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This article is sponsored by Set for Life Insurance.
We have a special sponsored episode from Set for Life Insurance. Joining us today is Jamie Fleischner. She is the founder and president of Set for Life Insurance. With over 32 years of experience in the industry, Jamie has helped countless clients protect themselves from life’s biggest risks.
In this episode, we dive into why disability insurance is an essential safeguard for physicians—not just an optional add-on. Jamie guest breaks down the biggest mistakes doctors make when choosing coverage and how to avoid them. Learn why working with an independent broker gives you the best options and how to secure exclusive discounts through GSI – or Guaranteed Standard Issue – policies as a resident.
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Transcript
Kevin Pho: Hi, and welcome to the show, where we share the stories of the many who intersect with our health care system but are rarely heard from. Subscribe at KevinMD.com/podcast. Today we have a special sponsored episode from Set for Life Insurance. Joining us today is Jamie Fleischner. She is the founder and president of Set for Life Insurance. With over thirty-two years of experience in the industry, Jamie has helped countless clients protect themselves from life’s biggest risks. In this episode, we dive into why disability insurance is an essential safeguard for physicians, not just an optional add-on. Jamie will break down the biggest mistakes doctors can make when choosing coverage and how to avoid them. Learn why working with an independent broker gives you the best options and how to secure exclusive discounts through GSI, or guaranteed standard issue, policies as a resident. Find out more at setforlifeinsurance.com. That’s all one word, setforlifeinsurance.com. The link will be in the show notes. Jamie, welcome to the show.
Jamie Fleischner: Thanks for having me.
Kevin Pho: All right. So physicians, we’re trained to take care of others, but many neglect their own financial security. Why is disability insurance so critical?
Jamie Fleischner: The reason it’s so important is because every financial decision is based on your ability to produce an income. So when you’re thinking about all your hopes and your dreams, your retirement, or buying a house, or any financial decision you make, it’s all dependent on your ability to produce that income. So if you become sick or injured and your income stops, how are you going to be able to support yourself and to take care of all of your finances? So it’s really foundational to all financial planning.
And statistically speaking, there’s about a one-in-four chance that at some time in your career you will have some kind of disability, sickness, or an injury that will preclude you from being able to work. So it is critical to make sure that your income is protected. It’s really your largest asset.
Kevin Pho: And physicians, we always get a lot of information when it comes to the various options for disability insurance. What do you think is the biggest misconception doctors have about disability insurance?
Jamie Fleischner: I think the biggest misconception that physicians have is thinking that they’re taken care of through their employer. They think, “OK, well, I’m signing up for an employer. I’m working at a big hospital or a large private practice. My employer is going to take care of me. I really don’t need any independent insurance.” And that’s a really big misconception, for several reasons.
One, most physicians don’t stay with one employer throughout their career. So if you only have your employer plan and you go to leave, and maybe start your own practice or go to a place that doesn’t have disability insurance, you then need to go out and get your own insurance. You might be older, you might have health issues, and you may not be able to get it. So that’s one of the problems with a group policy. That policy can’t go with you.
Number two, a group policy is really going to cover more catastrophic types of illnesses or injuries. So what their definition says is, if you’re totally disabled, not working, we’re going to pay you a benefit, usually 60 percent of your income up to a certain amount. It’s taxable, but you can’t go work elsewhere, depending on the policy. So it is limiting, and the reason it’s limiting is because they can’t ask everybody questions. They can’t individually select. So it’s just sort of a generic policy for everybody.
So the biggest problem that a lot of people make is thinking, “I don’t need my own individual disability insurance. I have it through my employer.” But what’s really the proper thing to do is to supplement what you have through your group with an individual policy. So an individual policy is portable, so if you ever leave your group, you can take it with you. Number two, it’s more comprehensive, because if you become sick or injured and can’t work in your specialty, it’s going to pay you a benefit even if you go work in another specialty or occupation. And number three, it’s nontaxable. So it really bridges the gap between what an employer policy will provide and what you’re used to taking home, to be able to maintain your financial situation if something happens.
