3%.
• Understanding your policy is crucial before becoming disabled.
• You cannot bump up your coverage after becoming disabled.
• Planning ahead is essential for financial security.
• Disability benefits require careful consideration of coverage options.

Transcript:

00;00;01;23 – 00;00;19;09

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;11 – 00;00;49;07

Hello. Welcome to today’s episode of the Cover Your Assets podcast. I’m your host, Billy Gwaltney, and I’m excited about today’s topic, which is answering the question, should I increase my coverage to the maximum if I don’t need it? And that’s a really good question. It came up in a conversation with a new attending physician. I work with thousands of physicians across the country and generally start working with them, while they’re in training, and then they transition to becoming an attending with a much higher income.

00;00;49;07 – 00;01;14;03

And this particular client, he had his himself and his wife on the phone, and we were just kind of walking through the options. And based on his new income, he had, he had 5000 a month from his trainee benefit original policy. And through the benefit increase rider, he was eligible to increase to about 18,000 a month. And his initial thoughts as he was saying, hey, that that’s good.

00;01;14;06 – 00;01;41;07

I don’t think I need that much because, our overhead is very low right now. We may buy a house in the next handful of years. But we haven’t bought one yet. And so is it possible? Is it doable to increase, maybe by half way, and then revisit it in the future and increase further once we have a bigger mortgage and our expenses are higher?

00;01;41;10 – 00;02;01;19

It’s a very reasonable question to ask for someone who’s planning, their future, and I thought was. So to answer that question the first thing, and I thought I would bring it here to a podcast to to chat about it, because it does come up more than once, like, okay, if if this is the max, how much do I really need?

00;02;01;21 – 00;02;25;09

And so a few thoughts on that. One is the benefit increase rider. If you have that on your policy, it does require you to increase by at least 50% of the additional eligible benefit that you that you can buy. So if you had 5000 a month and let’s say you’re eligible for 15,000 a month, then you would at least need to increase up to 10,000 if you increase at all.

00;02;25;09 – 00;02;48;01

Okay. In order to keep the benefit increase rider on the policy, if you increase to something less than 10,000, then they would take the benefit increase rider off the policy. So again, check your contract to be sure. I’d be happy to chat with you about it if you wanted to. But those are the kind of the guidelines that that most people are thinking about.

00;02;48;01 – 00;03;06;26

So I shared that with this client, and, and they were like, okay, we we were thinking about halfway anyway. And I said, well, that’s certainly an option. You can do that. That is doable. I said, but as your insurance advisor, I just want to make sure you’re aware of what happens if you actually need to file a claim.

00;03;06;26 – 00;03;29;27

Okay. So your plan works great if you don’t need to file a claim, like if if things go according to plan, then then do that plan all day. But a lot of times in life things don’t go according to plan. So the question will become, what happens if you’re disabled and you have a lesser benefit? Because once you’re disabled, you cannot increase coverage after that point.

00;03;29;27 – 00;03;56;20

So if you don’t have the maximum, and you become disabled, your you stay where you were. Now, if you have the cost of living adjustment rider on your policy, that benefit will increase starting in the second year of the claim and each year thereafter by the inflation factor, usually 3%. And it would compound, but once you’re disabled, if you had, 12,000 a month and you were eligible for 18,000, you can’t then bump up to 18.

00;03;56;26 – 00;04;20;25

Okay. The second thing to keep in mind is that expenses go up during a claim, at least statistically speaking. As for medical care, for rehabilitation services, trying to just figure out life medications, expenses are going to go up. Almost always. So it’s not like your, your budget, stays the same. It actually takes a hit and goes up.

00;04;20;27 – 00;04;46;04

The next thing to keep in mind is that you may never go back to earning the income you were making before. You may stay disabled for the full benefit period to age 65, or whatever your benefit period is. And you still need to save for retirement. People on claim again, most disabilities are not catastrophic, so life expectancy is still similar to what it would be for someone who wasn’t disabled.

