This article is sponsored by Set for Life Insurance, helping over 30,000 physicians with life and disability insurance needs since 1993. Get the best available policies at discounted rates. Request a quote today.
Physicians understand the importance of disability insurance. Your ability to practice medicine and produce an income is your most valuable asset. However, many doctors unknowingly put themselves at financial risk by assuming that all insurance professionals offer the same level of expertise and service. The truth is, there is a crucial difference between an insurance agent and an experienced independent broker, and this distinction could impact the quality and cost-effectiveness of your policy.
The agent vs. the broker: Understanding the difference
When purchasing disability insurance, you are likely to encounter two types of professionals: captive agents and independent brokers. While both sell insurance, their motivations and options differ significantly.
- Captive agents: These professionals work for a single insurance company and can only sell that company’s policies. Some claim they can write policies for other companies, but they have a financial incentive to write business with their employer. Their primary goal is to sell you a policy from their company, regardless of whether it is the best fit for your needs.
- Independent brokers: These professionals have access to multiple insurance carriers and can shop around to find the best policy tailored to your individual situation. Because they are not tied to one company, they can objectively compare features, pricing, and policy terms.
Many physicians work with an agent without realizing that they may not be getting the most optimized policy. This can lead to policies without discounts, suboptimal definitions of disability, and a lack of flexibility in coverage options.
The value of comparing options
- Policy optimization
Captive agents are restricted to selling only one company’s policies, meaning they may try to fit you into a plan that is not the best match for your career, specialty, or future earning potential. Independent brokers, on the other hand, have access to multiple policies, ensuring you get the best terms available at the optimal price. - Access to discounts
Some insurance carriers offer discounts based on your employer, medical association membership, or training status. An independent broker can identify and apply these discounts, potentially saving you thousands over the life of your policy. - Optimized definition of disability
The definition of disability in your policy determines whether you will receive benefits if you can no longer perform your medical specialty. Independent brokers can compare policies to ensure you receive a true own-occupation definition, which may not always be included in policies offered by captive agents. Even own-occupation definitions of disability can vary, so it is important to ensure you have the policy that is most suitable for your needs. - Underwriting variations
When you apply for an individual disability policy, you must undergo medical underwriting. Some companies are stricter than others, and an independent broker may assist you in choosing the policy that provides the most favorable offer.
Real-world examples: agent vs. broker
- Case 1: The unoptimized policy
A young anesthesiologist purchased a disability insurance policy through an agent at her residency hospital. She later learned from an independent broker that she could have received the same coverage with a significant discount and a better definition of disability. Over the life of her career, this could have saved her thousands of dollars and provided better protection. - Case 2: The medical exclusion
A surgeon purchased disability insurance early in his career from an agent representing one company. He had once gone to the emergency room due to dehydration and had passed out. Later, when he applied for a policy with a captive agent, the company declined him and would not offer coverage. Had he worked with a seasoned independent broker, he could have had someone advocate for him and apply with a company that was more reasonable in this situation. - Case 3: Policy limits
Most individual disability companies limit the amount of benefit on an individual policy to $20,000 per month. If you purchase benefits from more than one company, you will be able to aggregate your benefits up to $35,000 per month in the future. If you purchased your policy with a captive agent and had high-income potential, you might hit your maximum level of coverage. If you later wish to purchase more, you will need to add a separate company.Example: An ophthalmologist purchased an individual policy in residency from a captive agent. A few years later, they hit the maximum benefit amount on the policy of $20,000 per month. They wanted to purchase additional benefits but had since developed an adverse medical condition and were unable to fully insure themselves. If they had worked with an independent broker, they could have initially purchased benefits with more than one company, allowing them to increase up to $35,000 per month in the future without any further medical questions asked.
How to choose the right disability insurance professional
Here are some key considerations:
- Ask about their carrier options
- If they can only sell policies from one company, they are a captive agent.
- If they work with multiple insurers and compare policies for you, they are an independent broker.
- If they insist that one company is significantly better than the rest, they are likely a captive agent without full disclosure.
- Look for specialization in physician disability insurance
The needs of a physician can differ from those of other professionals. Look for a broker who specializes in working with doctors and understands the nuances of own-occupation coverage. - Request a policy comparison
A good broker will present multiple options, highlighting the pros and cons of each policy. By comparing policies side by side, you can select the most optimal policy with full information available. - Inquire about discounts and future flexibility
Your policy should be flexible enough to grow with your career and remain portable if you change jobs. Ask about future increases and the policy’s coverage limits.
The advantage of the independent broker
Physicians dedicate years of training and hard work to their careers, and protecting that investment with disability insurance is essential. However, choosing the right insurance professional is just as critical as getting the right coverage. Working with an independent broker instead of a captive agent ensures that you receive the most optimized policy at the best price, with the flexibility to adapt as your career evolves.
Before committing to a policy, take the time to compare your options. A broker can provide the guidance needed to make an informed decision, potentially saving you thousands and ensuring your income is truly protected. Do not leave your financial future in the hands of an agent who has limited options. Choose a partner who works for you, not the insurance company.
Jamie Fleischner is founder and president, Set for Life Insurance.
Nationally recognized Set for Life Insurance has helped over 30,000 physicians with their life and disability insurance needs since 1993. Get the best available policies at discounted rates. Request a quote today.
