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Disability Insurance FAQs: The Guaranteed Standard Issue (GSI) Policy for Physicians with Preexisting Conditions

If you are in our physician communities, you likely know you need disability insurance (DI). It is a cornerstone of physician personal finance and protects the financial security you’ve worked so hard to build. Especially at earlier stages in your career, such as in training, most doctors who are residents and fellows don’t have enough of a nest egg to fall back on to support themselves and their loved ones in the off chance that something unexpected happens that renders them unable to make money as a physician.


Unfortunately, we also see many posts in our communities from physicians that have been denied disability insurance or who have significant exclusions placed on their policies due to preexisting medical conditions or things in their prior medical history that makes insurance companies decide they are too risky to insure. It is critical to avoid this situation if at all possible, as once you’ve been denied coverage, many options for disability insurance are closed off to you.


This article goes over a unique policy called the Guaranteed Standard Issue Policy - the GSI plan - which is available at select training programs (and occasionally employers) and can be used to provide disability insurance to those who might not qualify otherwise, and why you should check to see if your program offers a GSI program if you are deemed at risk of not qualifying for a standard own occupation disability insurance policy. Disclaimer/disclosure: This page contains information about our sponsors, as well as affiliate links, which support the group at no cost to you. These should be viewed as introductions rather than formal recommendations - please do your own due diligence before making decisions based on this page. We are not formal financial, legal, or otherwise licensed professionals, and you should consult these as appropriate. To learn more, visit our disclaimers and disclosures.


Understanding Guaranteed Standard Issue (GSI) disability insurance policies.




Disability Insurance Resources 


Take a deeper dive into disability insurance in our guide to disability insurance for physicians primer.


If you're new to understanding disability insurance and need to shop quotes for true own occupation disability insurance, our partners from our recommended list of insurance agents for physicians can help.


Patternhttp://www.patternlife.com/partner/psg.  This convenient option will allow you to enter your information and immediately begin generating quotes from the major disability companies, as well as schedule a meeting with the Pattern team to discuss the options and figure out which plan is best for you.  Many in the group have had a great experience with this process.

Moment Insurance: Complete your quote inquiry information in less than five minutes and easily schedule an appointment to speak with a dedicated, experienced disability insurance expert who will walk you through the process from start to finish and help you compare different options. Many in the group have worked with their experts previously, and had a great experience! Contact them here.

PolicyGenius: This is not a physician specific company, but well known in the insurance space.  They may be a helpful resource if you are looking for another place for quotes.  Make sure that you're comparing apples to apples in terms of true own occupation insurance, as not all fields emphasize the need for this equally.  Contact them here.



What is the Guaranteed Standard Issue (GSI) Disability Insurance Policy, and how is it different from standard employer policies or standard own occupation disability policies?


Guaranteed Standard Issue plans are disability insurance policies that are offered to trainees such as resident and fellow physicians at select training programs, which require minimal, if any, underwriting. They can also be available through large groups of attending physicians who are employed by the same institution or medical group, but these are relatively harder to find as the insurance companies only issue them in specific circumstances (nonetheless, if you are in a situation where you wouldn’t qualify for a standard own occ policy, you should check and see if your employer has one).


For most physicians, an individual disability insurance plan tailored to you offers the most customizability. We advocate for these over employer plans for many reasons, including that you can take them with you if you leave the employer and that benefits are not taxable, as opposed to employer policies, which typically have premiums paid with pre-tax dollars and therefore if you ever have you use the policy, you’re stuck with the tax bill on every monthly payout. You’ll also likely get better coverage with your own policy, as you can insure tens of thousands of monthly income. Because of the risk insurance companies take on when writing these policies, they require individual medical and financial underwriting, which employer and GSI policies do not. While these plans are not cheap, they allow you to answer the question of what you would do for financial stability if you couldn’t earn money as a doctor with lots of confidence. 


GSI policies, on the other hand, still offer some customization with the ability to add on some riders, and allow you to hold the policy as an individual instead of an institution. So, even once you leave your training program, these policies will stay with you like the traditional individual own occupation policies.



When should I look into a Guaranteed Standard Issue (GSI) Policy?


GSI plans are a blessing for those doctors who would not otherwise qualify for disability insurance. This is usually because of something in their medical history that would cause the insurance companies to pause during the underwriting process for a normal own occupation disability policy. Insurance companies are always looking to limit risk, and will often decline physicians or add exclusions to their policies or significantly raise premiums if there is anything of concern in their medical records or medical exam. While they’re generally available for all trainees at these programs, even those who are healthy, we most often recommend looking into them specifically when there is a question about whether a physician will be approved for a gold standard own occupation disability policy.


Another instance where a physician may want to look into getting a GSI policy is if the pricing for the GSI plan is significantly cheaper than an own occupation plan. For example, this could include female physicians, who tend to pay much for for DI when unisex pricing is not available. If this is the reason for looking at GSI, it's worth looking at the cons of GSI policies below to make sure that you're not making a decision that will hurt you in the long run to save some money now. However, if the GSI policy fits all of your needs, it can certainly be a good option.



