News Articles

For Young Physicians: Protecting Your Future

Mon, 28 Oct 2024 16:41:09 +0000

By Kate Sellers
Charles J. Sellers & Co. Insurance
www.sellersinsurance.com

If you’re an early career physician, this article is for you! If you’re further along in your career, and have a younger physician in your workplace or in your family, this is helpful information to share with them.

As young physicians embark on their careers, there are lots of new opportunities—and new responsibilities. One of the most important responsibilities is making sure that you are properly insured. From safeguarding your income to protecting your family and assets, having the right insurance coverage is critical for your long-term financial security.

Disability Insurance: Protecting Your Ability to Earn an Income

For young physicians, disability insurance is one of the most important insurance coverages to secure. Your ability to earn an income is your most valuable financial asset, especially in the early years of your career. You’ve invested so much hard work, time, and money to get to the point that you have this asset, and disability insurance helps you protect that investment.

Disability insurance replaces a portion of your income if you become unable to work due to a disabling condition. While group disability insurance is often available through employers, these policies may not offer adequate coverage for your specific needs. We encourage young physicians to obtain your own personal coverage that you can control and take with you wherever you practice. Because you typically need to medically qualify, it's best to apply for this coverage when you’re young and healthy.

Disability insurance can be customized with riders. There are two we strongly recommend for young physicians:

1. Cost-of-Living Adjustment (COLA) Rider

With a Cost-of-Living Adjustment (COLA) rider, if you have a long period of disability, your benefit will be increased over the years to help keep pace with inflation. This is especially important for young physicians, who have decades of their working lives ahead of them. Without a COLA rider, the purchasing power of your disability benefits could erode significantly over the years.

2. Guaranteed Purchase/Future Increase Option Rider

As a young physician, your income is likely to increase substantially over time. A Guaranteed Purchase or Future Increase Option Rider allows you to increase your disability insurance coverage in the future without needing to undergo additional medical underwriting. It’s important that your disability coverage grow along with your income. With this rider, you can ensure that your disability benefits reflect your earnings potential without worrying about future health changes affecting your insurability.

Onondaga County Medical Society endorses a disability insurance program for its members, offered by our agency. Please reach out to us if you’d like more information.

Life Insurance: Protecting Your Family

Another key insurance consideration for young physicians is life insurance, particularly if you have a spouse or children who depend on your income. Life insurance can provide financial protection for your loved ones in the event of your untimely passing, ensuring that they are not burdened with financial stress during an already difficult time.

For young physicians, term life insurance is often the most practical and affordable option. Term life insurance provides coverage for a specific period—such as 20 or 30 years—at a fixed premium. It’s designed to cover the years when your family is most financially vulnerable, such as when your children are young or when you still have significant debts.

Personal Liability Insurance: Protecting Your Assets

Auto insurance and home or renters’ insurance policies generally include a level of personal liability coverage. This coverage protects you if someone is injured on your property or in an accident involving your vehicle, and they sue you. Consider increasing the liability limits on these policies.

In addition to auto and home/renters’ insurance, young physicians should consider purchasing a personal umbrella liability insurance policy. Umbrella insurance provides an extra layer of liability protection beyond the limits of your other policies. For example, if you’re involved in a serious accident and the damages exceed your auto insurance’s liability limit, an umbrella policy would cover the additional costs, up to its limit. If you don’t have enough insurance to cover a judgment, the person who sued you can collect against your future income and certain assets.

For young physicians, umbrella insurance is an affordable way to protect your future earnings and assets from significant financial loss due to lawsuits or major liability claims.

Conclusion: A Holistic Approach to Risk Management

As a young physician, you have a lot on your plate as you launch your career. Finding the time to take a proactive approach to insurance is essential for long-term financial security. Disability insurance protects your income, life insurance safeguards your family, and personal liability insurance shields your assets. By securing these types of coverage early in your career, you can ensure that you’re prepared for any challenges that come your way, allowing you to focus on what matters most—your loved ones, your patients, and your future.

