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. 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 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 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. Jamie, welcome to the show.
Jamie Fleischner: Thanks for having me.
Kevin Pho: Alright, so physicians, we are trained to take care of others, but many neglect their own financial security. Why is disability insurance so critical?
Jamie Fleischner: The reason it is so important is because every financial decision is based on your ability to produce an income. So when you are thinking about all your hopes and dreams, your retirement, or buying a house, or any financial decision you make, it is 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 take care of all your finances?
It is really foundational to all financial planning, and statistically speaking, there is about a one in four chance that at some time in your career, you will have some kind of disability—a 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 is really your largest asset.
Kevin Pho: And physicians, we always get a lot of information when it comes to the various options when it comes to 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 are taken care of through their employer. They think, “OK, well I have, you know, I am signing up for an employer. I am working at a big hospital or a large private practice. My employer is going to take care of me. I really do not need any independent insurance.” And that is a really big misconception for several reasons.
One, most physicians do not stay with one employer throughout their career. So if you only have your employer plan and you go to leave—maybe start your own practice or go somewhere that does not 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.
Number two, a group policy is really going to cover more catastrophic types of illnesses or injuries. Typically, it might pay you 60 percent of your income up to a certain amount, and it is taxable. But you cannot go work elsewhere, depending on the policy. It is limiting, and the reason is they cannot underwrite everyone individually, so it is a generic policy for all employees.
So the biggest problem that a lot of people make is thinking, “I do not need my own individual disability insurance. I have it through my employer,” but what is really the proper thing to do is to supplement what you have through your group with an individual policy. An individual policy is portable, so if you ever leave your group, you can take it with you. Number two, it is more comprehensive, because if you become sick or injured and cannot work in your specialty, it will pay you benefits even if you go work in another specialty or occupation. And number three, it is non-taxable. So it really bridges the gap between what an employer policy will provide and what you are used to taking home to maintain your financial situation if something happens.
Kevin Pho: So what is the difference between a disability insurance policy that is own occupation and other policies, and why does that distinction matter so much for doctors?
Jamie Fleischner: The most important part of any insurance policy is the contract language, because that is how the insurance company is going to determine whether or not to pay a claim. The reason own occupation is specifically important for physicians is because physicians tend to be very specialized. If something happens and you cannot do that specialty—that is what you are trained to do.
We have had a lot of physicians who get arthritis or carpal tunnel or injure their hands, and they cannot do surgery. They want to make sure they are being paid and not told by an insurance company, “We think you can just retrain and do another specialty,” or “Go do research.” With an own occupation policy, if you cannot do surgery, you are going to get your benefits, even if you pivot and do research, teach, or take on another specialty. Anything you earn elsewhere will not reduce your policy benefit.
If you do not have that policy language, you run the risk of an insurance company determining what they think you are capable of doing, based on your education and experience. As a physician, you are very well educated. You do not want to be at the whim of an insurance company telling you, “You are smart. We think you can do X, Y, or Z,” and therefore not pay. Own occupation coverage really ensures you are protected for what you were trained to do.
Kevin Pho: Now, can physicians with preexisting conditions still get disability insurance? And if so, what kind of options are available?
Jamie Fleischner: When you apply for a disability insurance policy, you do have to go through medical underwriting. They will ask about your medical history, head to toe, over the last 10 years. If you have been treated for anything, they will request information from your doctors and determine whether or not that is going to be covered. For example, if you had knee surgery two years ago, they might exclude that knee because it is considered preexisting. They might say, “Once you have been treatment-free for five years, then we will cover you.”
One of the things you mentioned earlier is guaranteed standard issue, which is something fairly new that only a few select agents have access to at certain hospitals around the country for residents. It allows residents to buy a policy with no medical questions asked. So you do not have to disclose any preexisting conditions—whether it is a previous knee surgery or mental health treatment—none of that. You can get coverage. It still comes with a discounted rate and is own occupation. However, if you apply elsewhere and receive an exclusion, or you are declined, you cannot then go back to the guaranteed standard issue policy. So if GSI is an option, apply there first. Then, if you need additional coverage, apply elsewhere.
Kevin Pho: Are there red flags to watch out for when shopping for a disability insurance policy?
Jamie Fleischner: Yes. It is really important to work with someone who is independent, a broker, rather than an agent who represents only one company. An agent works for a single company and has a financial incentive to sell only that policy, which might not be in the client’s best interest. A broker can shop around, compare policies, and help you find the best fit.
If someone tells you one policy supersedes all the rest, that could be a red flag—except in the case of guaranteed standard issue, where it might be your best option to get coverage without the risk of being turned down elsewhere.
Kevin Pho: Jamie, there are so many insurance companies out there. How should physicians choose the best policy for their needs?
Jamie Fleischner: Again, work with an independent broker who can shop around and guide you through the process. Look at your needs, specialty, age, gender, income, and location—those factors all affect pricing. Also, prioritize what you need at different stages in your career. Early on, you might want all the riders because you have a longer potential period of disability and more debt. Mid-career, you want to maximize your coverage if your income has peaked. Then later, when you are in your 50s and nearing retirement, you might reduce your coverage if your house is paid off, your kids are out of the house, and you have built up enough retirement assets. The policy should be managed over time, not just purchased once and forgotten.
Kevin Pho: Now let us talk about early-career physicians. They have a lot of student loan debt. How does that factor into disability insurance decisions?