What are the pros and cons to having a Guaranteed Standard Issue (GSI) Policy?

Pros of A GSI Disability Insurance Policy:

We’ve covered the major upside - having access to disability insurance during your career even if you wouldn’t typically qualify for an independent own occupation disability policy, because there’s no medical exam required.


Additionally, for some individuals, GSI plans can be cheaper than traditional disability insurance plans, because they’re usually structured with group pricing. Therefore, those populations that tend to pay more, such as physicians with things on their medical records or even females, may find the pricing competitive. Of course the two policies you are comparing may not be apples to apples with the limitations on GSI (see below in the cons section), so make sure you understand what you give up if you elect to use a GSI policy solely because of pricing considerations. Regardless, GSI plans are better than employer plans because they remain yours no matter where you go, so if you are unable to qualify for a traditional individual plan, it is better to lock in on a GSI plan than rely on the fact that your employer will always have a disability plan available to you.


Cons of A GSI Disability Insurance Policy:

Sound too good to be true? Here’s what you may give up, depending on the exact plan.  The policy may cost more than an individually underwritten plan, especially if you're young and healthy, as these policies know they're taking on a certain amount of risk by not having as stringent underwriting. Our recommendation is that if you are healthy, to compare this quote to what you'd receive by going through an independent insurance agent that runs quotes for disability insurance amongst the individual carriers.


Since these plans offer limited customization, as this plan has been created as a group plan. For example, you may not be able to add some of the riders that are important in your specific situation. While most of them offer some riders, they may not go up as high as a traditional policy, or the amount that yours can go up to may be limited by how the policy is written, by how many people have enrolled in the plan, or by some other grouping. Definitely inquire about which riders are available and limits in general before choosing a GSI above a traditional policy, as riders such as future increase option riders that allow you to increase your benefit as your income goes up may also be limited or not available. We have seen several instances where members cannot qualify for as much benefit through a GSI plan as they can through an individual plan.



GSI plans may also have specific exclusions or limitations in benefit for things like disability related to mental health issues or substance abuse. Another thing you should ensure is that the GSI plan offered to your institution is in fact true own occupation.


Additionally, individual plans offer quite a bit of flexibility over the lifetime of the plan - you can increase or decrease benefits, add or drop riders, change the exclusion or waiting period before benefits kick in, etc to alter the amount of premium that you pay to reflect your current stage in life. As physicians get older and have more of a nest egg for example, they may choose to decrease their coverage or increase the amount of time before their benefits kick in so that they can decrease their annual premiums. You may not have that flexibility with a GSI plan.



Where can I get a Guaranteed Standard Issue (GSI) Policy?


It’s unfortunately not always straightforward to know where to get a GSI policy. Although many hospitals and training programs have access to them, most of these plans are written very specifically to include physicians that meet certain criteria, so you have to do your research to find them. While we wish every training program made the residents and fellows aware of them prospectively, we’ve seen that most programs that have them don’t do a great job of making the trainees aware of them. 


Some insurance companies will tell you that they have a program at your institution, so make sure to ask there if you are contacting an insurance company directly. We do think that one of the best ways to find out about these programs and whether you should consider one is to talk to a reputable and experienced disability insurance broker. They can assess your medical history and tell you your risk of being declined for a traditional own occupation policy, and in many cases, if there is a question, will recommend that you secure a GSI policy first to ensure you’ve got baseline coverage, and then consider applying for a traditional disability insurance policy. That way if you get declined for a traditional policy, you’ll have the GSI policy in your back pocket.


Importantly, once you have been declined for a traditional policy, in most cases you will not qualify for a GSI plan, so this is something you need to be proactive about discussing with your agent before filing the application. It’s also why it’s so important to be honest with your disability insurance agent prior to filing the application - if you have a medical history, any prescription drugs you have taken, etc, it’s all discoverable, and if you don’t disclose this to your independent agent and give them the opportunity to guide you appropriately, you could definitely find yourself in a bad position. They are there to help you navigate this process and don’t work for the insurance companies, so allow them to help you find the best solution for you!



Do I even need disability insurance?


In one word, yes. If you aren’t aware of the importance of disability insurance, please review our primer on disability insurance for physicians.


The fact is that the vast majority of physicians need their own disability insurance policy, even if they have a spouse that also earns money or their employer provides this insurance. Read about some reasons why physicians mistakenly think they don’t need disability insurance, and then make a plan to secure a individual policy assuming you’re not in one of the few categories we list there for why you might not need an individual policy.



Conclusion 


Guaranteed Standard Issue disability insurance plans are important to know about when you are purchasing disability insurance, particularly if you have a pre-existing medical condition that may preclude you from eligibility from a traditional own occupation disability insurance plan. You may also elect to go with a GSI plan because it’s a cheaper option that’s available to you through your program, but in this case, make sure you’re aware of the potential limitations of the policy, including what riders can be applied to it and any coverage limits that may apply.


If you need a place to buy it and help navigating your options, check out our resources for disability insurance agents for physicians.


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