Why Small Businesses Need Crime Coverage

Thu, 12 Sep 2024 14:05:13 +0000

In today’s complex business environment, small businesses face a wide array of risks that can threaten their financial stability. One often underestimated risk is crime, particularly theft by employees- even tenured and trusted ones. While many business owners assume their standard Business Owners’ Policy (BOP) offers sufficient protection, most BOPs provide only a small amount of coverage. It’s crucial for small businesses to understand the limitations of their current coverage and consider adding crime insurance.

The Limitations of Standard Business Owners’ Policies

Most BOPs provide limited coverage for employee theft, typically capping coverage at around $25,000. While this may seem sufficient for minor incidents, the reality is that thefts often go undetected for extended periods, leading to significant losses that far exceed this limit. For instance, in one case, employees of a high school stole over $500,000 over 5 years¹. In a second case, an employee embezzled $162,000 from a Western New York medical office². Such losses can devastate a small business, highlighting the inadequacy of standard BOP coverage.

Understanding Crime Insurance: Beyond Employee Theft

A standalone crime insurance policy goes beyond the basic coverage provided by a BOP, offering protection against a broader range of criminal activities. Here’s a closer look at the key insuring agreements that may be selected on a crime policy and the types of coverage they provide:

Fidelity Coverage: Protects against employee theft, including theft of client property and ERISA coverage for retirement plans.
Forgery or Alteration: Covers losses from forged or altered outgoing negotiable instruments, such as checks.
On-Premises Coverage: Protects against theft or criminal destruction of property on the premises.
In Transit Coverage: Offers protection for money and securities while in transit, whether with an employee or an armored vehicle service.
Computer Crime: Includes coverage for losses due to computer fraud and the associated costs of restoring damaged software and data.
Funds Transfer Fraud: Protects against unauthorized transfers from the insured’s accounts.
Social Engineering Fraud: Covers losses from deceitful manipulation, such as cases where businesses are tricked into sending payment to a fraudster, resulting in a significant financial loss.

Protecting Your Business: The Need for Adequate Coverage

Even with stringent internal controls, no business is entirely immune to the risk of crime. The examples above illustrate the wide range of threats that can jeopardize a company’s financial health. Investing in comprehensive crime insurance is not just about mitigating risk; it’s about ensuring the long-term sustainability of your business.

For small businesses, particularly those with limited resources to absorb significant losses, the peace of mind that comes with adequate crime coverage is invaluable. By working with a knowledgeable insurance agent, you can tailor a policy that addresses your specific risks, ensuring you’re not caught off guard by the limitations of a standard BOP.

Conclusion: A Proactive Approach to Crime Coverage

In an uncertain economic environment, where businesses are increasingly vulnerable to various forms of crime, it’s essential to take a proactive approach to your insurance needs. By understanding the limitations of your existing coverage and exploring crime insurance options, you can protect your business from potentially devastating losses. Don’t wait until it’s too late—speak with an insurance professional today to ensure your business has the protection it needs.

For more information on crime coverage and how to protect your business, contact us at Sellers Insurance. Email us at insurance@sellersinsurance.com or call us toll-free at 1-800-333-5440.

¹ https://www.nytimes.com/2018/08/14/nyregion/connecticut-school-cafeteria-theft.html

² https://buffalonews.com/news/local/crime-courts/depew-woman-pleads-guilty-to-embezzling-from-williamsville-medical-office/article_b7f15b68-d734-11ee-a882-6f8f3a9af77a.html

Disability Overhead Insurance

Tue, 09 Jul 2024 18:17:36 +0000

Are you a professional Business Owner? If so, you'll want to check out this short webinar created to help you understand why Disability Overhead Insurance is crucial for your practice. When a sickness or injury affects your ability to work, overhead insurance can help your business carry on. For more information on how Disability Overhead Insurance can protect you and your business, please contact us!

Disability Overhead Insurance

Cradle Beach

Fri, 21 Jun 2024 13:51:34 +0000

We had the pleasure of helping out at Cradle Beach- one of our favorite volunteer days of the year! The weather was wonderful, as were the staff, who had projects ready and prepared for us to jump into action. We assisted with organizing Hygiene Kits for Summer and painting the newly renovated treehouse.

