Disability Insurance: Northwestern Mutual versus other

[WarEagleEM]

I'm an EM resident. I'm having trouble deciding between Northwestern mutual disability insurance and Guardian. Anyone have any wisdom?

NWM is sold only by NWM agents. So, NWM agents only want to sell you NWM (though they claim they can sell other companies' policies). Non-NWM agents cannot sell NWM, so they bash NWM, and sell products from the other companies. Both parties are biased.

The consensus that I hear among fellow physicians is that Gaurdian is the gold standard....

NMM touts their medical occupation definition (a modified own-occupation definition) and are trying to convince me that their terms for partial disability are superior than Gaurdian's, saying their terms offer more flexibility to allow me to work and collect benefits.

Here's my main question:

Regarding Gaurdian's true own-occupation definition:
My understanding:
I understand that emergency medicine is my occupation. I will earn money solely by working shifts and seeing patients in the ED. If I have a disability that prohibits me from working shifts in the ED (i.e. working as an EM physician), I am totally disabled, right?

I posted a pdf published by NWM regarding their medical occupation definition and how they compare it to a DI policy with own occupation definition.

What NWM is telling me:
Material and substantial duties and totally disabled: NWM is trying to slice and dice the duties of my profession. They say I have multiple material and substantial duties. I suppose this is true. NWM says that Guardian's own-occ definition looks at my principal duties, not my title, when determining my eligibility for total or partial benefits. NWM says that if I can do some duties (charting, talking to patients and making diagnoses, doing procedures) but not others, Guardian would deem me only partially disabled. However, the way I see my occupation, either I can perform all of my duties and work a shift in the ED or I can't. Does that make sense? I have to be able to perform all duties to perform my job. If I can don't do one duty, I can't do my job.

Hypothetical scenario: So, for example, let's say I have a disability that prohibits me physically from being able to do certain procedures or simply limits my ability to physically move around the ED. But I can still sit in front of a computer and do work. So, I guess, technically, I can do some "duties" but not others. Bottomline, this hypothetical disability will prohibit me from working shifts in the ED and make money as an EM physician. What will Gaurdian do for me in this hypothetical scenario? Am I totally disabled? or partially disabled? What if I find some medically related desk job (i.e. a job that is clearly not practicing EM physician)?

I hope I am asking the right questions to distinguish these two policies. Honestly, it is difficult to completely understand these contracts and how different hypothetical scenarios apply.
Thanks so much!

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[sylvanthus]

Ill be curious what people say in this thread as I signed up for disability through NWM.

 

[The White Coat Investor]

http://whitecoatinvestor.com/why-no...sician-disability-insurance-friday-qa-series/

 

[pinbor1]

I would definitely read whitecoat investor's link. I started out with NWM's disability insurance and bought into their life insurance as well. After having an independent 3rd party that did not sell insurance and reading up on it I realized how much they pulled the wool over my eyes. I have Standard and have been happy with them. It was cheaper and it truly does cover profession specific disability. Also, NWM will try to convince you that you need whole life as an investment and asset protection vehicle... run the other way!

 

[pinipig523]

I would definitely read whitecoat investor's link. I started out with NWM's disability insurance and bought into their life insurance as well. After having an independent 3rd party that did not sell insurance and reading up on it I realized how much they pulled the wool over my eyes. I have Standard and have been happy with them. It was cheaper and it truly does cover profession specific disability. Also, NWM will try to convince you that you need whole life as an investment and asset protection vehicle... run the other way!

Why is it that NWM is insufficient? I have been told that if I am not able to function in my duties as an EM doc, then I get disability? How is that different from Standard?

 

[RustedFox]

I have Guardian (didn't read the whole thread; sorry - headed out to hockey game and will catch-up later), but every other doc that I know has told me Guardian is 'it'.

 

[pinbor1]

Why is it that NWM is insufficient? I have been told that if I am not able to function in my duties as an EM doc, then I get disability? How is that different from Standard?

Larry Keller did a great job explaining this on whitecoat investor link below, physician news also does a good job as well. The issue comes up when you are partially disabled, basically as long as you can do any part of your job (not your primary function) then you are considered partial. i.e. they could have you stuck in a primary care soft of clinic because you can't perform your ED specific duties.

Also as a correction, I have Guardian for Disability.

http://whitecoatinvestor.com/why-no...sician-disability-insurance-friday-qa-series/

http://www.physiciansnews.com/2010/...ty-insurance-are-your-expectations-being-met/

 

[jendc08]

I have guardian as well. I bought my policy at the end of residency. It seemed all the attending a there had guardian as well.

 

[The White Coat Investor]

I have Standard for my individual policy. If I were buying today I'd get a Principal one. I find Principal's current offering to be a good deal for EPs. However, the key to all this is to go see an independent agent, not a captive one.