00;04;46;04 – 00;05;06;11

If you hurt your back, you know that if you, maybe if you’re not exercising as much and you don’t eat well, then then your life expectancy would be shorter. But in a lot of cases, you’ll still live well into the normal retirement years. And so you need to save enough for retirement. You need to have enough disability benefit to still fund that.

00;05;06;14 – 00;05;26;10

Also, hopefully you still are able to do some things if you do your again, if you do your disability insurance correctly to still send your children to the school you want to send them to, to still take some vacations, to still have a lifestyle, that you’ve started to get accustomed to as an attending as your income is expanded.

00;05;26;13 – 00;05;49;18

And so as I discussed it with this, with this client and his spouse, you could just see the light bulb coming on, going, okay, okay, okay. Okay. So yeah, it they actually mentioned that sounds like it might be Pennywise and Dollar foolish. And I was like, yeah, I couldn’t have said it better. I would say Pennywise and Dollar not so wise.

00;05;49;18 – 00;06;08;19

Okay. A little more politely, but their response was a good response. I thought I would say this whether I’m the broker or not, it’s not about me somehow. Making more money because you buy more insurance. So of course that would happen. The broker gets paid a small percentage of the premium. You pay for the life of the policy.

00;06;08;21 – 00;06;30;13

The point and behind that is to incentivize me to to treat you well. One of the things to treat you well about, or regarding is making sure you have enough. We do have clients on claim. Okay. We do. They were all healthy enough to get the insurance when they got it. The only complaint we’ve ever gotten from anyone on claim is they should have had the max.

00;06;30;15 – 00;06;49;26

Okay. And I have one client in mine in particular, who was a young physician. She got disabled. Never thought she would need it. She had not increased from the trainee benefit. Even, and and she was like, that was a gut punch. And, the first thing she did when she recovered quickly, she was out for two years.

00;06;49;26 – 00;07;09;08

But when she recovered, she bounced back her income bounced back, and she was eligible to increase. And she did that stat right away. The first thing she did was increase to the max. And she has stayed at the max sense because she knows the way the policy works is that if she she had cancer or she gets it again, she’s going to get that higher benefit.

00;07;09;11 – 00;07;28;04

She did some really good planning. And so, as a disability specialist, as an advisor, I have a, I have an obligation to make sure it’s on the record that you consider the maximum. I cannot be the one that’s going to explain to your family why I didn’t tell you. You should have bought the maximum. Just not going to do it.

00;07;28;06 – 00;07;52;18

I’m not going to answer that question. So my job, if you want to work with me is to make sure you consider it. And then also, you know, make sure you understand that it’s ultimately your call. I’m not. I’m not you. I think one of the, one of the things that that, has become apparent to some clients is that, the money that they’re saving by not getting the maximum sits in their checking account.

00;07;52;18 – 00;08;26;21

Anyway, there’s this idea that, oh, I can invest that and do better. Well, first of all, if you’re disabled, you can pay this premium for 25 years and be disabled. And and if you collect for one year of a claim, you will win financially. You clobber the insurance carrier if you’re disabled. Okay. The second thing is that most people do not fully invest all their income to the point where they’re literally going to take that last 300 or $500 a month that they’re not paying in disability premiums and allocate it to a mutual fund.

00;08;26;23 – 00;08;54;11

It’s going to sit in the checking account doing nothing, earning nothing. So why not allocate it towards something that is protecting your most important asset, which is your ability to make a really good income over the long term. Your most valuable asset will always be you, doctor Smith. Doctor. Tom. Doctor. Sarah, you’re. That is your most important asset.

00;08;54;11 – 00;09;24;05

It’s not going to be your home. It’s not your investment portfolio. It’s not your retirement account. It’s your ability to generate a monthly income every two weeks or twice a month or once a month, whenever you get paid, that your family counts on. And so ensuring that is just smart business. So don’t don’t be penny wise and dollar not so wise by letting that $200 that you’re saving by not getting the max, just sit in a checking account doing nothing while your family’s exposed.

