Morbidity vs. Mortality

While everyone’s definition of death is essentially the same for life insurance policies, morbidity, or health status, is what may become the determinant measure of the extremes of a disability from illness or accident.

Once a person has expired, finite requirements will provide for a claimant’s benefit payment. However, should a person become disabled resulting from illness or accident and is unable to perform the material duties of one’s specialty, the dynamics of a claim change. As a consumer and not a producer, this may significantly outweigh the trauma of death both emotionally and financially.

In today’s world, the life expectancy for a woman is approximately 83 years while men is 79 years of age. Of course, there are circumstances which may alter these figures, but, as of now, these are the target ages. As we consider these levels of longevity, it is important to note that the average length of disability that lasts 90 days runs 5 1/2 years.

As mentioned, death is finite, but an illness or accident may require ongoing care for an indefinite time period with the resultant expenses well beyond the cost of death.

In the medical profession with the advent and depth of specialization, we are now able to define that loss and provide living benefits to help defray the ongoing expense as well as the loss of earnings. The requirements to become eligible for monthly income is based upon the physician’s level at which the ability to perform the material and substantial duties of the practice specialty is compromised.

While some disability income insurance providers may state that a payable claim is based upon your ability to act as a physician, this has become the out liar when comparing language within policies. Contracts today should refer to recognized specialty and sub-specialty areas as the practice of medicine continues to evolve. It is for this reason that we provide contracts that offer specialty language along with the statement that the actual job classification is predicated on the duties at the time of claim…not what may have been written at the time of application. This protects the physician from losing any benefits as newer and better treatment protocols become available.

These reviews are designed to further protect our clients as they move forward into heretofore uncharted territories in the practice of medicine. It is our business to better guarantee that expanded knowledge and greater levels of care become the norm and not the question.

The new levels of care have evolved over time with the development of machines, robots, and drugs that are far more capable in aiding the patient. Simple examples would be the gastroenterologist now using a colonoscope versus the rigid scope that could only penetrate to a shallower depth. The surgeons of today i.e. neurologic, orthopedic and thoracic, not to mention the myriad of other specialists had been precluded from performing procedures that in years past didn’t exist. Today, those physicians are far more capable of offering care that may offer a significantly better quality of life as well as extending life expectancy itself. Imagine in years past the uses of radiology to diagnose and treat patients. In today’s world, these machines with their trained professionals are able to discover illnesses and anomalies totally unknown to the treating physician. Consider further the radiologic devices that can scan a heart from every angle, indicate the best way to approach treatment whether it be in an office, a cath lab, or in an operating theater.

Having begun an insurance practice in the late 60’s, there were situations where specialty coverage wasn’t available and inadequate contract provisions such as “work as a physician” or loss of earnings were the norm. The importance of wording could force a trained specialist to be in the work force as a teacher or as some other practitioner with incomes far below previous economic circumstances. Simple accidents from sports i.e. shoulder, elbow or hand injuries may make it impossible for the surgeon to continue operating. An inoperable nerve problem from the cervical spine may compromise the office practitioner or hospitalist from performing the examinations required for a practice. So, it doesn’t have to be an illness or accident that requires being bedridden or doesn’t mandate that one be forced to stay at home in order to satisfy the requirements needed to qualify for a claim.

During my own time in the insurance business, it became obvious to me that the insurance industry as a whole did not offer enough information and understanding of the untimely potentially catastrophic financial effects of a long term disability. It seemed that everyone had a cousin or an uncle in the life insurance business. But, rarely did I meet an agent that had any level of expertise in offering benefits if you lived. So, learning about morbidity and the exposure to financial ruin because of the lack of disability insurance planning became my major focus. As my son and others moved into the office, I made certain that the request for information began with the concern for the living since we had no way to define the length of time or the cost associated with being disabled. At the same time, my father, a practicing gastroenterologist developed an unusual nerve condition which forced his retirement on disability claim at the age of 55. That cemented my own need to understand the contracts and consequences of poorly written and sold policies to members of the medical profession.

On the positive side, those situations rarely occur when appropriate specialty contracts are placed in force. Along with the best of definitions, the policy has a fixed cost for the life of the contract with many offering additional income options regardless of any new health issues. Those benefit upgrades are priced at the attain age, but will never increase beyond the cost at the time of purchase. Of course, the original policy continues on at the cost based on the original date of issue.

Another positive is the ability of the physician to return to work in some capacity which may aid in recovery or at the very least allow for an emotional uplift at being able to be useful at some level of practice. There is no requirement to go back to work as there are circumstances that don’t allow any effort at rehabilitation. Too often we see neuromuscular diseases, cerebral vascular accidents, and physical traumas which won’t even allow an effort at work. And, in most cases, the loss of sight, speech, or hearing or the loss of use of any 2 limbs will become an automatic disability allowing for full benefit payments. Older policies that haven’t been upgraded may require the complete loss or even the severance of limbs in order to qualify for benefit.

As a physician moving into an active practice, you must be certain that you protect your greatest asset, the ability to work in your chosen profession. Many agents will attempt to convince you that life insurance to protect “dear” ones is the most important. Since disability insurance is the least understood of all of the insurances, give us the opportunity to share our thoughts as to how to best protect you for now and in the future. There will be offers of group insurance which may have tremendous value. But be aware that if you jump into the group before owning your own personal disability policy, you may preclude your ability to get the private plans. Groups create limits to the acquisition of personal. However, if you have your own private benefit prior to going into a group, you may be entitled to the combination of coverages.

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