Shopping for disability insurance is a lengthy process. After submitting your application, you will still need to wait four to six weeks before receiving an offer. (In some cases, even longer.)
As a physician, you understand the pains of paperwork. So do insurance agents who need to manage various applicants from all over the country. And for each applicant, there are a number of variables they must review, process and verify. This includes:
- Confirming your employment and salary.
- Reviewing your medical records (as a patient).
- Assessing your level of risk.
To better understand the buying experience, let's take a closer at the five steps everyone needs to take to get coverage.
Remember that four-to-six week wait? That doesn’t include how long you and your agent take to compare various policies. But it's a crucial step you simply cannot afford to rush.
Disability insurance policies have many moving parts and optional features. That's why it’s important to work with your agent to identify which add-ons are must-haves for doctors like yourself.
You should also comparison shop by requesting multiple quotes from different carriers. This is the easiest way to find the best available coverage at the lowest cost.
Once you've done your due diligence, it's time to apply.
The next step is completing your application form, is usually two pages or so. This will gather personal information, employment history and a basic medical profile.
You or your agent will then submit the form along with supporting documentation. This typically includes proof of employment and income. You will also need to authorize release of medical records. (In some cases, you may need a to provide driving records and a credit report as well.)
As simple as it may sound, be sure to answer all questions. Missing information will lead to delays in processing. The same goes for inaccurate or conflicting information.
Once you have submitted your application, it's time for your disability insurance medical exam. Also known as a paramedical exam, this may take several days or more to schedule. It all depends on the how your availability corresponds with available technicians.
This exam is much like a physical check-up. It will consist of:
- An interview regarding your medical history.
- Recording of height, weight, blood pressure and pulse.
- Collection of blood and urine.
Much of this has already been provided in your application. This 30 minute exam is used to verify your answers so it's important to be honest about your situation. Anyhting else will likely result in you being denied coverage.
Your paramedical exam results will be sent to the insurance company’s underwriter. The underwriter will also request your medical records.
This is often the lengthiest part of the process simply because records can be difficult to obtain. Doctors are as busy as they come, so it's no wonder these requests often slip through the cracks. Your personal physician will also be asked to provide an attending physician’s statement.
The underwriter will then use this information to assess your risk of filing a claim for coverage. This is heavily reliant on your overall health, including the presence of serious conditions. Your medical specialty will also influence your premium rate --- for better or worse.
Insurance underwriting is a challenging endeavor. Just like anything else, it takes time to do it well. On the one hand, underwriters want to cut applicants a great deal. On the other hand, underwriters cannot afford to place their insurance companies under great risk. Insurers are also under tremendous pressure to offer a deal that beats the competition.
If all goes as planned, you will receive an offer with a premium amount based on your risk assessment. If you accept, the insurer will then issue your policy.
But what if you're unsatisfied with the first offer you receive? Chances are you'll have to start over if you want to work with another carrier. This underscores the importance of performing your due diligence every step of the way.
If you do accept your policy offer, be sure to check out your free-look period. This will allow to cancel within
Shopping for disability insurance can be frustrating and time-consuming. But knowing what to expect at each of these five steps can definitely help faciliate the process.
- Research your policy needs.
- Submit your application.
- Schedule your paramedical exam.
- Complete the underwriting process.
- Review, accept and issue your policy.
As you know by now, this is the most effective way to protect your income in the event of injury or illness.
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Joel Palmer is a writer and personal finance expert who focuses on the mortgage, insurance, financial services, and technology industries. He spent the first 10 years of his career as a business and financial reporter.