Physician Disability Case Study: Why Early Action Can Save You Thousands

Updated: Sep 15, 2020

There are many reasons for a physician to get declined for disability insurance. A serious illness or medical condition alone can disqualify you from obtaining coverage. Significant medical history can also disqualify you, or result in such high premiums that it is no longer cost-effective. Sometimes it can occur because the underwriter does not have enough information to make a decision. Don’t give up if this happens to you. It is important to seek further medical attention to uncover if there is really a reason to be denied disability insurance. Here is an example of why this makes sense to do.

The Initial Physician Disability Insurance Application

Recently I had a healthy 38-year old male orthopedic surgeon in New York apply for disability insurance. He had a clean medical history and no current serious medical conditions.  With an annual income of approximately $750,000 and overhead expenses for his medical practice in excess of $30,000 per month, it was imperative to insure both his personal finances and that of his practice. His existing individual disability insurance provided some security, but it was not nearly adequate enough to cover his needs if something happened to him. To make matters worse, he had no business overhead expense coverage at all for his practice.

It is important to take action to uncover if there really is a reason to be denied disability insurance.

After running some numbers it was determined that our exclusive physician discount offered through our preferred carrier network could replace some of his existing coverage to save money on his premium, as well as allow him to max out his current monthly disability benefit. We applied for $20,000 in monthly own specialty disability benefits as well as $20,000 in monthly business overhead expense coverage. Furthermore, this policy used a true own occupation (own specialty) definition of disability, guaranteed level premiums and the residual and Cost of Living Adjustment (COLA) riders.

Application Outcome

When the client’s lab results came in, the underwriter declined his applications for insurance due to elevated blood glucose levels, indicating a pre-diabetic condition. Instead of receiving disability insurance, it was recommended he seek immediate medical attention for treatment. Needless to say, he was shocked and alarmed to see his lab results. He had always been in great health, was at an ideal weight and had no family history of diabetes.

After relaying all of this information, the client visited his primary care physician. Upon further examination, we discovered that he had been using Fluocinonide, a strong topical steroid cream, to treat moderate to severe eczema on his hands. He had developed eczema from continuous “scrubbing in” for orthopedic surgeries all day long. Fluocinonide has been known to increase blood sugar levels and should only be used for short 10-day courses. Due to his condition, this surgeon had been using it three times daily on both his hands for the three months prior to having blood drawn for his disability insurance applications.

Taking Action

Once he stopped using the Fluocinonide, his glucose levels came down to normal levels within one week. He tested frequently in the following months to make sure results remained stable. He also began using normal, non-medicinal moisturizing lotions to treat his eczema, which was also resolved.

We remained in close contact during this whole time. After 5 months, I suggested he reapply for the original disability and business overhead policies we had attempted to secure. In addition to the standard applications, I constructed a cover letter addressed directly to the underwriter handling his case. I outlined our previous unsuccessful attempt at obtaining coverage, his subsequent medical counsel and treatment and included supporting documentation pulled from medical forums online confirming that the use of Fluocinonide can raise serum glucose.

His lab results came back normal and underwriting approved his applications for both the $20,000 monthly benefit individual disability insurance and the $20,000 monthly benefit business overhead expense insurance. Furthermore, we were able to qualify this surgeon at normal standard rates with NO exclusions or ratings.

Valuable Lessons

This abnormal blood draw result almost cost this young orthopedic surgeon the financial security and peace of mind that having sufficient disability insurance provides. As far as everyone was concerned, this surgeon was doing everything right. He was young, healthy, and planning ahead to maintain financial security with disability insurance. Typically, all of these factors combine for a strong policy, with high benefits and low premiums. Fortunately we were able to catch the random health concern early. He now knows that his family’s lifestyle, income, and practice expenses will be covered if something ever happened that prevented him from doing surgery.

Direct communication with the underwriter is a luxury we at enjoy due to the sheer volume of disability business we write every year for physicians.

It takes diligence and persistent follow-up on the part of the advisor to place a case like this in such a short period of time. I believe we accomplished this in large part because of our direct communication with underwriting.  This direct communication is a luxury we at enjoy due to the sheer volume of disability business we write every year for physicians.  Based on my experience as a Certified Financial Planner™ working extensively within the physician disability insurance marketplace, I understand the importance of relieving any risk that an insurance provider will consider in each application, which is why the added documentation was crucial to this case. While it certainly felt great to be able to secure meaningful disability coverage for my client, I was even happier to know that his health was good and he was going to be ok.

If you have been denied a policy or would like a review of your coverage, contact us.

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