00;09;24;05 – 00;09;52;13

And then if you get disabled, you’ll regret it. There’s a there’s a high likelihood you’ll regret it. So obviously your decision. Food for thought I’d be happy to discuss your situation in more detail if you’d like. Please, text me (704) 270-2376 again. (704) 270-2376 And until next time, thank you for carving out a few minutes.

00;09;52;13 – 00;10;13;13

I’m grateful for that. Yeah. I look forward to seeing you next time. 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. For more tips and advice, visit the website and YouTube channel. Check the show notes for links.

00;10;13;17 – 00;10;21;21

Join us next time for another episode dedicated to helping physicians like you get your disability insurance right and protect your way of life.

In this episode, Billy Gwaltney discusses the implications of canceling a disability insurance policy, emphasizing that while it is possible to cancel, it is not advisable. He highlights the importance of maintaining such coverage for financial security in case of disability, arguing that the money saved from canceling is often not invested wisely and may not provide the same level of protection as the insurance policy itself.

Takeaways: 

• You can cancel your policy, but it’s not advisable.
• Savings from cancellation often sit idle in checking accounts.
• Investing last savings is not common for most people.
• Disability coverage is crucial for financial protection.
• Insurance companies can profit from your premiums, but so can you.
• Having a private disability policy is a smart decision.
• If disabled, you’ll appreciate having the coverage.
• The money saved from cancellation does little for you.
• Insurance provides peace of mind during uncertain times.
• Prioritize protecting yourself with the right insurance.

Transcript:

00;00;01;23 – 00;00;18;29

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;01 – 00;00;47;19

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, as always. Today’s question is one that came up, from a client not long ago, which is, is it okay to cancel my private specialty disability policy? That’s an interesting question. They’ve been an attending for a while, so there are, probably innumerable a number of things that were, coming across their mind to trigger that question.

00;00;47;19 – 00;01;07;29

And so we had a discussion and just want to, kind of go through some of that with you here today. So is it okay to cancel your disability policy? Well, first, walking away is certainly an option. This is not a mortgage. Your private specialty policy, as long as you pay the premium. The insurance carrier cannot walk away.

00;01;08;00 – 00;01;29;21

They can’t cancel it. They can’t change anything. They can’t raise your rate. You, however, as a policy holder, can walk away. By simply not paying the premium. There’s no penalty for that. It doesn’t hit your credit. There’s no noth nothing there. But it is a once in forever kind of decision. So some things you want to consider before you do it.

00;01;29;21 – 00;01;49;10

Because once you do it, you can’t undo it. You would have to start over if you wanted coverage later with new medical underwriting, the training discounts wouldn’t be there if you’re no longer a trainee. And it can just be more complicated than you. Than you might think. So, few things to consider that I shared with my client.

00;01;49;10 – 00;02;12;23

And, I want to share with you. I work with thousands of physicians across the country that are, each of our client has their own unique situation that they’re thinking about and kind of, navigating life, from a financial standpoint and family standpoint. And so, walking away or canceling a disability policy, does have some pitfalls to it.

00;02;12;26 – 00;02;38;14

One the first one is that most people’s health does not improve as they get older, as we age. Maybe our health stays the same, at least for a while. But very often it’s going to decline over time. We just get weaker, more brittle. We break easier. We have illnesses. You as a physician, you know that. And so, it’s safe to say that our health doesn’t usually improve as we get older.

00;02;38;16 – 00;02;57;06

Okay, so the chances of a disability for someone in their 50s is essentially the same as someone in their 30s or 40s. So just because you’re not running as much or working out as as aggressively or, or may be traveling as much or whatever the scenario might be as you get older thinking that you don’t need this stuff.

00;02;57;08 – 00;03;22;27

Statistically, that doesn’t bear out. The second thing to consider is that self-insured, which is what you’re doing if you don’t have private insurance, you’re just going to use your own assets from yourself to cover any expenses. They call that self-insurance. From a financial standpoint, it’s absolutely brutal during a time of a claim. It, there are several reasons why.

