Tuesday, January 31, 2017

Tale of Two DI's: Part 1

Disability Insurance cases, that is.

Case the First is a neurologist who recently (a little over a year ago) started his own practice, after having been employed by a local hospital system for years. He came to me asking about protecting his income if he became disabled, and I agreed to get some numbers for him.

His new income is significantly lower than when he worked for the hospital, but (at least) two carriers are actually willing to issue policies with benefits based on that prior income. Given that he was making north of $120,000 a year, and is now making about 60% of that, the difference is profound: $6,500 per month benefit  versus about $4,000. Of course, there's quite a premium differential, but the upside is pretty significant:

"Average Neurologist Income:  A Neurologist usually gets a wage ranging from 144000 - 216000 depending on seniority levels."

And so it came to pass that we met to review the quotes I'd gotten. He asked some interesting questions, and then wondered aloud why he should even consider buying this coverage because, after all, he'd never been disabled. Now, I could have pointed out that it was his idea to look into it, but I decided to try another tack. I asked if he'd ever had a claim on his homeowners policy. He replied that he hadn't, and so I asked him why, then, did he have homeowner's insurance? He replied - and I'm still taken aback by this - "because it's the law."

Um, what?

When I explained that no, it is not the law, but a requirement by the mortgage holder, he began arguing with me, telling me that he'd been told this was the law his whole life, and now he has to question everything I've told him.


At that point, we agreed to close things down, and I haven't heard from him since. Which is just as well, because I really don't know whether or not I want someone like that as a client.

Oh, for grins and giggles, I asked my favorite P&C Guru which government agency he notified when he sold a homeowner's policy, and he was also bemused when I explained why I was asking.

Stay tuned for Case 2, with a very different set of circumstances, and results.
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