Master Disability Insurance: Simplify Financial Planning for Busy Doctors

episode of Fireside Chats with Doc-to-Doc. I'm Dr. Josh Lumley, a board-certified anesthesiologist and head of customer experience here at Doc-to-Doc Blending. And whether you are on your way to the hospital or catching a break between shifts or just trying to make sense of all the non-clinical stuff that life is throwing at you right now, thanks for joining us. So today we are covering a topic that may not be glamorous, but it's definitely crucial, protecting yourself with DI. And no, that's not diabetes insipidus, but that is not diabetes insipidus, that is disability insurance. And to help us dive into it, we have Greg Elsbury joining us. Greg is the strategic partnerships manager at Pattern, a company dedicated to helping physicians like you and me navigate the complex world of insurance and financial planning. Greg joined Pattern in 2023 and his mission is clear, to educate residents about non-clinical issues and overall wellness. He's all about the education first approach, making sure the next generation of doctors is not just clinically brilliant, but also prepared to handle life outside the hospital walls. And with nearly a decade of experience in enterprise sales and business development, Greg has truly found his passion in helping physicians protect the biggest investment, which is themselves. So as we get started, feel free to send us your questions, send them afterwards. We're going to try to answer them as we go along. And of course, we're going to share the recording with some additional resources afterwards. So let's get into it. Greg, thank you so much for being with us this evening and welcome. Thank you for having me. I usually start my lectures off with who's excited to talk about insurance and it's just crickets, right? So we're going to make this fun tonight and I appreciate you guys having me. Yeah, yeah, for sure. So welcome and thanks for being here. And so I guess to start off with, part of the reason I think that you might get the crickets response is not so much that it's a boring topic, but frankly, you know, as physicians, we're sort of indoctrinated with this ideology that you have to know everything all the time. And I think insurance is a subject that frankly, we just don't know a whole lot about. So to start at the top, really, why are you passionate about this subject? And why do you focus so much about disability insurance? And frankly, why is it that important? Sure, sure. Yeah. So pattern itself, you know, we only sell disability insurance in term life. And so when you use the term insurance, it kind of, it's kind of this wah, wah, right? Like nobody really wants to buy insurance. You know, we have to buy mortgage insurance. We have to buy auto insurance. There's those insurances that were mandated to purchase. Disability insurance isn't one we have to buy, right? So immediately there's this kind of conception around, yeah, what's insurance? Do I really need it? Are they going to pay it out? All those things, right? And so we really like to talk about, you know, disability insurance from the standpoint of really protecting your lifestyle as a physician, right? And so how do we protect the investment that residents are making in training to be able to go out and trade their time for money for the next 30 to 40 years, we've got to protect that income, right? Because with that income comes a lifestyle, the houses, the cars, just, you know, the savings, the investing. And so how do we go protect that lifestyle? And when we frame it that way, it seems to make a little bit more sense. And so, you know, disability insurance is crucial for really all physicians, right? I always say to residents, you know, they have targets on their back, right? And actually Dr. Marshall from Dr. Dot gave me this one, the Henry's, right? They're high earners, not rich yet, right? And I thought that was brilliant, right? Because again, I'm a second year resident and I have this, I have this income, right? This opportunity that's a year or two, three years away. You know, how do I start thinking about protecting that now, right? How do I make a plan going forward? And disability insurance is always kind of a fundamental aspect of a financial plan because with no income, we can't do anything else, right? I can't invest in real estate. I can't invest in my 401k. I can't, you know, start saving for an emergency fund if I don't have that income. So it's really kind of a fundamental aspect for not only high income earners, but obviously physicians, you know, specifically. So. Well, so thinking back to myself in residency, I don't necessarily remember for benefits enrollment when I was a resident. I know when I became an attending and I got a private practice job, you know, that started to become very, very clear to me. Do residency programs, do they typically offer disability insurance? Is that something that I would enroll in with my, you know, with, with human resources and with benefits enrollment? Yep. Upon enrollment, that's typically one of those check the boxes, right? And then that's really kind of, you know, kind of consistent for any, any W-2 attending or any, anybody that's working at a hospital. If they're a W-2 employee, they're going to most times get access to those group benefits. Right. And so, yes, in residency, trainees will get access to different benefits, whether that's life