White Coat Investor Podcast Episode #398: Doctors on Disability and Why You Need Disability Insurance

Introduction In episode #398 of the White Coat Investor Podcast, host Dr. Jim Dahlia delves into the critical topic of disability insurance for medical professionals. Understanding the unique financial vulnerabilities that doctors face, this episode aims to educate and empower physicians, dentists, and other high-income professionals to make informed decisions about protecting their income and securing their financial future.

Guest 1: Dr. Joe's Personal Journey with Disability Dr. Joe, an orthopedic surgeon, shares his compelling story of facing unexpected health challenges early in his career.

• Early Health Struggles: At the age of 40, Dr. Joe began noticing a decline in his left hand’s dexterity, leading to a diagnosis of Parkinson’s disease. Despite effective medication management, his condition took a severe turn when he was diagnosed with tonsillar cancer at 43, necessitating intensive treatment including radiation and chemotherapy.

  "When you train for X amount of years... having it stripped away five, six years into your career is devastating." ([10:49])

• Disability Insurance Coverage: Dr. Joe discusses the limitations of employer-provided disability insurance, which offered a short-term disability covering one year of full pay and long-term disability plans that potentially reduce his income by 50%.

  "I certainly would have loved to have some more coverage." ([09:12])

• Emotional and Financial Impact: The assurance of having some disability coverage provided significant emotional relief amidst the turmoil of his health crises. However, Dr. Joe expresses regret over not securing individual disability policies, emphasizing the importance of comprehensive coverage to protect his family's financial stability.

  "Having something is way better than having nothing." ([15:10])

Guest 2: Matt Wiggins on Disability Insurance for Physicians Matt Wiggins, a specialist with Doc Insure, provides expert insights into the complexities of disability insurance tailored for medical professionals.

• Personal Experience and Professional Insight: Matt recounts his own experience transitioning from a group disability plan to an individual policy after severe back injuries rendered him unable to continue cardiac surgery.

  "It's impossible for me to steer you in the right direction if you're hiding things." ([58:48])

• Group vs. Individual Policies: He highlights the shortcomings of employer-provided group disability insurance, such as lower benefit ceilings, lack of portable coverage, and non-own occupation clauses, which can significantly reduce benefits if the insured can perform some work.

  "Less coverage than you think. Not the right kind of coverage and not even portable to take with you." ([60:32])

• Guaranteed Standard Issue (GSI) Coverage: Matt explains the role of GSI policies as a safety net for those with pre-existing conditions that might exclude them from standard disability insurance. He advises physicians to consider GSI options before pursuing fully underwritten individual policies.

  "If you have any health history that you're concerned about... you should absolutely look at going the GSI route." ([46:42])

• Strategies for Securing Adequate Coverage: Emphasizing the importance of transparency with insurance agents, Matt recommends a dual approach—securing a GSI policy if necessary and supplementing it with individual coverage to ensure comprehensive protection.

  "Be sure that you talk to someone who knows what they're talking about." ([37:42])

Discussion: The Importance of Disability Insurance for Doctors Dr. Dahlia and Matt engage in a thorough discussion about why many medical professionals neglect disability insurance despite the high likelihood of encountering medical issues that could impede their careers.

• Statistics and Risks: Highlighting that approximately 20% of doctors will file a disability claim during their careers, the conversation underscores the unpredictability of both illnesses and accidents that can lead to long-term disability.

  "Disability insurance is far more sensitive to your health history than life insurance." ([34:29])

• Barriers to Acquisition: The duo identifies key barriers such as sticker shock, complexity of policies, and reluctance to confront personal health vulnerabilities. They advocate for proactive education and consultation with knowledgeable agents to overcome these hurdles.

  "If you really think of the cost versus the benefit... you make up for... paying into it pretty quickly." ([38:05])

• Impact of Inadequate Coverage: Drawing from real-life stories, including Dr. Joe’s, the hosts illustrate the financial and emotional strain that insufficient disability insurance can impose on physicians and their families.

  "50%. That's just too many... that's not okay." ([69:42])

Advice and Recommendations The episode concludes with actionable advice for medical professionals:

1. Assess Current Coverage: Review employer-provided disability policies for limitations such as capped benefits, non-own occupation clauses, and lack of portability.

2. Consider Individual Policies: Supplement group coverage with individual disability insurance to ensure adequate and tailored protection.

3. Explore GSI Options: For those with pre-existing conditions, GSI policies can provide essential coverage without exclusions.

4. Consult Experts: Engage with specialized insurance agents who understand the unique needs of medical professionals to navigate the complexities of disability insurance effectively.

5. Act Proactively: Do not delay securing disability insurance, as unforeseen health issues can arise at any stage of a medical career.

Notable Quotes with Timestamps

• "Money grows on the tree of persistence." ([01:00])
• "Having something is way better than having nothing." ([15:10])
• "Disability insurance is far more sensitive to your health history than life insurance." ([34:29])
• "It's impossible for me to steer you in the right direction if you're hiding things." ([58:48])
• "50%. That's just too many... that's not okay." ([69:42])

Conclusion Episode #398 serves as a poignant reminder of the essential role disability insurance plays in safeguarding the financial well-being of medical professionals. Through heartfelt stories and expert advice, Dr. Jim Dahlia and Matt Wiggins illuminate the path towards securing robust disability coverage, urging listeners to take proactive steps in protecting their careers and families.

For more information on disability insurance and to connect with specialized agents, visit whitecoatinvestor.com/insure.