We live in an eBay world, looking for bargains, haggling over hotel room rates and airline fares, searching for coupon codes and BOGO specials. Let’s make a deal.
But is low cost insurance always a good deal? Insurance is a promise to protect you from an unexpected, and costly, event. It’s not an item you can use every day like a cell phone or soap. The quality of this promise is ultimately determined at claim time – when the promise is put to the test.
If all insurance companies and policies were the same, the best bargain would be the cheapest policy. Same promise, cheaper price. But not all insurance companies or policies are identical. If you’ve ever had an insurance claim, you quickly learned that the policy language determines the outcome of your claim — not what you thought it said.
Would you purchase an automobile insurance policy that covered accidents every day except Tuesdays? While less expensive than one covering you 24/7, you would likely pass on this policy – unless you never drove your car on Tuesdays. But what if you neglected to read the fine print? Would it still be a bargain? Not if you had an accident on a Tuesday.
Many coastal homeowners with homes flooded by hurricanes discover their homeowner policies covered wind damage, but not flooding. So did hurricane-force winds cause a surge of water — or was it just simple flooding?
With Group Long Term Disability (LTD) insurance, the value of the carrier’s promise and the language in the LTD policy are crucial to a disabled claimant who expects benefit payments to last perhaps 20, 30, or even 40 years. Your lifestyle is on the line.
For medical practices, Group LTD can be both a valued employee benefit and a supplemental income protection solution for physicians. However, insurance agents often sell – and practices sometimes purchase — LTD plans based primarily on price, while failing to consider the quality of the insurance company or the policy language. This focus on cost can result in unforeseen and catastrophic issues at claim time.
Would you buy an LTD policy that does not protect a physician’s ability to perform his or her daily procedures? A policy that forces a physician to train for another job – perhaps even outside the field of medicine? How about a policy that will not pay a benefit to a disabled physician unless he or she works part-time? Or, a policy that might pay only $100 a month to a highly-compensated physician who returns to partial work? Many practices buy these policies without knowing these and other limitations.
“Bargain” LTD policies may contain restrictive provisions just like these. However, a dollar saved today can mean hundreds of thousands of dollars lost later. Many policy provisions that are acceptable for other industries often fail to meet the unique needs of physicians and their staff members.
With LTD, price should not be the main focus. “But our physicians want to keep our practice expenses down,” you may say. Cost-cutting concerns are real, but do physicians really want an LTD policy that may not pay them the benefit they expect (and need) if they become disabled? If a cheaper policy leads to an unhappy claims experience, who will take the blame?
So is it a bargain? Really? Don’t wait until it’s too late to find out.