00;03;23;00 – 00;03;47;25

One is expenses. Go up during a claim, to, most people’s assets as they build assets over the course of their, their career. Not all, but a significant percentage of those assets are in retirement accounts that are tax advantaged, which means they have penalties if you take them out too soon. There are taxes when you take them out.

00;03;47;28 – 00;04;08;13

And if you sell at a time when the market is down or, or fluctuating, you can end up walking away with less money than had you not had to sell. Also real estate and other assets, if you’re liquidating those assets, there can be penalties and, and anything we do in a hurry can lead to some unwise decisions.

00;04;08;16 – 00;04;33;13

And so you’re talking about taking assets that oftentimes are taxed oftentimes or penalized depending on the market conditions, can be sold for a loss or at a lower value than otherwise they would have been. And then using that money to pay expenses that are increasing, compared to insurance where it is specifically designed to cover those expenses.

00;04;33;16 – 00;05;05;14

The benefits are typically received without tax from if you’re talking about private specialty disability coverage, if the premium is paid with after tax funds, then the benefit is received without tax. And it’s also systematic. It shows up on the same day every month. You know, the amount, you can plan on it, you can budget around it and so, if you’ve done the planning properly, then hopefully you have enough insurance to still fund retirement to take care of medical expenses, hopefully.

00;05;05;16 – 00;05;25;29

And to, to allow you to not have to tap into those assets that you spent a lot of time building up. And not have to be penalized and accept more money or accept less money than you would have otherwise been able to get had you been able to ride it out, to use it when you had planned on using it originally?

00;05;26;02 – 00;05;51;14

The next thing is that, when it comes to your asset, when we think about assets, your most important asset, your most valuable asset, is not your retirement account. It’s not your house. It’s not your real estate portfolio. It is you. It is your ability as, surgeon, radiologist, pediatrician, whatever your specialty is, your ability to to get out of bed and go perform at a high level.

00;05;51;16 – 00;06;20;27

The specialty that your employer’s paying you a good wage to do. And your family has gotten used to getting a paycheck from this asset. From a financial standpoint, every two weeks or every twice a month or monthly, however frequently you get paid. And that is your most important asset if you do, an analysis, of determining the value of that asset over the entirety of your career, it’s a big number.

00;06;20;29 – 00;06;43;07

So ensuring your most valuable asset is just smart business. I mean, if you talk to Warren Buffett, if you talk to, anybody. This this made a lot of money, in business or those kind of things. If you say, do you insure your most valuable assets? And they would say, absolutely. The smart ones would. Warren Buffett liked it so much that he bought an insurance company, Berkshire.

00;06;43;09 – 00;07;05;27

Because he believes that much in insurance. He doesn’t need the insurance from a financial standpoint, necessarily, but it’s just smart to take pennies, to pay dollars to cover expenses versus taking a dollar or more to to try to pay that dollar when you’re self insuring. So, there are a number of things to factor into this.

00;07;05;29 – 00;07;36;25

Another thing that a lot of people will tend to assume if they’re thinking about getting rid of their insurance, is that they just basically don’t think they’re ever going to need it. And so why waste the money? And that hopefully it is wasted money. Hopefully you don’t need it. But if you do, all of our clients that are on claim were healthy enough, or at least healthy ish, healthy enough to get the insurance when they got it, okay, they never thought they would need it, but they ended up using it.

00;07;36;28 – 00;08;00;13

Over 90% of claims are illness is not injury, so it’s usually not the catastrophic car accident that does it. Although those things certainly happen statistically over 90% or illnesses, the biggest percentage are musculoskeletal conditions. So you hurt your back, you can’t get out of bed, you can do telemedicine, but you can’t do your day to day duties that you were doing before you hurt your back.