insurance, short-term disability, long-term disability, things of that nature. And so back to, you know, kind of going in front of residents, which is what we do all the time, you know, I'll ask a group and say, Hey, who here has disability insurance? And it's either one person raises their hand. It's no one raises their hand or like eight people raise their hand. Right. And those eight people raise their hand. They're thinking, well, yeah, we have it, we have it through X, Y, Z university. Right. And so, so yes, there is a level of protection there, but it's not always enough. Right. And so a lot of times, whether they're in training or they're early attending, or even, you know, somebody who's, you know, into their career, like yourself, how are we protecting that full income? And there's a lot of nuances between a group policy and an individual policy, right? So group policies, they're typically, you know, those are taxable dollars, right? So the employer's typically paying the premium on that. And you can't really get in and out of it, right? I mean, you're you're kind of checking that box as yes, I'm saying I will be part of this group and get access to these benefits. So any benefit that we receive, you know, from a group policy is going to be taxed. It's not portable, right? That's a big thing. So if I move, and you know, I graduate training, and then I go on to fellowship, or I go, you know, start my attending career, that policy is not coming with me, right? Now, if I go and sign up as a W-2 attending somewhere else, most likely, I'll get an opportunity to get group benefits there. But that policy is not coming with me. And so the biggest thing, though, is it's not typically own occupation, right? Which is what physicians need. So that true own occupation, to kind of get into the weeds here a little bit, I know we just started, but that's the most important thing that physicians need, you know, and so when you look at a true own occupation policy, what that's protecting is your specialty, and your duties as a anesthesiologist, as an orthopedic surgeon, right? So if you guys can't do those material and substantial duties of that specialty, you're going to be made whole through your benefit. Okay, now, the interesting part of that is, say I'm, you know, in the OR, you know, clinical anesthesiologist, right? And I have, you know, back issues, or I get cancer or something of that nature, and I can't work anymore. But I want to go teach, maybe I can do research, and I can go be gainfully employed elsewhere, I can still receive my benefit from my policy, because it's a true own occupation, I can't do my occupation, but I can still go earn income over here, that's massive. Okay, so really, disability insurance is protecting what residents are getting trained to do. Got it, got it. So okay, so we okay, so we talked about like, you know, being a W2 employer, I can't speak for other specialties, but I can say within anesthesiology, we are really in the last three to five years, really post pandemic, I've seen an explosion of folks who've become 1099 independent contractors. So spend a week at this hospital or spend a month at this hospital, then pick up another gig at another hospital, maybe pick up some weekends with another group at another hospital. So obviously, they are not employees, they're not W2 employees of a given practice or an academic group or an organization. How does this work for them? It's even more important for them, right, because they don't have access to that kind of baseline group benefit. So they're still going to need to go get that individual policy, like that's a must, right? When we talk to companies that do locums, or, you know, whether it's kind of the Uber for locums, you know, there's so many things that come out, we were just at ASAP this week, emergency med conference in Vegas, and it's always fun to kind of see what's new and up and coming. But those those docs that are doing the even if they're moonlighting as a resident, right, and they still have, they still have group benefits from their employer, they still need to have that additional coverage, right. And so for locums, or for 1099s, it's super important. So typically, what we'll see is we'll see a stack methodology. So you always have your group, you may not if they're 1099. But you'll want to stack what's left to cover that full protection of that income, right. So you're never going to really be able to protect if I'm making 400,000, I'm never going to be able to really protect 400 because of taxes, right. So typically, it's about 60%. And so with that group, you'll you'll want to kind of stack and make sure that you're covering the full income there. And a lot of times docs forget about that, they'll get it as a second year, and then they'll be like, Oh, wait, I only have a $5,000 a month benefit, but I'm making 30. I better, I better go increase that. So So to answer your question, it's, it's, it's of the utmost important that anybody who's 1099, you know, they should have their own individual policy. And really, to digress a little bit, we had a situation here earlier this year, where we had an emergency med group, I believe there's 100 physicians. And the hospital basically said, Hey, there's, you know, 60 days, and you guys are all going from W two to 1099. Wow. Okay, so that's a big, that's a big change, right? And to your point, now, I don't have, you know, healthcare, insurance, right? I