Kevin Pho: So what’s the difference between a disability insurance policy that’s own occupation and other policies, and why does that distinction matter so much for doctors?
Jamie Fleischner: So the most important part of any insurance policy is policy language, contract language, because this is how the insurance company is going to determine whether or not they’re going to file or pay for a claim. And so the reason own occupation specifically is so important, especially for physicians, is because physicians tend to be very specialized now. And so if you think about it, if you’re a surgeon or you’re doing something very specialized and something happens and you can’t do that specialty, that’s what you’re trained to do.
So again, we’ve had a lot of physicians that get arthritis or carpal tunnel, or they injure their hands. They can’t do surgery. They want to make sure that they’re being paid. They don’t want to be told by an insurance company, “You know what? We think you can go do something else. You can just go retrain, do internal medicine, go do research.” They want to be paid for what they were trained to do. So with an own-occupation policy, if they can’t do surgery, they’re going to get paid their benefits even if they do pivot. Let’s say they do research, or teach, or do some other specialty; anything elsewhere will not take away from their policy.
If you don’t have that policy language in the policy, you run the risk of an insurance company determining what they think you’re capable of doing based on your education and your experience. And as a physician, you’re very well educated, so you don’t want to be at the whim of an insurance company telling you, “You’re smart. We think you can do X, Y, or Z,” or, “You’re only doing that many procedures. We think you’re capable of doing more. We’re not going to pay.” So it really covers you properly in that regard.
Kevin Pho: Now, can physicians with preexisting conditions still get disability insurance, and if so, what kind of options are available?
Jamie Fleischner: So when you apply for a disability insurance policy, you do have to go through medical underwriting. So they will ask you, head to toe, last ten years, about your medical history. And so you answer the questions. If you’ve had any kind of medical history, or you’re currently being treated for something, they will request information from your doctors to gather more information to determine whether or not that’s going to be covered.
So let’s say you had knee surgery two years ago. You go and apply for a disability policy. Chances are they’re not going to cover that specific knee, just because it’s considered preexisting. They might say, “Once you’ve been treatment-free for five years, then we’re going to cover you.” So that’s something to consider. So they will look at everything and determine whether or not they’re going to cover any of those preexisting conditions.
Now, one of the things that you had mentioned during the introduction is something that’s relatively new that’s come out, that’s called guaranteed standard issue. And this is something that only a few select agents in the country have access to, and it’s at some hospitals around the country for residents. And what it allows residents to do is to buy a policy, no medical questions asked. So you don’t even have to disclose you had the knee surgery or that you’re currently being treated for mental health issues or anything else. So it’s great: no medical questions asked. But again, it’s only at select hospitals. There are still the discounted rates. It’s still own occupation.
One of the catches, though, is if you go and apply elsewhere. Let’s say you go through another agent and you apply for a policy and you get that knee exclusion, and you say, “Huh, now I found out we have a guaranteed standard issue policy.” If you then go apply for the guaranteed standard issue policy, you’re voided. You cannot qualify for the benefits if you’ve had any kind of exclusions or a decline elsewhere. So it’s really important to first find out if you have that as an option, and if you apply there first, then if you think you need additional coverage, you can apply elsewhere.
Kevin Pho: Are there red flags to watch out for when shopping for a disability insurance policy?
Jamie Fleischner: There are some red flags. So it’s really important, I think, if you’re shopping around, to work with somebody who’s independent, as opposed to an agent. So an agent is somebody who works for a company and has a financial incentive to only write that policy. And so they’re going to tell you all the great things about that one company, which may or may not be in the client’s best interest, or may not be the most cost-effective. If you work with somebody who’s objective, like a broker, like we are, we’ll shop it around. We’ll look at all of the available options.
So I look at it similarly: You’re going to look for a car, and you go to an Audi dealership, and they’re going to tell you all the best things about Audi, which is a great car, but maybe the Mercedes or the Lexus or something else might be a better fit for what you’re looking for. So it’s good to be able to shop it around. So if somebody tells you that one policy supersedes all the rest, that could be a red flag, except, again, if it’s that guaranteed standard issue, where it might be in your best interest to get that first and foremost, again, to be able to get the coverage without having to worry about being turned down elsewhere.