 

[gman33]

Partial disability isn't always a bad thing.
With NWM you can choose to be labeled as partially disabled.
This means you can work some and still collect partial benefits.

I have family how works for NWM, so maybe I just drank the Kool-Aid.

 

[strongboy2005]

I am an intern at a 4-year EM program. I know the residency program provides some sort of disability insurance for us. Should I be buying own-occupation disability insurance at this point or wait until I am about to be an attending?

 

[The White Coat Investor]

I am an intern at a 4-year EM program. I know the residency program provides some sort of disability insurance for us. Should I be buying own-occupation disability insurance at this point or wait until I am about to be an attending?

Truthfully, your risk is very high right now. So I would insure against that risk ASAP. But as a resident, you may not be able to afford to truly insure the risk you face, so I recommend you cover it as best you can. For some, that will be just taking the hospital's crappy group policy. For others, it will be buying as much individual disability insurance as they will sell you as a resident. That's what I did. But that maximum has gone up over the years. It was $2500 when I was an intern. Now I think a resident can get as much as $7500, which is obviously more expensive.

At any rate, as you become an attending there is no excuse not to fully cover this risk so by the time you graduate residency you should own as much disability insurance as you will ever need.

 

[gman33]

I pay around $200 for $7000 in benefit. Hard to come up with the money as a broke resident, but I need it for family reasons.
Will get as much as I can as an attending.

The problem with not getting it sooner is that something may happen that makes it impossible to get later.
Same with life insurance.

 

[LBKCLU]

Truthfully, your risk is very high right now. So I would insure against that risk ASAP. But as a resident, you may not be able to afford to truly insure the risk you face, so I recommend you cover it as best you can. For some, that will be just taking the hospital's crappy group policy. For others, it will be buying as much individual disability insurance as they will sell you as a resident. That's what I did. But that maximum has gone up over the years. It was $2500 when I was an intern. Now I think a resident can get as much as $7500, which is obviously more expensive.

At any rate, as you become an attending there is no excuse not to fully cover this risk so by the time you graduate residency you should own as much disability insurance as you will ever need.

There are straegies that you can use to limit the amount of premium that you pay today, as well as, limit the amount of coverage that you must purchase but still allow you to reach the maximum monthly benefit level in the future without doing additional medical testing or answering medical questions. Typically, as a Resident, that is not in the last 6 months of training, you can purchase up to $5,000 month.

 

[LBKCLU]

You might also find this video that I did to be informative as to why you should purchase your coverage as a resident or fellow:

 

[MR Insurance]

To address the original question, I think the article on WhiteCoatInvestor does a great job of explaining why NML's policy may not be ideal for an EM Doc, but here is some additional clarification.
With a true own-occupation policy, total disability is defined as the inability to perform the material and substantial duties of your occupation - it does NOT say every single duty of your occupation. All too often, the story is told by NML agents that a true own-occupation policy will consider you partially disabled only and not totally disabled. There are certainly situations where this may be the case, but not anywhere near as often as they claim and not in the circumstances they commonly love to use with physicians. NML agents love to explain that they provide you the option of whether you'd like to be on claim as totally disabled or collect a partial benefit when still able to partially work in your specialty. Based on the initial post in this thread, it doesn't really seem like this would even be a possibility. What hospital or group wants to hire an EM Doc who can't do the duties of an EM Doc. Additionally, in my experience of working with physicians, most would want to work if they were able. Even if they could not work in their medical specialty, they'd still want to work in some other capacity. If you see yourself as this type of person, NML is not for you. The primary reason being that if you decide to go work in some other capacity, your benefits will terminate once you earn more than 20% of your pre-disability earnings. This is precisely why a true Own-Occupation policy is better for most physicians - because your benefits would continue even if you decided to go work in some other capacity, regardless of how much you earn.

If the inability to perform certain duties or work certain shifts renders you unable to effectively work in your specialty, an Own-Occupation policy will consider you totally disabled. It will not make you go work in a primary care sort of clinic.

If you don't believe what you are being told by different agents, you could always try contacting a disability insurance attorney - there is one who commented on that WCI article. At least their only bias is for you to go with the company that will pay you the largest benefit in the greatest number of circumstances, which is exactly what you want too 🙂

 

[Groove]

Has anyone found it financially advantageous to seek disability insurance after you've established a policy out of residency (i.e. a few years down the road?) I was under the impression that the discount offered in residency trumped any offer I could have gotten on my own and have a fairly decent NWM policy although with a rider excluding my neck (s/p cervical ADR a few years back). I'm 39 and just can't imagine being able to shop around for a cheaper or all around better deal, especially when I hit the 4-0, but I've never really thought about it. Do you know of anyone who has sought out a new policy past 40 that gave them any worthwhile advantage over a standard policy out of residency?