00;08;00;16 – 00;08;20;17

So are you now disabled? If you’ve done your disability insurance correctly and you have the true specialty coverage with one of the top four carriers, then then you are going to get paid. If your doctor says you can’t do your specialty because of that injury or illness, and then you have the freedom to go earn money doing something different.

00;08;20;20 – 00;08;43;12

It is very naive, at best. Putting it mildly, to assume that if you can’t do surgery, you could just do clinic and still make as much money. Or if you can’t do interventional cardiology, you could just slot in and be a general cardiologist because the only disability is going to occur to you is you’re going to chop off your hand, that statistically, that’s not what happens.

00;08;43;15 – 00;09;08;01

We do have clients that earn money doing other things while their own claim, because they have the freedom to do it and it doesn’t impact their disability benefit, but none of them ever did it right away. When a disability occurs, it is a gut punch. It takes time, months, sometimes years before someone can maneuver enough to be able to go do something else and earn income.

00;09;08;03 – 00;09;33;13

It is it is incredibly valuable to have a disability policy that gives you the freedom to go do that. And doesn’t require you to do that. But if your expectation is that if a disability occurs, you can just go do something else in medicine, again, that’s naive at best. Some might call it foolish. It’s just not, an advisable approach when it comes to the security of your family.

00;09;33;13 – 00;09;54;16

And when it comes to just smart business, which is insuring your most important asset. Again, we have clients on claim. The good news is that every single one of our clients on claim has gotten paid. We’ve never had, you know, we don’t have any clients who have had to hire an attorney. We had none that we’re in some kind of arbitration.

00;09;54;16 – 00;10;16;29

They all get paid. The majority of them never get paid from their employer policy. So again, another fallacy can be, well, I don’t need my private policy because I’m now at an employer that has a policy. The chances of getting paid from that are, are are not nearly as high as from your private policy. I can’t overstate that.

00;10;16;29 – 00;10;40;00

I’ve done a dozen podcast on the gaps in employer group long term disability policies. They just don’t pay out, in the majority of claims. And if they do pay out, they’re going to fight you tooth and nail. You will likely need to lawyer up. You will likely need to stay on top of that because they’re going to they’re going to require you to jump through hoop after hoop after hoop.

00;10;40;03 – 00;11;03;27

We’ve seen it up close. And so counting on an employer policy to, to help you if you’re disabled and be the only thing you rely on. Again, it’s just not it is it’s not smart business. Private specialty coverage. If you’re planning a doesn’t work out, which is you have a long, successful career, hopefully that is what happens.

00;11;03;29 – 00;11;33;11

But if that doesn’t work out, your plan B needs to be really strong. And the strongest plan B is a well designed private specialty disability policy. Then the assets you’ve accumulated can continue to be utilized for what they’re originally intended for, which is retirement. Other things that you want to do. So the only complaint we’ve ever gotten from a client, this on claim is they should have had the maximum because their expenses did go up.

00;11;33;13 – 00;11;54;23

Expenses do go up. We have had, one client in particular who didn’t have the maximum. She was disabled for two years, had, was healthy as a healthy as, as could be, never bothered to increase her coverage. Got, cancer, significant cancer. She bounced back from it because she was very healthy. She went back to work.

00;11;54;23 – 00;12;18;24

And the first thing she did when she was eligible to do it was increase her coverage to the max. And, if you’ve done your policy correctly, you’ll still be able to do that, but you can’t increase want your own claim. So that’s why you got to make sure that you have your policy in place and then have the maximum coverage before the claim occurs so that you’re not, stuck with a oh type of scenario.

00;12;18;26 – 00;12;42;22

So bottom line, can you cancel your policy? Yes. Is it advisable to cancel your policy? No. I haven’t seen a scenario yet where it made sense even. And last thing I’ll say, even if you do cancel your policy, the 2 or 3 or $400 or 500, whatever it is that you’re saving. That’s likely just going to sit in your checking account anyway.