Kevin Pho: We’re talking with Jamie Fleischner. She’s the founder and president of Set for Life Insurance. With over thirty-two years of experience in the industry, Jamie has helped countless clients protect themselves from life’s biggest risks. Find out more at setforlifeinsurance.com. That’s all one word, setforlifeinsurance.com. That link will be in the show notes. Jamie, there are so many insurance companies out there. How should physicians choose the best policy for their needs?
Jamie Fleischner: Well, I think the best way to choose is, again, to work with an independent broker who can spreadsheet and guide you through the process, somebody who will listen to what your needs are, look at your criteria, and be able to walk you through the process and choose the best policy. What might be right for one person might be completely different, even for their spouse or somebody else. What determines what’s best for a client is their age, their gender, their medical specialty, their income, and where they’re located. So all of those things will factor in on what’s going to impact the price, but it also is important to prioritize what you need.
So early in your career, where you have a longer potential period of a disability, you might want to have all of the riders on there. You’re more vulnerable, you have a longer period of time where you might need the coverage, and you haven’t paid down your debt and you haven’t accumulated assets. As you go through your career, it’s also important to reevaluate your insurance, just to make sure it’s up to date. As you’re in kind of the middle of your career, as you’re peaking in your income, it’s important to make sure you’re properly insured. And then later in your career, when you get into maybe your fifties and approaching retirement, you might also be able to taper down your policy or really figure out what’s important. Maybe you’ve paid off your house, your kids are out of the house, you’ve saved for retirement. Maybe you don’t need as much coverage, or maybe you can also trim your policy. So it’s important not just to get your policy but also make sure it’s managed properly over time.
Kevin Pho: Now, let’s talk about early-career physicians. They have a lot of student loan debt. How does that factor into disability insurance decisions?
Jamie Fleischner: Well, one thing to consider is, if a physician becomes sick or injured or disabled, they’re still responsible for paying that debt. Not if they die; you don’t necessarily need life insurance for it. But if you become disabled, you’re still responsible for it. So it is important, when you’re looking at what your monthly needs are, how much coverage you need, to incorporate that, just like any of the other fixed bills that you need to cover.
There are policies that have riders to cover student loans. You can price it out and see if it makes sense to you. So if something happened, in addition to your monthly benefit, you also will have additional coverage that will help pay down that debt. Once that’s paid off, you can also cancel that rider. Again, it’s something to just consider: Price it out and see what makes sense.
Kevin Pho: Now, you talk to physicians all across their medical training. So these early-career physicians, what are some key financial mistakes you see these doctors making?
Jamie Fleischner: So one of the things to consider is, when you buy a policy, everything’s based on where you are at the time of application, and then the claims are paid based on where you are at the time of claim. So early on in your career, if you’re doing, say, internal medicine or general pediatrics or something of that nature, sometimes it’s better to get a policy then, because those are considered less risky occupational classes. So you get your policy then. Then, let’s say you go down the road and you do pediatric cardiology or interventional radiology or something more specialized; the policy will cover you, even though you’re paying the rates based on where you were at the time of application. So that’s something to think about.
But also, early on in your career, one of the most important things to have on your policy is the ability to increase it in the future without having to answer medical questions. So again, getting that policy initially can be tough. About one in three policies, when you get the policy, has some kind of rating or exclusion or something on it. If you can avoid going through that process again, you’re better off. So most policies allow you to get the policy initially, and then, as your income increases over time, you can increase it only by showing financial verification, no medical questions asked.
So personally, I think that’s the most important reason to get a policy early on, when you’re young, you’re healthy, even if you get a really small policy: to have the latitude to increase it down the road. And you don’t have to disclose any medical conditions. We have a lot of clients that take up risky activities, scuba diving or mountain climbing or any of those types of things; you don’t have to answer any of it.
Kevin Pho: Can you share a real-life example of a physician who benefited from having the right disability coverage?