don't have, you know, taxes being taken out, I don't have 401k match, right? I don't have my, my disability insurance that I had through that group. So now what happens? And we saw the spectrum of these hundred doctors, right? You saw early attendings, you saw 50 year old docs that are making $600,000 a year. And they're like, Oh, boy, what do I do now? I thought my group was was good enough. In all actuality, it wasn't right. But now what do I do? And the hard part for that, Dr. Lumley is, if I'm asking for 30 grand a month in coverage, and I'm 50, and maybe I have high blood pressure, or I'm, you know, taking, you know, an SSRI, whatever it might be, it's gonna make it really hard to go get that policy, right? And it's also gonna be more expensive. So you know, that's why we kind of talked to, you know, early residents and early attendings on locking that in right away, is super important. Now the adverse side of that we had policyholders in that group that got it while they're in residency, and they just called us and said, Hey, I lost my group, I need to increase, right? Awesome. Perfect. So we kind of saw both sides of the spectrum. But I always tell docs is like anything can happen. Right? Not only from a disability perspective, but even an employer perspective, I could be a W two for 10 years, and all of a sudden, that's why that's gone, right? So those things happen. Yeah. Okay, so all right, let's, because we talked about, like, you get it through your employer, we've talked about stacking it, which I think is like, super unique, has not been something that I've ever thought about. But you know, as you think about the number of people who do moonlighting outside of their job, and have alternative sources of revenue, point 8.6 FTEs with their full time job, and then pick stuff, pick up other weekend gigs. And then this last one of like, I'm up, I'm an attending, I was w two, now I became 1099, either my choice or not my choice. How do people sort of go about the process of enrolling for disability? Sure, sure. employer or outside of their employer through someone like you? Yeah, so through their employer, it's going to be upon orientation, right? So if I start a new gig, you know, I'm going to sign my onboarding paperwork, I might kind of check those boxes, right? That's going to be kind of standard. Now, a lot of times that I don't know if I mentioned this earlier, with group coverage, 99% of the time, it's not going to be true on occupation. Okay, so if you're, you know, clinical anesthesiologist, or your surgeon working at a hospital system, any group benefit that you get is not going to be onoc. Okay, so if you can even remotely be a Walmart worker, right, like a greeter and earn income, that benefits going to stop. Okay, so okay, really important to know with with group coverage. You know, what we always recommend is going to find an independent agent. Okay. And so what does that mean? You want to find a broker that can show you all of your options. Okay. And so I always kind of break this down, we do our lectures, there's three really ways to buy that you can buy online, which, you know, we don't really recommend because as you know, there's a lot of nuances to disability insurance. And so you know, do your exploration, do your fact finding online, there's a lot of great Intel out there, you know, podcasts such as this, go do your learning online, but don't buy it online. Second option is to go directly to a carrier, right? Those are called captive agents. Okay, so a captive agents going to be able to sell you one product from one insurance carrier. Okay, now that may be good, right? There's a lot of value in that. But what you're doing is you're siloing yourself out of the other options. Now, I've talked to a lot of residents, you've been a resident, time is your most precious commodity. So do you really want to go shop? The answer is always no, right? You don't want to go do that, right. And so the best option is really to go with that independent broker. And so we, and most other brokers out there, there's a lot of great brokers will work on behalf of our doctors, obviously, but we are the middleman to the big five is what we call them. So there's five carriers that offer true on occupation disability insurance, right. And so what we do is we provide those five options kind of side by side, right. So, you know, to answer your question, how does that process start? Well, it kind of starts with, you know, I need to go fill out a quote, okay. And that can be a lot of things. Okay, it could be five questions, it could be 20 questions. Typically, it takes about five minutes, but you want to be honest there, right? What prescriptions am I on? Like what medical history do I have? Okay, because if you lie about those things, that can affect us down the line. But we have to, you know, we have to get those quotes and get those personalized quotes. And from there, you know, you're gonna, you're gonna want to go talk to somebody that, you know, knows what they're talking about, right. So, you know, again, if I hurt my knee, I'm going to go to a knee specialist so that they can help me put a plan of care in place, you know, do I need surgery, you know, they're gonna ask me a ton of questions, I'm going for that expertise. So you want to go have that meeting. Next step is to really just put an application in. Okay, so of those five options, let's just say that I have one