When you apply for an individual disability policy, you need to undergo medical and financial underwriting. (For medical students and medical residents, the financial requirement is waived.)

Medical underwriting consists of a phone interview (unless you fill out a complete application asking you your medical history—depends on the company) and a paramedical exam. Paramedical exams are mini exams where an examiner comes to you and collects blood and urine samples. The company pays for this service and the results are available to you subsequently.

In addition to these requirements, the company oftentimes requests additional medical history. This is done via an attending physician statement, or in insurance jargon, APS. Some companies require these more regularly than others. Some even automatically order them if you have seen a physician in the last 10 years. The intention is to gather additional information before making an underwriting decision.

If you have had any adverse medical history, the company may either decline coverage or come back with a modified offer.  The modification may be a rated policy that charges additional premium, or it could be an exclusion or shorter benefit period.

So what happens if you receive a modified policy? Should you accept it? This is where working with a disability insurance specialist becomes very important. You need someone who can help you navigate this situation.

Last year I had a physician client of mine apply for a disability policy that came back rated. He had taken sleeping pills during his surgical medical residency due to the crazy hours that medical residents keep. As an experienced broker, I knew which companies would look at this more or less favorably. There are a few companies that would outright decline him. We went with the company I had recommended and he received a modified policy. It came back with an exclusion for mental nervous and without the ability to increase in the future without medical underwriting. The company stated they would reconsider after he was “treatment free” for 2 years.

Today marked 2 years since he last took that sleeping pill so I called my client. His income had significantly increased since he was in residency and he hasn’t taken any sleeping pills in over 2 years. We submitted an adjustment application to remove the exclusion and add the increase options back on the policy.

Any time you submit an adjustment application to add benefits, it requires medical underwriting. Since his income had increased, we were able to also submit financial information and verification to request the policy to be adjusted as well.

Before you apply for an individual disability policy, it is important to work with an experienced independent broker who can guide you in the right direction and can help you in the future if you need to make any adjustments.

For more information about physician disability insurance, the medical underwriting process, to discuss your individual situation or to request a quote, contact Set for Life Insurance today!