We're very grateful for everything Cradle Beach does for the families and communities around us. If you're interested in learning more about their work, visit their website: www.cradlebeach.org. Thank you for letting us serve your cause- and here's to another amazing summer at Cradle Beach!

Questions To Ask Your Employer About Your Disability Benefits

Fri, 29 Mar 2024 18:45:37 +0000

By Kate Sellers, JD, CLU®
Vice President, Charles J. Sellers & Co., Inc.

If your employer provides you with disability insurance, that’s a terrific employee benefit. While no physician wants to think about being sick or hurt and unable to work, it’s a real risk, and the financial impact can be devastating. So it’s important to not only have disability coverage, but to understand the coverage that you have – there are huge variations between employer disability plans. It’s better to find out exactly how you’re covered now, while you’re healthy and can make necessary adjustments, than to find out once you need the benefits that you don’t have what you need. Here are questions to ask your hospital system or group’s HR department about your disability coverage:

How much of my income is covered?

Employer disability plans cover a percentage of your monthly income (up to a cap – see below), and that percentage can vary. Your plan may cover 60% of your income or more, or it may cover a lower percentage unless you buy up.

What’s the monthly cap on benefits?

This question is key for physicians.Employer plans have a monthly cap on benefits.If your plan covers 60% of your income with a $15,000/month cap, and you earn $380,000/year (or $31,666/month), you won’t receive disability benefits of $19,000/month (60% of your income).You’ll receive $15,000/month.These caps vary between employer plans, so it’s important to know what yours is.

Are my benefits taxable?

Knowing whether your benefits will be taxable is also important. Typically, benefits from personal disability insurance are tax-free, when you pay your own premium with after-tax dollars. But some employer-paid plans are set up so that if you receive benefits, they’re taxable. If you know your benefit is $12,000/month and is taxable, it may be something more like $9,500/month after taxes. This can widen the gap between the income you’re bringing in now and what you’d end up with if you were disabled.

If I leave this job, can I take any disability coverage with me?

Most people today don’t stay with the same employer throughout their careers. The next practice setting you work in may not offer disability benefits, or may offer less robust benefits. Typically, only a small portion of the disability benefits offered by an employer can be “ported” with you if you change jobs, so it’s important to know this and plan ahead. If you change jobs after you’ve developed a health condition, and find out that your new employer doesn’t offer sufficient disability benefits, you may not be able to secure new personal coverage at that time.

In our agency, we’ve been helping Medical Society members secure the disability income protection they need for over 70 years. We recommend that you ask these questions now, and if you find that your employer coverage leaves an income gap that you’re not comfortable with, look at your options for a personal disability policy to help close that gap.

LTC Awareness

Thu, 16 May 2024 17:02:06 +0000

Long Term Care Insurance Awareness Month

Why Purchase LTC Insurance?

With Americans living longer, the need for long term care is great. 70% of people turning 65 can expect to use some form of long term care during their lives.*
The cost of long term care continues to increase each year. LTC Insurance can help cover these costs. The average cost of care in a nursing home in Western New York is $132,648/year. In the Long Island area, it is $166,008/year.** Click this link https://nyspltc.health.ny.gov/rates.htm to find the cost of care in your area.
Caregiving is not a short-term proposition: While almost half of caregivers have been providing care for their loved ones for more than three years, one in four has been doing it for five or more years.***
LTC Insurance can help ease the financial, emotional, and physical strain your care can put on your loved ones.
LTC Insurance can help you maintain your freedom and give you the control to determine how and where you receive care.
LTC Insurance can help to protect the assets you have worked so hard to build.

Important Features to Look for in a LTC Insurance Policy

Tax Qualified - affords you tax advantages including a state tax credit of up to 20% depending on your income, as well as federal tax deductions based on age.
Cash Benefit – receiving a portion of your policy in cash can be very helpful as you develop a more permanent plan of care.
Home Health Care options – to help keep you in the comfort of your home for as long as possible.
Facility Care – ideally one that will pay to reserve your bed should you need to leave the facility for any reason. You don’t want to have to leave your “new home” after settling in.
Compound Inflation options – to build your benefit amounts to help prepare for the increasing costs of care in the future.
Built-in Care Coordinator – a licensed health care professional to help you and your loved ones create an individualized plan of care to meet your specific needs.
Included benefits such as Respite Care, Waiver of Premium, and an International Benefit.
Optional benefits for partners applying together to maximize your care and benefits.