in mind that, you know, premium looks good, all the riders are good. You know, it's everything that I really kind of think I need at this point, and I can grow into it, I'm going to submit an application with that carrier. And all that is, is I'm going to fill out a medical questionnaire. And I'm going to go into underwriting. Okay, and I think we talked about this on our on our pre call, insurance carriers are just big calculators. That's all they are. They're just assessing risk, you know, Dr. Lumley, what's the risk on Dr. Lumley, and that's all they're doing at that point. And so from a resident's perspective, or an early attending, it's a lot easier to get through underwriting. Why? We're younger, we're healthier, we don't have, you know, we're not, you know, rock climbing, we're not doing all these other things, because we don't have time for it, right, we don't have money or time. So we can kind of go through underwriting a little bit faster. Again, back to my my example, if I'm 50, and I'm asking for 15,000 or 20,000, much in coverage, that's they're gonna put a little bit higher lens on that, right from an underwriting perspective. Yep, yeah. So we'll go through that application, and we're gonna get an offer back. Okay, so that offer is what we're going to sit now we actually have something to buy. I think that's a big misconception conception that I, you know, want to kind of clarify a lot of people don't start the process. Because they feel like, okay, if I put my name into a, you know, a quote form, I'm gonna have something to buy in 48 hours, right? Like, am I really ready for this? And we, we don't even have anything to sell you after 48 hours, right? Like, you have to go through that whole process to actually get something tangible from an offer perspective, to buy something. So that can take two weeks, it can take three weeks. And so I think the biggest thing is just to know that there's a process that goes through this. And it's not just a quick hit, like, hey, I'm going to go get a life insurance quote, or I'm going to go get a PNC insurance quote, and I'm, I'm going to be enforced right away. Like, there's a whole process that goes in place there. So we have, you know, so we have folks that are on this podcast right now, that are residents and fellows, attendings of various stages of their career, you know, carving them out into buckets saying, you know, got residents and fellows in one bucket, we've got attendings in the other, wherever they are in their spectrum, you know, what advice would you give to residents and fellows that are looking at this and saying, to your point, like, man, I have so much on my plate, this is crazy. I don't have time to think about this. Like, yeah, no, not right now. Maybe when I finish residency, and I've got some time, maybe, maybe when I'm a young junior attending, and I could take some TO, I'll think about doing this. Sure, sure. And that's, that's really the battle that we face, right? And as you can imagine, Dr. Lumley, we have a busy season. And guess when that is? It's upon graduation, right? They were told at orientation, they need it. And they were so heads down on training to become a doctor that, you know, it just wasn't a priority. And that's fine, right? Everyone's kind of on their own timeline. But some things to consider are, you know, every year you wait, you're going to typically pay about 5% more, right? Okay, so you're going to pay more just as we get a year older. Okay, so that's the first factor. Second factor is we're kind of risking our health to a certain extent. Okay, I had a situation last year, I had, you know, a herniated disc that led to some blood clots and a foot drop and all this stuff, otherwise young and healthy. Okay. But now if I were to go get a policy today, I would be declined. Right? There's there's certain issues that came up through that, that situation that would inhibit my ability to go get a policy. So again, if I'm a second year resident that was kind of putting this off and that happened, I'd be in trouble because now I'm looking at income that I can't go protect. So we're risking our health at that point. And then the third, the third thing I would say would be there's access to discounts. So when you're in training, there's discounts that these carriers will provide, okay, it could be 10%, it could be 30%. But when we're talking 30% savings on a low rate, because we got it in residency already, you know, map that out over 10 years, 20 years, you know, there's there's tremendous savings there. And so those three factors are really, you know, come into play there. But the biggest thing is, I'm so heads down, how do I lift my head up from time to time to think about and what we always tell young docs is have a plan. Even if you're not ready now, know that, hey, I'm going to do this in six months. And here's what my premiums going to be, because I think a lot of folks will say, Well, I just, you know, I know, it's going to cost me money, I don't really know what that is. But I'm just going to wait, right, I'm going to wait till I get that first paycheck, then I'll do it. You know, so, which that can actually harm them, again, you're, you're, you're risking your health, and you're just going to pay more at the end of the day. So those are kind of the key components from a resident or a fellows perspective of why they should do this kind of now, but totally get it. That, you know, again, it's