Jamie Fleischner: Yeah. So I have a client of mine. She’s a long-term client of mine. She bought her policy; she was an orthopedic surgery resident here in Denver ages ago. And she got her policy, and every couple years we would update it as her income increased. And then she got to around age forty. Her income was peaking, and she started developing just some problems, and she really wasn’t sure what it was. And gradually she was in more and more pain, and she was still trying to work, and it turns out she had rheumatoid arthritis. And she eventually got to the point where she just couldn’t work anymore. She went to tie her shoes, everything froze, and she couldn’t move. So she’s had multiple surgeries and everything else.
So that’s somebody. Now, she filed the claim when she was forty-five. She’s permanently, totally disabled. She’s going to get the coverage all the way until age sixty-five, for the next twenty years. It’s going to help her. But there are a couple of things about that. So when she initially got the policy, again, she was young; she was healthy. She never had to answer any medical questions again. Number two, on that policy she also had a residual, or partial, disability rider. So by the time she went on claim, we helped guide her and say, “You didn’t go from working one day to not working the next day. This was gradual.” And so we were able to go back and see when she started having that loss of income, because with the residual rider, you only have to have 15 percent or more loss of income. And so they went back and they paid her on a month-to-month basis until she hit that 75 percent loss of income and got the full benefit.
But she’s extremely grateful that she has this coverage, because without it, I mean, she’s really in a bad way. She’s in a lot of pain, and she’s really not able to work at all. So that’s an example of somebody who didn’t really see this coming but is very grateful that she has the coverage.
Kevin Pho: So you mentioned something about updating their policy throughout a physician’s career. Now, for physicians who already have disability insurance, how often should they review their policy?
Jamie Fleischner: So I think it’s important, at least every three years, to just kind of sit down, take a look, and review it. Additionally, every time you have any kind of life change, it’s really important to evaluate really all of your insurance and all of your financials. So if you have a job change, it’s really important to take a look, and that includes if you get a promotion, or you change your job, or you start a practice, anytime there’s some kind of income change, if you get married, if you get divorced, if you have a child, if you retire, if you have a change in health. Any of those things are a trigger to reevaluate and just make sure your insurance is doing what it needs to do.
Because I think another big mistake that a lot of physicians make is they get a policy during residency, they’re so busy they don’t think about it, they never revisit it, and then, you know, a decade goes by, and all of a sudden now they have cancer, and they say, “Oh, gosh, I haven’t even looked at my policy. I hope it’s going to be enough.” And usually, ten years later, if it hasn’t been updated, it’s not enough. So it’s really important to make sure you keep it up to speed.
Kevin Pho: Now, on this podcast we often talk about how physicians are burned out, working long hours. They often feel financially pressured because of all these student loans. How does having the right insurance help them gain peace of mind?
Jamie Fleischner: Well, I think a couple of things. One is we’re seeing a lot more mental health claims, so you want to make sure you have a policy that will cover that, if that’s an issue. Because sometimes burnout or depression or things like that, even if you’re not totally disabled, sometimes that’s a cause where you’re not able to work, or not able to work at full capacity. So that’s something that you want to take a look at and make sure it’s covered.
I think the other part of it: Any kind of insurance provides the peace of mind, knowing, just if something happens, that you’re going to be able to pay your bills. So you’re under so much pressure. You’re working so hard to be able to pay the bills, but I think what could be even worse is if you’re not able to work hard. How are you going to pay your bills? So I think just having the peace of mind, knowing, you know, something happens, you’re going to be able to take care of it.
If you ask any physician, at some point in their career they know somebody who wasn’t able to work or had some kind of condition or something. And so that really brings a lot home, and saying, “Oh my gosh, if it happens to them, it could happen to me. So am I going to be OK?” That really does bring things home.
Kevin Pho: We’re talking to Jamie Fleischner. She’s the founder and president of Set for Life Insurance. Find out more at setforlifeinsurance.com, all one word. That’s setforlifeinsurance.com. The link will be in the show notes. Jamie, how does disability insurance fit into the bigger picture of financial planning for doctors?