00;12;42;25 – 00;13;04;11

Okay. It’s not like I mean, you can say, well, I’m going to invest it. Well, most people don’t invest their last $300 in their checking account. Okay. So if you have whatever you have in your checking account, the money that was going to pay for the disability coverage is just sitting there literally doing nothing. Versus yes, the insurance company has it.

00;13;04;11 – 00;13;25;15

They can make a profit on it. Yes, the disability broker gets a small percentage of that. But I would say this, whether I’m the broker or not, pay for the private disability policy. Let it do what it’s supposed to do. You won’t regret it. If you’re disabled, you will realize that it’s. It was the best, smartest thing you did from a standpoint of protecting yourself.

00;13;25;17 – 00;13;47;05

And I do hope all my clients don’t need it. I hope you end up at 65 going, well. I just wasted that money. But if you’ve if you’ve planned correctly, I doubt it’s going to keep you from retiring. It’s not going to it’s not going to affect where your kids go to college. So just do the smart thing and keep it, take it for what it’s worth, I hope you found this helpful.

00;13;47;05 – 00;14;12;10

I would be happy to discuss your situation in more detail. I love doing that. Feel free to text me at (704) 270-2376. Again. 704 2702376. Hope you found this helpful. Looking forward to talking with you on the next episode. Thank you, as always for your time. Thanks for listening to the Cover Your Access podcast and Art conduit media production.

00;14;12;17 – 00;14;32;14

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.

In this episode of Cover Your Assets, Billy Gwaltney explores the concept of terminal illness riders in life insurance policies, detailing how they allow policyholders to access a portion of their death benefits while still alive. The discussion highlights the benefits of having such a rider, including the potential tax implications and the conditions under which these benefits can be accessed.

Takeaways:

• A terminal illness rider allows access to death benefits early.
• You can accelerate up to 90% of the death benefit.
• There is usually a cap of 1.5 million on accelerated benefits.
• The benefits may be taxable depending on the situation.
• Having a terminal illness rider is often a no-brainer.
• You can tap into the death benefit while alive.
• The rider is included at no extra charge.
• Terminal illness is defined as having a life expectancy of 12 months or less.
• You don’t have to use the rider, but it’s worth considering.
• This rider can provide financial support during critical times.

Transcript:

00:00:01:18 – 00:00:19:20

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.

00:00:19:22 – 00:00:45:01

Welcome to this episode of the Cover Your Assets podcast. I’m your host, Billy Gwaltney. And as always, it’s good to be with you today. Today, we’re going to talk about two riders that come with, term life policies. The terminal illness rider and the conversion extension rider. And answer the question of are these important? The bottom line answer is yes, they’re important.

00:00:45:02 – 00:01:09:01

I work with thousands of physicians, helping them secure their private specialty disability coverage. And I end up helping most of our clients with life insurance just because the medical screening and the process and the underwriting and all that is so similar. And for our clients that that get term life policies, these two riders are, typically included in their policies.

00:01:09:03 – 00:01:30:08

And I want to read what they mean and then just offer a brief, synopsis of that or summary of that, as to why it’s important, for, term life policy to have a terminal illness rider, it means that you can accelerate a portion of your death benefit up to 90% of the death benefit. There’s usually a cap.

00:01:30:08 – 00:01:57:19

It’s like 1.5 million, whichever is less than 90% or the 1.5 million, for a terminal illness prior to death. Terminal illness assumes your life expectancy is 12 months or less. The accelerated benefits may be taxable. Depends on the situation. And there’s no additional charge to the term life policy for this rider unless it’s utilized. So it just is on the policy at no extra charge.

00:01:57:20 – 00:02:18:07

It’s kind of a no brainer to have this added so that you could tap into the death benefit while you’re still alive for a terminal illness without having to wait until the death benefit is paid. Could come in handy. You don’t have to use it, but it’s it’s at least worth including, the second riders called the conversion extension rider.