Jamie Fleischner: If a physician becomes sick or injured and cannot work, they are still responsible for that debt. So when determining how much coverage you need, factor in your student loan payments like any other fixed bill. Some policies offer student loan riders that pay an additional benefit to help cover those loans. You can price it out and see if it is worth it. Once your loans are paid off, you can cancel the rider.
Kevin Pho: Now, you talk to physicians across their medical training. What are some key financial mistakes you see these doctors making?
Jamie Fleischner: One important thing to remember is that your policy’s rates and coverage are based on your status at the time of application, and claims are based on your status at the time of claim. Buying a policy as, say, an internal medicine resident—an occupational class that might have lower premiums—means if you later become a specialized surgeon, your policy still covers you for surgery at the lower rate you initially locked in.
Another crucial reason to get a policy early is to have the ability to increase coverage in the future without additional medical underwriting. About one in three applicants initially face some type of exclusion or higher rating. If you can avoid reapplying and going through that process again, you are better off. Look for policies that let you increase coverage by only showing financial proof—no new medical questions.
Kevin Pho: Can you share a real-life example of a physician who benefited from having the right disability coverage?
Jamie Fleischner: Yes. I have a long-term client who bought a policy during her orthopedic surgery residency in Denver. Every few years, we updated her coverage as her income increased. At around age 40, she started having problems—stiffness and pain that gradually got worse. It turned out to be rheumatoid arthritis, and she eventually could not work at all.
Because she had increased her policy over time, she now receives benefits until age 65. Also, she had a residual (partial) disability rider, which helped her when she was scaling back her work before becoming fully disabled. It covered her lost income month to month until she reached that 75 percent income loss threshold to qualify for full benefits. She is very grateful she had that coverage in place.
Kevin Pho: You mentioned something about updating a policy throughout a physician’s career. For doctors who already have disability insurance, how often should they review or update their policy?
Jamie Fleischner: At least every three years, or whenever you have a life change—like getting married, divorced, having a child, changing jobs, or if your income changes significantly. Also, if you have a change in health, you want to be sure your coverage is still appropriate. One big mistake is getting a policy during residency and never revisiting it. Ten years can go by, and you have not increased coverage or updated your riders, and suddenly you have a health event. You want to make sure your policy is always in line with your current situation.
Kevin Pho: On this podcast, we often talk about how physicians are burned out, working long hours, and feeling financially pressured from these student loans. How does having the right insurance help them gain peace of mind?
Jamie Fleischner: We are seeing more mental health claims now, so you want to make sure your policy covers issues like burnout or depression if they keep you from working at full capacity. Beyond that, insurance provides peace of mind. You are under so much pressure and working hard to pay your bills, but what if you cannot work hard anymore? If you know you can pay your bills and maintain some semblance of financial stability if you become disabled, that relieves a lot of stress. Almost every physician knows someone who was not able to work due to an illness or injury. You do not want to be in that position without coverage.
Kevin Pho: Jamie, how does disability insurance fit into the bigger picture of financial planning for doctors?
Jamie Fleischner: It is really foundational. Whether you are single or married, whether you have a lot of debt or a lot of assets, disability coverage is crucial. Every other financial decision—like retirement planning—is built on the assumption that you will continue to earn an income. One important point is that if you go on claim, benefits typically pay until age 65, and you will not be contributing to your retirement plan during that time. So factor in enough coverage so you can continue saving for retirement. It really is the bedrock of financial planning for physicians.
Kevin Pho: How can physicians ensure they are not overpaying for insurance while still getting the best coverage?
Jamie Fleischner: The first step is to have someone review what you already have and compare it to other options in the marketplace. If you bought a policy five or more years ago, you may not be able to find a lower rate now because you are older, but it is worth reviewing. Also, check for available discounts—some brokers can offer hospital-specific discounts that others do not have access to.
You also want to avoid over-insuring. Just because you qualify for, say, 10,000 dollars a month, does not mean you need it. If you are part of a two-income household, maybe you need less coverage. Or if you have more savings, you can opt for a longer waiting period—like six months instead of three—to reduce your premiums. Tailor the policy to your actual needs, not just a maximum figure.
Kevin Pho: Earlier I asked you about a physician who benefited from having the right disability coverage. Can you tell us a story about someone who relied on just a work-based policy and realized it was not enough?
Jamie Fleischner: Right now, I have a client on claim who works on Wall Street and only has his group disability coverage. He developed a brain tumor and is currently totally disabled. The policy is paying him some benefits, but if he becomes well enough to do some other kind of work, those benefits might stop. Also, because he is off the payroll, he lost other important benefits like health insurance and group life insurance. The same thing can happen to a physician with only a group plan: once you go off payroll, you lose employee status, which can affect health coverage and other benefits.
Kevin Pho: Jamie, you have worked with thousands of physicians over the last 30 years. What is the number one piece of advice you wish every doctor knew?
Jamie Fleischner: Insure your income, lock it in early when you are young and healthy, and make sure you have enough increase options. Then review it over time to keep it up to date.
Kevin Pho: And my final question, as always, what are your take-home messages you want to leave with the KevinMD audience?
Jamie Fleischner: Whether you are single, married, employed at a hospital, or in private practice, it is really important to make sure your income is properly protected. That peace of mind is invaluable because it underpins everything else you do financially.
Kevin Pho: Jamie, thanks again for coming back on the show.
Jamie Fleischner: Thank you so much.
