How to Start a Conversation about MGIS Disability Insurance with Doctors: A Quick Guide 

Insurance brokers who consult with doctors understand why group disability insurance is valuable for highly trained professionals.  But, unfortunately, many doctors do not see the purpose of adding a group long-term disability (LTD) policy.  This is largely because typical group LTD contracts do not provide the insurance coverage that doctors expect. 

Doctors understand the value of disability insurance.  Most buy an individual disability insurance (IDI) policy right out of medical school.  But because most typical group LTD contracts don’t provide doctors with the right type of coverage, they learn that IDI policies are great and group LTD policies are not.  

IDI offers more customization and richer features than standard/typical group LTD contracts. However, Disability Guard for Doctors™ is designed specifically for healthcare professionals and mirrors key IDI provisions while preserving the benefits of group coverage. 

Relying only on IDI may not be possible.  As they progress in their careers, a doctor’s initial IDI benefit is usually not enough to achieve the financial-advisor-recommended 60 – 70% income replacement.  

So for these reasons, if you can speak with a healthcare group about the virtues of adding a specialized group long-term disability (LTD) insurance policy to their benefits package (or reviewing one already in place), it’s vital to make your pitch count.  

Ask the right questions 

These questions can create an engaging dialogue about adding (or replacing) a group LTD plan to a medical practice’s benefits package: 

If a group LTD plan is not in place:  

• Ask “why not”?  Often you will uncover a lack of understanding about whether one can have both IDI and Group LTD. 

• “Does your IDI policy benefit currently equal 60% of your total monthly income?” If no, does your IDI plan have a Guaranteed Insurability Option (GIO) or a Future Insurability Option (FIO)? These optional benefits or “riders” allow doctors to purchase more coverage on their existing IDI policy without undergoing additional medical underwriting.  

• If a group LTD plan is already in place, what is the definition of disability?  Will you be considered disabled if you can no longer perform even one of your commonly performed procedures? 
• If a group LTD plan is already in place, does the pre-disability earnings definition include all income sources received from the employer, including bonuses and K-1 partnership income? 
• If a group LTD plan is already in place, are benefits for mental & nervous and drug & alcohol (MNDA) conditions capped using a lifetime max? 

Usually, these questions will open the door to a serious conversation about group disability insurance—even if they hadn’t considered it previously.  

Dive deep into the definition of disability in disability insurance contracts 

Doctors and other highly-skilled healthcare professionals put a lot of time, energy, and money into training and earning their credentials. Therefore, they would not be pleased if a carrier denied or reduced their group disability insurance benefits because they could still technically, in some limited capacity, practice medicine. 

The definition of disability for doctors should be narrow and specific.  A broad and subjective definition leaves doctors vulnerable to being disqualified from receiving benefits. 

A definition of disability written for healthcare professionals should be based on the actual procedures each doctor regularly performed for twelve months before the onset of disability using CPT, CDT, and other procedural codes. 

Explain the key differences between Individual Disability Insurance (IDI) and group LTD

It is important to explain the high-level differences between group LTD and IDI: 

IDI 

• The individual, not the organization owns the IDI policy. Therefore, if the covered person leaves the organization they were at when they purchased the policy, they will retain it as long as they continue to pay the premiums. 

• IDI is a permanent product. So once it’s issued, it can’t be canceled as long as the premium continues to be paid.  

• The rates of the IDI policy can never change. 
• With IDI, a claimant can receive their full benefit even if they make as much money as they did pre-disability in a different profession. 
• IDI policies usually require rigorous medical and financial underwriting, making obtaining one difficult as doctors age. 

Group LTD 

• The organization, not the individual, owns the LTD policy. Therefore, barring a portability provision, if the insured leaves the organization that owns the policy, they cannot bring it with them. 
• LTD is not a permanent product in the sense that the policy terms usually last for two years, at which time rates and provisions can be renegotiated. 
• LTD benefits are offset by income regardless of its source. 
• LTD does not require any medical and financial underwriting up to the guarantee issue limit. 

Discuss common group LTD optional benefits or “riders.”

Group LTD policies usually offer riders that provide additional benefits (for an increased cost).  Some of the most frequently offered include: 

• COLA rider – for cost-of-living adjustments that slightly raise the benefit each year 
• Student loan rider – to help the claimant cover student loan payments 

• Catastrophic disability rider – to pay added benefits for a major disability that affects the policyholder’s ability to carry out everyday functions  
• Retirement contribution rider – continues retirement contributions on behalf of the disabled individual 
• Professional Liability Premium benefit – Reimburses disabled doctors up to $25,000 in actual malpractice insurance premiums during a 12-month period while on approved disability.

Group disability insurance can be a valuable addition to a doctor’s benefits package, but it is important doctors understand the coverage offered by the policy.  Group long-term disability (LTD) contracts may not provide the same coverage as individual disability insurance (IDI) policies. However, there are group LTD contracts designed specifically for healthcare professionals and offer similar coverage to IDI.  

It is important to understand the definition of disability in the policy and to ask the right questions to determine if a group LTD plan is right for a healthcare group.  It is also essential to explain the key differences between IDI and group LTD. This helps doctors understand the benefits and limitations of each type of policy.