00:02:18:09 – 00:02:56:23

And this allows the insurer to extend the conversion period of their term policy to the end of the policy of the level term period or until the policy anniversary nearest their 70th birthday, whichever comes first. So if you have a ten, 20 or 30 year level term policy, what’s important, a valuable asset to include in your term life policy is the ability, the freedom to switch or convert to a permanent life insurance policy, like a whole life policy or universal life policy, or indexed policy.

00:02:57:01 – 00:03:18:06

Without having to redo any of the medical screening. Okay. So at any point during that term period, you can convert or switch to one of these permanent life policies without having to redo the medical screen. Now someone may you may buy your term policy and have no inclination or interest in doing that. But plans change, and people’s health changes.

00:03:18:08 – 00:03:45:14

And if you get toward the latter half of the term period and you your health has changed and now you’re uninsurable, which we’ve had happen. All of a sudden, having the ability to keep life insurance longer can become important. And if you don’t have a conversion feature on your term policy, which most of them chop shop kind of bottom feeder, the cheapest of the online quote engines typically do not have that.

00:03:45:16 – 00:04:06:18

If you have a quality term life policy, that might be, my clients don’t pay, a lot more, if any more than they do. For the compared to the least expensive options, especially in the top tier carriers. Ameritas is very competitive in that way from a cost standpoint, which is who we do most of our term policies with.

00:04:06:20 – 00:04:26:06

But having the ability to switch to a permanent life policy can be important. This rider does have a fee attached to it. It’s usually, 5 to $10 a month, depending on, depending on the cost of the policy and the, the amount of the death benefit. But it is a vital feature to have. It’s not required to have it.

00:04:26:06 – 00:04:48:02

You can remove it if you want to. It’s not advisable to remove it. It’s just not worth that. Money’s just going to sit in your checking account anyway. Typically. And I’m not saying you want to be nickel and dime to death. That’s not the point. This is a valuable feature to have. It’s an asset. Having the ability or the freedom to switch or pivot.

00:04:48:04 – 00:05:11:03

If your life, if your plans change or your life has an unexpected event. And you want to keep coverage longer, and you otherwise will not be able to keep it beyond the ten years or the 20 years or the 30 years, unless you have this conversion feature. It’s a it’s a valuable asset to keep, in your pocket for future use if you want it.

00:05:11:06 – 00:05:37:09

Okay. So, just food for thought. Your decision. Of course. A word to the wise, to not be penny wise and dollar not so wise. Let me know what you think. Would be happy to discuss your situation. Feel free to text me at (704) 270-2376. Again. (704) 270-2376. Thank you as always for your time.

00:05:37:11 – 00:06:01:03

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.

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.

In this episode, Billy Gwaltney discusses the various insurance coverage options available for residents, emphasizing the benefits of starting with lower coverage amounts. He explains how residents can secure significant benefits and privileges even with minimal initial coverage, making it a financially savvy choice as they transition into their attending roles.

Takeaways: 

• Residents can buy up to $7,500 of coverage while in training.
• Starting with lower coverage means lower costs.
• You still receive the same benefits as higher policies.
• Benefit increase riders allow for future coverage scaling.
• Budget-friendly options are available for residents.
• Strong specialty occupation definitions apply regardless of coverage amount.
• Financial planning is crucial for transitioning to attending roles.
• Lower initial costs do not compromise on benefits.
• Residents should consider their long-term insurance needs early.
• Insurance options can be tailored to fit budget constraints.

In this episode, Billy Gwaltney discusses the emotional and financial challenges faced by individuals who become disabled. He emphasizes the importance of having a solid financial plan in place to support families during difficult times, highlighting the need for contingency planning and the emotional toll of realizing one’s disability.

Takeaways:

• When people become disabled, it is a highly emotional time.
• The reality hits that they’re not going to be able to work.
• The most important thing becomes financial security.
• Paying the bills is a primary concern.
• Having a strong plan B is vital.
• Protecting your family in the worst case is crucial.
• Emotional support is essential during this transition.
• Financial planning should be prioritized alongside health.
• Contingency plans can alleviate stress for families.
• Understanding the emotional impact can guide better support.