Jamie Fleischner: Well, I think it’s really foundational. So whether you’re single, you’re married, you have a lot of assets, you don’t have a lot of assets, you have a lot of debt, it really is foundational to financial planning. So I think even before you really start doing retirement planning or any kind of financial planning, you really want to make sure your income is properly insured, because all of those other financial decisions are predicated on the fact that you’re going to continue to have an income. So it’s really important to make sure that it’s foundational and that it’ll cover you.
And something else that I really haven’t mentioned is, a lot of people forget that if they go on claim, the benefits will pay till age sixty-five, but then you’re assuming that you’re going to have retirement assets. So when you’re looking at how much coverage you need, you also want to make sure there’s enough in there to continue saving for retirement. So if you’re used to saving a certain amount on a monthly basis for retirement, if you go out on claim, chances are you’re not contributing to your 401(k) through work. So you want to make sure that you’re still doing that. So it really is foundational. I think it’s probably one of the first types of decisions, financially or otherwise, that a lot of early-career physicians make.
Kevin Pho: Now, how can physicians ensure they’re not overpaying for insurance while still getting the best coverage?
Jamie Fleischner: Well, first of all, you want to probably shop it around and evaluate what you do have and what else is in the marketplace. So if you did buy a policy maybe a few years ago, you might want to look at it and say, “Is this still the right kind of coverage? Did I get any discounts? Was I able to take advantage of any discounts?” There typically is some kind of discount out there at pretty much every hospital, but not every broker or agent has access to it. So you want to make sure you’re not overspending for your insurance. If you did buy your policy more than five years ago, you’re now five years older; you may not be able to get it at that rate.
But every now and again, if you got a policy a couple years ago, you might want somebody to just evaluate it and say, “Is this still suitable for my needs? Do I still need all of these riders on the policy? Can I trim it in some way?” Sometimes, too, as people start to accumulate more assets, maybe they can wait six months before the benefits kick in instead of three months. That helps reduce the premium. Maybe they’re overinsured. To ensure you’re not overspending and make sure you have the proper insurance.
Kevin Pho: So earlier on, I asked you about a story from a physician who benefited from having the right disability coverage. I’m going to ask you a question on the other end of the spectrum. Can you tell us a story about a physician who maybe relied on a work-given disability policy, and it wasn’t enough in that particular case?
Jamie Fleischner: So right now I have somebody who’s on claim, and this is actually somebody who’s not a physician, but he has a brain tumor. He works on Wall Street and only has a group disability policy. So right now he’s totally disabled. He’s getting all his treatment. If he can, at some point, go back to work, he’s not going to get any benefits. The other problem is, now that he’s on claim and considered disabled, he’s also not considered on the payroll and not considered an employee, so he’s lost some of his other benefits. So his situation has changed quite a bit.
And the same thing can happen to a physician. So you work at a large hospital, and if you only had your group policy and you go out on claim, now, if you’re not on the payroll, you’re no longer considered an employee. A lot of your other insurance changes. Your health insurance can change. Your group life insurance can change, since you don’t have that employee status. So that can really throw things into a tailspin.
Kevin Pho: Jamie, you’ve worked with thousands of physicians over the last thirty years. What’s the number one piece of advice that you wish every doctor knew?
Jamie Fleischner: I think the number one piece of advice is: Insure your income, get it early, lock it in, and get as many increase options as you can, and review it over time.
Kevin Pho: And my final question, as always: your take-home messages you want to leave for the KevinMD audience.
Jamie Fleischner: I think what I want to leave with the KevinMD audience is, I think it’s really important, whether you’re single, whether you’re married, whether you work at a hospital or an independent practice, it’s really important to make sure that your income is properly protected.
Kevin Pho: You’ve listened to Jamie Fleischner. She’s the founder and president of Set for Life Insurance. With over thirty-two years of experience in the industry, Jamie has helped countless clients protect themselves from life’s biggest risks. Find out more at setforlifeinsurance.com, all one word, setforlifeinsurance.com. The link is in the show notes. Jamie, thanks again for coming back on the show.
Jamie Fleischner: Thank you so much.
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