For many people I talk to, risk management is one of the more boring topics of personal finance, but it is also one of the most important. Planning for all the things that can go right in your life is a luxury you have only after you have protected against the catastrophic things that can go wrong. Risks that are relatively small in consequence should usually be self-insured with your short-term savings and you shouldn’t pay an insurance company to cover the risk for you. However, there are a few life-altering risks that often require us to find a cost-efficient solution from an insurance company.
One of the main risks I discuss with clients is what would happen to their financial well-being if they were unable to work due to an illness or an injury. Most of the people I meet with have a large, seven digit earning potential in front of them during their late 20s or 30s. That future ability to work should be viewed as an asset and protected as such. However, the problem with trying to protect that asset with a private long-term disability insurance policy is insurance companies often refuse to offer insurance to applicants who have certain pre-existing medical conditions, poor driving history, dangerous hobbies, plans to live internationally, or high-risk family medical history.
Occasionally my clients who cannot qualify for normal private disability insurance (which requires a full health screening) would come across a program usually referred to as Guaranteed Standard Issue Disability Insurance. These programs are usually specific to an employer, but the policy is privately owned by the client and not a part of the temporary group benefits package, so they can take it with them if they leave the employer.
After approximately six years of working to get a program like this in Oregon, I am happy to announce that all residents and fellows at Oregon Health & Science University now have access to this opportunity. The new program will drastically change the strategy many residents and fellows use when evaluating their long-term disability insurance options.
The primary benefits of this program are:
This new program provides a huge benefit for OHSU residents and fellows. One note of caution. If you apply for a disability insurance policy that requires health/lifestyle screening and you are declined or you don’t receive the best health rating, that decision can prevent you from being able to qualify for a policy through this new program. You should thoroughly understand all of your options, including this new GSI policy, before applying with any company. Please contact me if you want to learn more about whether this program is a good fit for you.
Written by Justin Berry, advisor in charge of the OHSU GSI long-term disability program.
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