As a physician, your time is obviously limited and usually comes at a premium. If you have made the decision to purchase an individual physician disability insurance policy for yourself, why not leverage the time you are investing during the application process to maximize efficiency? Since a disability insurance policy requires a medical exam as part of the underwriting process, you should take the opportunity to review your life insurance portfolio to make sure it corresponds with your current needs and financial goals.
Carriers change life insurance premiums frequently. Review your policy to make sure you’re getting the best rates possible.
Ask your advisor to perform an insurance review, and if it is determined more life insurance coverage is needed, apply for it concurrently with your disability income insurance policy so you only have to complete one medical exam. Your advisor should be able to coordinate sending the exam results to both carriers, essentially “killing two birds with one stone”.
Both disability insurance and life insurance ultimately serve a similar purpose – they are both contingency plans to protect you and your loved ones financially should the unforeseen and unintended occur. Both can give you the peace of mind you need to rest assured that your family will be taken care of should something happen to you. It makes sense to review both types of policies at the same time since reasons for purchasing one typically coincides with the other – whenever you experience a life changing event.
Examples of Events That Should Prompt a Full Disability and Life Insurance Review
- Getting married, getting divorced, or having a child. Beneficiaries on all policies need to be reviewed and changes made accordingly.
- Changes that could affect the duration of your life insurance policies. Common examples are the purchase of a new home (people typically want to have life insurance in force to cover the term of their mortgage) or a growing family (typically you want to have some life insurance in place throughout college years, and as each additional child is born the dates that coverage is needed extends out further).
- Changes in income. Just like disability insurance for physicians, it is best to update the amount of your life insurance benefit in accordance with your income level. With a higher income, spending habits increase.
- When planning your estate – life policies should always be reviewed for proper ownership and funding to maximize benefits to your heirs and minimize tax consequences. See Estate Tax Planning for Doctors…more on this in a future post.
Even if you are satisfied with your current benefit amount and your financial situation has not changed, you should still review your policies every 2 or 3 years to make sure you are getting the best rates possible. Carriers change life insurance premiums frequently to stay competitive, and they have trended lower over the years. It is more common than you’d think that we are able to restructure your plan in such a way that saves you money, whether that means consolidating policies or changing providers.
The bottom line is when you are exploring insurance options, whether it is disability or life insurance, you should ask your advisor to look at all of your coverage together as part of your overall financial plan. It doesn’t take very long to do a review, and not only could it save you money, but it can also provide security knowing you have everything set up properly. When a client submits a new disability application, as a habit I will typically perform a quick “insurance audit” and review all existing disability and life policies in force to determine how much, if any, additional life coverage is appropriate. We also offer a whole suite of financial planning services specifically geared towards physicians as part of our process to make sure all bases are covered.
Start saving today. Get a free consultation on your physician disability and life insurance, and let us do the work for you.