 

[MR Insurance]

What you are essentially asking is whether there are any advantages to the wording of some policies versus others and the answer is yes. "Worthwhile advantage" can only be found if a claim is ever filed - furthermore there would only be an advantage if the new policy paid more in some way than the original policy. Thankfully, the chances are still greater that you won't become disabled so there probably wouldn't be any advantage because you probably wont become disabled. For those who do end up needing their disability insurance however, the policy one has will definitely matter and there may be worthwhile advantages to switching.
If someone were told today that they were going to be disabled next year, my guess is that they'd buy the best coverage regardless of cost.

I was just contacted by a doc in a similar situation to you last week - they have NML and were considering other options. The difference in premium was pretty tough to stomach for this specific situation, so I doubt they make the switch.

There are also many circumstances in which replacement would not even be a part of the discussion. For example, a resident who purchases $5,000 in his/her final year and then looks to increase the monthly benefit 3 years later. Assuming that there has been no change in health at all, this individual could select to exercise the increase option on their existing coverage, or simply apply for a second policy. Pricing of both policies will be based on the attained age, and discounts may be available with both policies. If this individual purchased a non Own-Occupation policy during residency, but now wants the more favorable wording, they can simply apply for a second policy through a company that does offer the Own-Occupation wording. In this case he/she would have $5k with the first company and any extra benefit with a second company.

 

[gensurgapp]

Replying to the original question posted on this thread:

What the Northwestern rep is telling you about Guardian's policy is absolutely NOT TRUE. I encountered the same response from a Northwestern agent in comparing their policy to Guardian and Mass Mutual's policies. The Guardian and Mass Mutual are legitimate own occupation policies. My lawyer said under either Mass Mutual (Radius with Own Occupation Rider) or Guardian (Provider Plus), if you choose to continue practicing emergency medicine despite your disability, then you would collect PARTIAL DISABILITY. But if you took a desk job with different primary duties from what you were mostly doing (e.g., teaching, research, administration) or a different job entirely (i.e., a different specialty or a different occupation entirely) or just decided not to work -- then you will collect FULL DISABILITY.

Under the Northwestern Medical Occupation definition, if you choose to continue practicing emergency medicine despite your disability, then you would collect PARTIAL DISABILITY. But you took a different job, you would still only collect PARTIAL DISABILITY. If you just decided not to work, then only then would you collect FULL DISABILTY.

Really, if you are primarily a surgeon or internist or diagnostic radiologist (i.e., closer to one extreme or the other), you should choose Own Occupation. The only way where I could possibly envision the Northwestern contract being superior would be if there is a doubt how about whether something you do is a main part of your occupation and thus you would rather have a policy that defined by how much of your income or activities are derived from procedures (e.g., gastroenterologist or cardiologist). Because that does clarify and in some scenarios possible lower the threshold for claiming TOTAL DISABILITY; if would not affect at all your ability to collect PARTIAL DISABILITY. However, because of the way Northwestern specifies it, in order to claim TOTAL DISABILITY, you can no longer work. So even then for it to be "superior" to own occupation you would have to be solely interested in never working again in order to take TOTAL DISABILITY.

Honestly, there is tons of experience from agents and legal precedent with Own Occupation disability insurance. If you're interested in paying $2K per year for individual disability insurance until your age 65, you'd be wise to go with the contract for which their is infinitely more experience in knowing how claims will be handled.

I'm not saying that Northwestern is bad at all and their financial strength and reputation is excellent; but I do not think the medical occupation definition is a home run for all doctors.

I do think it's worth getting a clarification in writing from whatever insurance company you're considering outlining several scenarios you have concerns about and seeing how they would apply their definition. I would not take one agent's word about how different company would handle a certain scenario. You need to define these scenarios yourself and present them to the agent; if you read a brochures touting their advantages, you won't get the full story.

If they are interested in your business, they should be willing to do this, because it's to all parties benefit that any doubts are settled prior to entering the contract and that all parties are comfortable with it.

 

[MD Financial Services Scott]

Why is it that NWM is insufficient? I have been told that if I am not able to function in my duties as an EM doc, then I get disability? How is that different from Standard?

If you get hurt or sick and can't do your specialty then benefits are paid as long as you are Not Engaged in another occupation. If you do become disabled then start another occupation then the income you receive from the secondary occupation will reduce your benefit. Standard, Met, Ameritas, Principal, Mass, Guardian, and Ohio would all still pay 100% of the benefit Regardless of what your new income is.

