Picture this: You are about to graduate. Your first job as an attending is lined up. You plan on taking a few weeks between graduation and your first day to recharge. You might have plans for international travel. Maybe you closed on a new house a few weeks ago and you are excited to move in and make it your own.

You also recently applied for disability insurance; to make certain you locked in the trainee discounts.

Then you get a letter in the mail from the insurance company that starts out like this:

Thank you for the recent application. After careful consideration, we must regretfully inform you that we cannot offer you a policy.

What?

But the insurance agent you talked with said that your prescription history wouldn’t be a big deal.

You’ll soon learn that, if this happens to you, it typically means that you won’t be getting a policy from any other company.

Because once the toothpaste is out of the tube, it isn’t going back in. Statistically, there is almost a 20%¹ chance that this could happen to you.

Supposing you want to purchase a personal disability insurance policy, the first step is to share information about your entire health history with a stranger.

Then, you will be asked to review and sign an application that gives an insurance company permission to search multiple databases of your prescription history, health insurance claims history, and other confidential sources of information about you.

This is called medical underwriting, and the insurance companies do it to verify your health history.

The three potential outcomes when you apply for a personal disability insurance policy

1. You find yourself in the position described above. This is called a decline and it happens to about 1 of every 5¹ physicians who try to get a policy.
    
2. You are approved for a policy, but because of pre-existing health/Rx history, the insurance company has offered you a policy with penalties -  and it is less comprehensive, and more expensive, than you were hoping for.
    
3. Congratulations! You find yourself among less than 50%¹ of all physicians who are satisfied with the outcome of their application.

How to avoid the frustration and disappointment so many physicians experience throughout this process?

This may sound counterintuitive, but if you are not sharing your entire detailed health history with your insurance broker or financial planner before disclosing it to an insurance company (and signing away your privacy rights of said health information), it should raise a glaring red flag.

Let’s suppose you do pre-screen your health history before sharing it with an insurance company, and you notice yourself answering “yes” to some of the health questions.

This should cause a pause. You should immediately make certain that no GSI program exists at your current training institution or at a future institution (if you will continue your training somewhere else).

Depending on the institution you are in training at, you may be eligible for a special disability insurance underwriting option called a Guaranteed Standard Issue (GSI) program.

GSI programs offer a safety net that guarantees trainees the opportunity to qualify for a personal disability insurance policy, from a leading medical specialty own-occupation insurance company, with no pre-existing exclusions, no health/Rx history disclosure, and no price penalty.

But remember how imperative it is that you pre-screen your health history before disclosing it to an insurance company?

Once one company discovers your health history, they all do. And if you are approved for a policy, but with a penalty, or if you are declined, then your eligibility for the GSI program is typically forfeited.

Many training institutions like AHN, Mount Sinai, Emory, Mayo Clinic, Ohio State, and UPMC have GSI programs available to all residents and fellows.

And these GSI policies are portable, meaning they can be taken with you at graduation if you move to a new employer or continue your training elsewhere.

Is it too late for me?

But what if you graduated last year? Or what if you learn there is not a GSI program available at your current institution?

If you are still in medical school or residency but anticipate pursuing a fellowship at a different institution, you should inquire with your future programs whether a GSI program exists.

There is obviously a chance that you may never have access to a GSI program. If you find yourself in this situation, and you are worried that it might be difficult to qualify for a personal policy, then you should find a disability insurance broker or financial planner who has a proven track record working with trainees and can work, on your behalf, with the multiple companies.

Unfortunately, qualifying for a personal disability insurance policy isn’t as easy to do as most would hope. If you think a personal policy makes sense for you, make sure you pre-screen the health questions up front before disclosing your private health information to an insurance company. If you find yourself answering “yes”, think GSI first.

Hurley Associates works with physicians who are concerned with starting their careers in balance: paying off yesterday, and saving for tomorrow while living a financially confident life today.

¹ Beal and Khan, November 2021, 2021 Annual Survey of the U.S. Individual Disability Income Insurance Market, Milliman Report

Registered Representative and Financial Advisor of Park Avenue Securities and Financial Representative of Guardian.

California Insurance License #: 0L77727