Today I had an existing client contact me regarding his individual disability insurance. He is a surgeon who originally purchased his policy while in medical residency. Now, a few years later, he was approached by a “financial planner” (I use quotes here since this “financial planner” is a commissioned insurance salesperson-not a true financial planner who charges fees without selling products). This “planner” suggested that the surgeon replace his existing disability insurance with the financial planner’s company out of convenience. He told him there was no difference in coverage.
I see this scenario often. The problem is that the financial planner was really an agent of a captive company with only one product in his arsenal. This product was inferior to the surgeon’s existing policy. The coverage he purchased through Set for Life Insurance had a true own occupation definition of disability. This “comparable” coverage only had own occupation for 2 years. Thereafter, it would require the surgeon to be capable of being gainfully employed to continue to receive benefits. When the client contacted me, I pointed out this concern and he was grateful he didn’t follow through. This could have been a very costly mistake that could have been catastrophic. This was NOT properly disclosed the client. If the “planner” had explained this properly, the client would never have considered making this change.
The purpose of purchasing a quality individual disability policy is to cover oneself if you can’t work in your occupation or medical specialty. Not all policies are created equal.
While it may be convenient for you to have your coverage all in one place, it may not be in your best interest.
Beware of “financial planners” who are quick to replace your existing coverage, especially if they are commissioned salespeople who work for only one company. Work with an independent broker who specializes in this area.