residencies head down, like, I'm going, going, going, I don't have a ton of money yet, you know, can I really even fit this into my budget? You know, so all those questions arise. So maybe a stupid question, but like, does anything change at all, when I make a life change in residency or as an attending, and I'm no longer single, Dr. Lumley, I now have a partner or spouse, and then ultimately, maybe I have a family, does anything change at all in the application process or in the need or anything like that? Not typically on disability insurance, right? So they're looking at you as a, as a physician, right? They're looking and they're assessing that risk. And really, the rates are made up of five real key components, right? It's, it's your age, it's your gender, it's your medical specialty, right? It's where you practice, okay, and then any medical. So let's unpack that a little bit. Specialties interesting, right? These carriers will look at every specialty a little bit differently. You know, and so when you look at a family med doc versus an anesthesiologist or an orthopedic surgeon, all the carriers will classify those as occupation classes, and some of them will look more favorably on others, right? So anesthesiologists, we know that there's a high probability that they're going to have a really good rate with with one or two of those carriers, right? And so, so specialty is a big deal. Also, from the standpoint of cost, right, a family med doc is going to pay a little bit less than an orthopedic surgeon, right? You know, they're, they're gonna, they're protecting more from an orthopedic surgeon's perspective, income perspective. You know, secondarily, state, that's a big thing. Where you practice, the carriers all look at states differently. California, as you can imagine, a little bit more expensive there, right? So if we are out, you know, lecturing in a residency program, and one of the chiefs is saying, you know, hey, I'm going to go do a fellowship in California, well, it's like, hey, let's knock this thing out now, because you're going to save a ton of money. Or there's the adverse, I had this when I was in Miami, there was a chief that was moving back to Houston. And she was great. But she was actually ran her quote, she was going to save money by doing it in Texas. Right. So it's like, you have to look at those nuances. Because the rates are all and that goes back to don't do this online. You know, like, you have to go talk to somebody that knows what they're doing. So they can really guide and navigate those those different nuances. Okay. Well, I guess, you know, we're kind of butting up against the end of time. And I just want to ask, you know, you have encountered 1000s of young physicians throughout the journey of their career. And are there any, like, you know, points of advice or, or, or things that you have picked up that sort of just stick out in your mind that say, you know, disability insurance? Yes. But beyond that, here's some things that I would just say, you should be focusing on in residency that I think will kind of make your journey after residency a lot smoother. Sure, sure. Yeah. You know, and our mission lately has been more around kind of physician wellness and resident wellness. And so, you know, the quote was given to me by one of our partners, Dr. Francis May Harden. She's awesome. She's an EMT surgeon. And she gave me the quote, it's it's if you don't make time for your wellness, you'll be forced to make time for an illness. And so I kind of thought about that. I'm like, okay, well, that that's, that's perfect for residents, right? Because they're so head that heads down that it's like, what social relationships am I not really managing? What from my mental health perspective? Am I not managing my physical health, my financial health? And so we really try to break down into those four buckets and provide education from from that standpoint. Because again, they're just wondering, hey, what's my attending going to ask me? Do I need to I know that I know the answer to that, right? And so you know, from that standpoint, we like to look at all of the resident wellness kind of bucket. And so that quote really speaks to it. But you know, and even being at ASAP this week, there's so many like we talked to a really good tax attorney, just for docs, right? He was an emergency med doc, really good partner there. But you really have to go find your team. And we always kind of equate this to like that back to the Henry's doctors that graduate and come out of training have a target on their back, so to say, right, they're going to be high income earners. So it's kind of like that NBA draft pick for that NFL draft pick, right? Bring in a little bit of levity, we're not making 10 million guaranteed right out of the gate. But we have a really high opportunity to go earn income. And so a lot of times, there's those targets on their back, people want a piece of that, you know, that income, right. And so we always talk about finding your team, you know, find a really good insurance broker, go find a good wealth manager, you know, go find a contract negotiations lawyer, right? I know, you know, you chatted with Michael Johnson last time, he's awesome. Right. And so you got to go find somebody that can go navigate those things, and really build that team. And then ask yourself some questions, right? Like, do I trust these folks? How do they get paid? Right? If