*2019 US Department of Health and Human Services, www.longtermcare.gov

**2021 New York State Partnership for Long Term Care, https://nyspltc.health.ny.gov/rates.htm

***The Senior Care Index Report - Care.com

Cyber Alphabet Soup

Thu, 16 May 2024 17:28:27 +0000

Cyber Alphabet Soup: BEC and MFA

by Kate Sellers

Cybercrime has been rising significantly over the last several years. It’s probably on the list of “things that keep me up at night” for most business owners. There are ways to address concerns about cyberattacks and cybercrime, with cyber insurance being one of them. We’ve been talking to business owners about cyber insurance for about the last decade, and many of our customers have decided to protect their businesses with this coverage. Of course, proactively trying to limit your business’s vulnerability to cyberattacks is critical, as well.

Many data breach incidents stem from Business Email Compromise (“BEC”). BEC occurs when a cybercriminal accesses your business email account, or one of your employees’ email accounts. This can happen if the attacker guesses or finds a password. The cyber attacker may then be able to see all the emails in that account. Many email accounts are chock-full of confidential information that the attacker can exploit – a customer or patient’s personal information, including their financial information, or financial information about your business. If this happens, your business will be legally required to notify individuals whose personal information is reasonably believed to have been accessed, and this can be costly. Moreover, there can be other financial fallout from BEC, including harm to your business’s reputation.

The best way to prevent BEC is with another acronym – MFA, or Multi Factor Authentication. MFA is a cybersecurity enhancement that requires someone logging into an account to present two forms of credentials. The credentials can be from any of these three categories: something you know (like a password), something you have (like a smart card), or something you are (like your fingerprint). If your business is using MFA, and your password is compromised, a cyber attacker can’t access your account, because another form of verification is required to do so. This can take the form of a push notification to your cell phone, for example. There are free and low-cost alternatives available to enable MFA, which can help prevent most BEC. In turn, this helps your business avoid the costs associated with BEC, including harm to your business’s reputation. Most cyber insurers won’t consider placing coverage for your business if it isn’t using MFA for remote access of your system.

Taking a “belt and suspenders” approach – enhancing your cybersecurity measures with steps like MFA, plus purchasing a good cyber insurance policy – is the best way for business owners to get a good night’s sleep.

Need for Life Insurance

Thu, 16 May 2024 17:28:44 +0000

The COVID-19 pandemic has not only affected our daily lives, it has also prompted many of us to reassess our physical and financial well-being. This has led to an increased awareness of the need for life insurance. However, the number of Americans with life insurance has continued to decline. Why is this?

It could be that many consumers believe life insurance is too expensive. The reality is that many Americans overestimate the cost of life insurance. Life insurance premiums are, in actuality, affordable and a policy can be customized to fit your budget.

Another possible explanation is that Americans have other financial responsibilities that they feel take priority over life insurance. This may include paying your mortgage, paying other monthly bills, and saving for your children’s education. But what if you were no longer here to cover these costs? What would happen to your family? That is where adequate life insurance can be is critical.

A third reason not enough Americans have life insurance could be that they don’t know how much coverage or what type of life insurance to buy. There are a lot of options when it comes to life insurance, and it can be overwhelming to sort through it all. This is where we can help! Our life insurance specialists can help to navigate through all of these options to create a customized plan that fits your needs and budget.

The pandemic has taught us how fragile life is and how quickly things can change. Now is the time to prepare for the unexpected. Protect your loved ones’ financial future and protect your peace of mind with life insurance.

-Ellen Behm

Assistant Vice President of Sales, Sellers Insurance

Celebrating 100 Years

Thu, 16 May 2024 17:22:52 +0000

Employment Related Liability

Thu, 16 May 2024 17:29:18 +0000

Protecting Your Medical Practice from Employment-Related Liability in New York State

By Kate Sellers, JD, CLU, Vice President, Charles J. Sellers & Co., Inc.