 

[Guillermo]

To address the original question, I think the article on WhiteCoatInvestor does a great job of explaining why NML's policy may not be ideal for an EM Doc, but here is some additional clarification.
With a true own-occupation policy, total disability is defined as the inability to perform the material and substantial duties of your occupation - it does NOT say every single duty of your occupation. All too often, the story is told by NML agents that a true own-occupation policy will consider you partially disabled only and not totally disabled. There are certainly situations where this may be the case, but not anywhere near as often as they claim and not in the circumstances they commonly love to use with physicians.

Can you give examples you've seen where the physician thinks he deserves full disability based on the true own occupation policy, but the insurance company grants him only partial disability? I think examples would help clarify in my mind how concerned I should be, if at all, about this.

 

[The White Coat Investor]

There's a lot made about these little differences between policies. The truth is the main issue with disability insurance is too few docs have it at all, and those who do don't have enough of it. The rest of the details are relatively minor compared to those. Even where one policy is a little better than another, it's usually more expensive too. Not a lot of free lunches there.

 

[MR Insurance]

Can you give examples you've seen where the physician thinks he deserves full disability based on the true own occupation policy, but the insurance company grants him only partial disability? I think examples would help clarify in my mind how concerned I should be, if at all, about this.

I'm clearly in the financial industry, so providing you with examples could be seen as biased by some readers. The truth is, I work with many of the leading disability insurance providers except NML. NML agents are the only agents out there who can actually sell the NML policy.
Instead, I found you an example from a disability insurance attorney's website: http://www.diattorney.com/attorney-...totally-disabled-and-not-residually-disabled/. The case discussed in this post not only addresses your question of a residual benefit being paid when a total disability benefit should have been paid, but also a case where the True Own-Occupation definition of disability led to a larger benefit being paid. We don't know all of the details, but the policy referenced in this case clearly included a True Own-Occupation definition of total disability.

 

[seanER]

Hi Everyone:
WARNING: Get the best policy from the best company. I do NOT know which one that is but now do NOT believe it is GUARDIAN. I purchased a Guardian disability policy and 7 years later became disabled. I am truly disabled and if I sent you video of me you would hope it never happens to you. However, despite purchasing an Own Occupation clause in my Disability policy from Guardian I never imagined them fighting me. It has been two years and they are still denying my claim. I have had to hire an attorney at my own expense. When I bought this policy from Guardian I naively thought insurance companies were respectable ....however, they are not. I have since learned that Guardian sells policies but apparently has a reputation for refusing to pay and therefore leaving the physician to litigate. When you are disabled with reduced income you do not want to be either waiting for payments nor having to finance expensive litigation. I do NOT recommend Guardian. Get you policy from an independent insurance agent and make sure you get them to research the companies reputation for paying or fighting. This is such a nightmare for my family and myself. You pay for what you get. I would have gladly paid more for a better policy than the policy I did buy which is useless after paying into it for ten years (over $70,ooo paid to still have to sue to collect.....get the best policy you can find and then purchase it through an independent reputable sales agent. Insurance sales man can be like used cars sales man who sell whatever they can make the most money selling not what is in their clients interests. This applies to anything in life. If you try to save money you may get it cheaper but in the end you may end up with NOTHING after all you paid.

 

[Taurus]

Hi Everyone:
WARNING: Get the best policy from the best company. I do NOT know which one that is but now do NOT believe it is GUARDIAN. I purchased a Guardian disability policy and 7 years later became disabled. I am truly disabled and if I sent you video of me you would hope it never happens to you. However, despite purchasing an Own Occupation clause in my Disability policy from Guardian I never imagined them fighting me. It has been two years and they are still denying my claim. I have had to hire an attorney at my own expense. When I bought this policy from Guardian I naively thought insurance companies were respectable ....however, they are not. I have since learned that Guardian sells policies but apparently has a reputation for refusing to pay and therefore leaving the physician to litigate. When you are disabled with reduced income you do not want to be either waiting for payments nor having to finance expensive litigation. I do NOT recommend Guardian. Get you policy from an independent insurance agent and make sure you get them to research the companies reputation for paying or fighting. This is such a nightmare for my family and myself. You pay for what you get. I would have gladly paid more for a better policy than the policy I did buy which is useless after paying into it for ten years (over $70,ooo paid to still have to sue to collect.....get the best policy you can find and then purchase it through an independent reputable sales agent. Insurance sales man can be like used cars sales man who sell whatever they can make the most money selling not what is in their clients interests. This applies to anything in life. If you try to save money you may get it cheaper but in the end you may end up with NOTHING after all you paid.

Sorry to hear your situation.

No insurance company wants to pay up. If I ever become disabled, I expect a fight to get my full benefits. Btw, I chose my DI from Mass Mutual.