Posted on: November 9, 2016 by Chuck Krugh, CFP
Occasionally we have clients compare rates for similar individual disability insurance policies for men and women. “Why are rates higher for women,” they ask.
The answer: Because it’s worth it!
Here’s why: When insurance companies set rates, they base them on their claims experience for similar policy holders in the past. Insurance actuaries are some of the smartest people out there, and are extremely skilled at crunching data. And time and again, insurance companies have found that they are much more likely to pay claims for their women policyholders than they are for men – and pay them much earlier in life.
There are multiple reasons for this discrepancy: Women have much higher rates of pregnancy and childbirth (who knew?), and are more likely to suffer from autoimmune disorders, anxiety and depression. And what’s more important from the carrier’s perspective, women are much more likely to do the smart thing and actually get help by going to the doctor. Health care utilization rates in general are much higher among women than among men, especially at younger ages.
On top of that, statistically, women are less likely to be the sole or most significant income earner in a family.
Put all the above together and it translates to higher disability premiums for women.
What can women do?
First of all, stay healthy. Besides the obvious benefits of health itself, remaining in good health also makes purchasing needed insurance protection – including not just disability insurance but also life insurance and long term care insurance as well. Watching your weight and body composition, exercising regularly, eating well, refraining from smoking and excess consumption of alcohol all help keep insurance premiums lower by reducing claims, and preserve your future coverage options.
Second, consider insurance carriers that offer ‘unisex’ rates. These are carriers who combine men and women into the same risk pool and assign premiums based on their combined usage rates and claims experience, rather than keeping them separate.
This is why it’s better to work with a specialist in disability insurance who has access to many different carriers. Many agents can only write policies with one or two carriers. At DoctorDisability.com, we are able to write policies with nearly every company issuing own-occupation disability insurance policies in America of sufficient quality and financial strength.
Most group disability plans also have unisex ratings. But these policies are usually less comprehensive than private individual plans, have narrower definitions of what disabilities qualify for the payment of claims.
Furthermore, most group policies are not portable. If you leave your employer, you can’t take it with you. If you have a major health issue in the future – or even a minor one, such as gaining too much weight, or having a pregnancy with some complications, you may not be able to buy disability insurance in the future at any price. You’ll be stuck with your current employer or face the prospect of having to go ‘naked’ if you are no longer covered by an employer plan.
Going into private practice will be a much more risky proposition for you in that case.
If you’re a woman physician or dentist and you are interested in guaranteeing part of your future income against the risk of disability, we want to work with you.
With years of experience working specifically with doctors, dentists, residents and medical school students from coast to coast, we understand your needs. The products and carriers we represent are especially well suited for physicians thanks to the strong ‘own occupation’ language in the policies we favor.
Our offices are in Southern California, but we work with physicians, dentists, students and interns/residents. Chances are we have a program that is right for you and your budget.
Call us today at 866-899-7318 for a free quote. Or visit us at www.doctordisability.com.
We look forward to working with you.