Why You Need to Go Through Medical Underwriting for Disability Income Insurance as Soon as Possible

By Joseph F. Pantoja, CLU®, MBA

One of the necessary steps in applying to purchase disability income insurance is medical underwriting. What is medical underwriting? It’s the insurance company’s review of your health. Underwriting allows the insurance company to review each applicant, assess their health history, and determine an offer based on their risk factors.

Age and health drive the cost of your policy

I have helped thousands of dentists with their planning for almost two decades and recommend taking the steps to secure your insurance as soon as possible.

Given that both age and health impact pricing, it’s best to go through medical underwriting… today! Well, perhaps as soon as you finish reading this article.

Buying disability income insurance (DI) early on in your career gives you the opportunity to secure insurance at a younger age and while you are (theoretically) in better health.  You may be thinking, this is yet another expense to take on, especially if you have not yet graduated, or if you have recently graduated. Finances may very well be tight early on in your career timeline. But if you compare a 28-year-old purchasing disability policy versus a 38-year-old buying the same policy, there’s a substantial difference in cost. The long-term cumulative savings that come from purchasing insurance early are significant compared to buying insurance when you are farther along in your career path.

Get your foot in the door, make changes later

By going through medical underwriting now, you will be able to get your ‘foot in the door’ and secure the insurance at a lower rate. Keep in mind, you don’t have to insure a high income. The important thing is to get the insurance; you can always adjust how much coverage you buy as your income increases. That’s one way to keep your out-of-pocket costs low while you get financially established.

Eliminate the ‘what-if’s’

Once you secure a policy, you have peace of mind that you’re covered in the case of an injury or illness. Don’t assume that degenerative conditions only affect older people. Anyone can get sick, and anyone can be injured at any age.

But if you get your DI insurance while you are young and healthy, and even a year later a health condition results in you filing a claim – you are protected. Once you have a policy, you eliminate many of the ‘what if’s’ in life. What if your health changes? What if you need to use your policy and didn’t buy one? We’ve seen many young doctors still in training experience health conditions or injuries, and when they have a policy in place, they are obviously in a much better position than if they delayed purchasing it.

Don’t disregard the student discount!

If you’re still in school, or a (very) recent grad, make sure to take advantage of student discounts for disability income insurance. Most companies offer it, and it’s highly advisable to buy DI when you are in still in school. If you are putting if off because you don’t have time, remember that life is not going to get any less busy after graduation. You will have many more decisions to make as you enter the working world, so this really is the best time to buy. What if you forget to lock in the discount? I don’t know about you, but I really like to save money. You don’t want to pay too much for insurance. If there’s a training discount available to you, grab it while you can.

Super flexible policies

As we mentioned earlier, one of the great things about DI policies is how flexible they are. There are many bells and whistles that can enhance a basic policy. Those features are called ‘riders’ and they allow you to tweak your policy to say, make your student loan payments if you are not able to work, or they give you the option to easily increase your insurance without undergoing medical underwriting. Features can be added and subtracted along the way.  You can even increase or decrease your base coverage. If you have the policy, that is…

Your first business decision

Buying disability insurance is one of the first business decisions you will make early on in your career. Research it, make the decision, and then review your limits each year. Disability insurance is something you don’t simply buy and set aside. You want to look at it every year as you progress through your career. An experienced financial advisor should be able to guide you. I suggest you work with someone who knows not only about disability income insurance, but also has experience working with dentists and specialists.

How much should you insure and for how long?

Our suggestion to doctors looking for guidance on how much of their income to insure, is to protect as much of your income as you can until you’re financially independent. If you become independently wealthy at 55 or 60, you can potentially self-insure the need for disability insurance. You may decide, I don’t need to pay for this anymore, I’m going to let it go. But you also have the option of maintaining the policy until you’re 65 years old. You don’t need to keep your policy forever. It’s only until you’re financially independent, at which point you can decide to keep it or not.

Multiple line discounts

If you’re an established doctor, or if you are looking to purchase a practice you may have several insurance needs in addition to disability income. Most insurance companies offer discounts when customers buy several products at once. That’s worth keeping in mind, too, as you explore DI.

Don’t delay!

I hope I’ve made a solid case for why you need to go through medical underwriting now. If you are a dentist or specialist or medical doctor reading this, then you need disability income insurance. Perhaps this article is a reminder to call your advisor. If it brought up any questions, don’t hesitate to write me at [insert email].

Good luck with your search for the policy that’s right for you!

About Treloar & Heisel

Treloar & Heisel, an EPIC Company, is a financial services provider to dental and medical professionals across the country. Our insurance and wealth management divisions assist thousands of clients from residency through retirement. We strive to deliver the highest level of service with custom-tailored advice and a strong national network.

Joseph F. Pantoja, CLU®, MBA, is regional vice president, Treloar & Heisel, LLC. He can be reached at jpantoja@treloaronline.com.

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