I'm going to give you $1,000 a month, like what's your cut? You know, what's in it for you? You know, are they going to answer the text or the phone call if you need them? So no, we really talk about building that team. And it all kind of goes back to having a plan. Yep. Okay. If I don't even know what I don't know at this point. And so if I can start to make a plan, even in year one or year two, you know, I'm going to set myself up for better success upon graduation and, and into my first couple years of attending, right? Like, I have that plan, I want to go execute on it. Obviously, I'm going to, you know, finish training and be the best doc I can. But, you know, I've also got these other things that are super important to me. And I know what I'm going to go execute on. So those are kind of the, you know, the teamwork approach that we we like to talk about. Yeah, you know, I think about like, you know, assuming you've got the trust, and you have the experts that that you do trust, you know, for getting the target behind your back that you've got a team that you put together, I think about physicians so much. You never want to like, boil down what you do to a monetization of time. But you know, when you are but but but from a time standpoint, the hours spent on doing the research online on pursuing like, just like the slightest differences between brokers here, or contract attorneys here. And the time saved in that, from that research, could be spent in so many better ways, whether that's mental health, whether that's a time with your family, whether that's dinner, whether that's going to the gym, things like that, that are so much better for you outside of the hospital. And frankly, you know, when you look at the, you know, as an attending, that the high earners, like when you monetize the time, the amount of time you're spending doing that kind of research, just it doesn't, it's not worth it doesn't go around. No, no. And that's where that's where I love that, that you guys do things like this, right? Like, we want to really go find that partner network, where if we're talking to somebody, and they bring this up, we want to be able to save them time, because it's somebody that we trust, right? I think that's why, you know, doc to doc and pattern have such a good relationship. There's a similar ethos there, you know, I was able to lecture with Dr. Marshall last month. And that was fantastic, right? And so, you know, bringing that financial expertise from a physician's perspective, won them over. I mean, you should see him, they were just eating out of the palms, because they're so they're, they're interested in this stuff, right? And so but but to your point, there's, there's also a lot coming at them. I mean, I've had residents scroll through their email. And you can see that they're just literally getting hammered with emails. And that again, that targets on their back right now, too. So don't think it's just when they they, you know, start earning that income. And so that's where I think it's, it's of utmost important for, you know, you know, groups like you groups like pattern to really push good content out there, so that they can learn. But it's also, you know, incumbent upon the program directors, right, those programs, how do they vet these, you know, partners to come in and really provide good education so that I'm not coming in and bringing somebody in that's just going to sell, sell, like that, I want them to walk away with some value, like they learn something. And so that's, that's really, really important. But your, your time management, and what's the cost of an hour? I mean, that's meaningful. It really is. Yeah. Well, I, you know, listen, for everybody that that is on right now, and everybody that's going to watch this, I have personally learned a lot. I mean, just at the baseline, this concept of stacking, while I don't have a job outside of my anesthesiologist position, I know a lot of people who do. And, and that is a really interesting concept. And one that I'm certainly going to bring up with them, as they think about peeling back to a partial FTE and taking on a side gig of like, have you thought about the coverage that you need there? So So Greg, this has been fabulous. I really appreciate you taking the time to be with us this evening. And any, any last messages for for the audience before we break? No, I would say, you know, again, thank you guys for having us. And thank you for the partnership, I would say, you know, just remove that that negative connotation of insurance at times, right? I really think about that as, you know, how do I protect my lifestyle and any good financial plan, the basis of that is income. And if I can't have that income due to whatever it may be, you know, how do I go protect that ability so that I can go do the things I want to do? So, you know, think about it from protecting your lifestyle, protecting the investment that you are making in training, right and into your career. That's what's most important. So yes, it's insurance, right. But all we're doing is kind of protecting what we've invested in ourselves. Awesome. Thank you so much, Greg. And for everyone here that's been watching, really appreciate the time this evening. And I hope the folks that are seeing this afterwards enjoy this second installment of Fireside Chats with Doc-to-Doc. So thanks very much, everyone. Have a nice evening. Are we recorded? Stop? Rebell?