It’s now been about two years since the #MeToo movement exploded. It’s clear that all employers and supervisory employees have to work to prevent and address sexual harassment, which has existed for too long in many workplace cultures. While being mindful of these responsibilities, business owners and managers also need to consider the potential financial ramifications for our own businesses and workplaces. This is especially true in New York, where new laws addressing sexual harassment and discrimination in the workplace have made it easier for employers to be sued, and harder for them to defend themselves.

Healthcare businesses need to be aware of the potential for employment-related claims. According to the US Liability Insurance Group, a medical practice is more likely to have an employment claim brought against it than a general liability claim. Small practices aren’t immune -- over 40% of all employment claims are brought against businesses with less than 100 employees. The typical power structure in many medical practices – with mostly male physician owners and mostly female staff – results in a heightened risk of actual or alleged wrongful conduct in medical practices. Employment claims can include allegations of wrongful termination, breach of an employment contract, failure to promote, violation of anti-discrimination and harassment laws, wrongful demotion, and retaliation for making a claim of an illegal employment practice. And while sexual harassment scenarios are dominating headlines now, employees may bring claims of discrimination or harassment on the basis of race, national origin, religion, pregnancy, age, disability, and sexual orientation, as well.

New York State has responded to the #MeToo movement with legislation aimed at preventing sexual discrimination and harassment. Legislation passed in April 2018 required all New York employers to establish a written sexual harassment policy and to provide anti-sexual harassment training for employees by October 9, 2019 and annually thereafter. More legislation, signed into law in August 2019, made additional significant changes. For example, effective October 11, 2019, an employee suing for sexual harassment does not need to prove that the harassment is “severe or pervasive,” which is the current legal standard for a claim of hostile work environment. Certain defenses, long relied upon by attorneys defending employers, will no longer be permitted. For successful employee claimants, punitive damages and attorneys’ fees will now be available. And, effective February 8, 2020, the New York Human Rights Law’s prohibitions against discrimination and harassment in the workplace will apply to all employers (currently, these apply to employers with four or more employees).

Medical practices, like other businesses, need to take action to establish a fair and safe workplace culture, by making sure that anti-harassment and discrimination policies and practices are in place, and that all managers and staff are trained to prevent and address improper workplace conduct. But even the best policies and procedures can’t prevent all employment practices claims, which is where Employment Practices Liability Insurance (EPLI) comes into play. This insurance covers the cost of a judgment or settlement in an employment related claim, up to the policy limit, as well as paying defense costs, which in many employment-related claims, exceed the eventual judgment or settlement (if there is one). Coverage for these types of claims is excluded from Workers Compensation and standard Business Owners Policies (although some Business Owners Policies may include or add on some Employment Practices Liability coverage). Employment Practices Liability coverage can be purchased on a stand-alone basis, or as part of a management liability package that can include Directors & Officers Liability coverage (for claims brought in connection with other wrongful acts or omissions by management) and/or Fiduciary Liability coverage (for claims against fiduciaries of employee benefit plans).

EPLI policies can also include coverage for claims of harassment or discrimination brought by third parties, such as patients or customers and vendors (for example, a pharmaceutical representative who visits a medical practice). This coverage is more important than ever for businesses in New York. The 2018 budget legislation provided that employers may be liable to (non-employee) third parties, if the employer knew or should have known that the third party was being harassed and did not take corrective action.

US Liability Insurance Group offers a policy that we have put in place for many of our customers that is specifically designed for medical practices, and it can include coverage for defense costs for claims of patient molestation (availability of this coverage varies by medical specialty). As a valuable add-on, most EPLI policies also provide access to services to help a business prevent or mitigate loss from an employment practices claim. These include sample employment policies, on-line anti-sexual harassment prevention training, a set amount of free consultation with a lawyer or human resources professional, and other smart hiring resources, such as discounts on background checks for job applicants.

When purchasing an EPLI policy, a business should consider what limits to purchase (many of our customers purchase a $1,000,000 limit), as well as the deductible and premium offered by the insurance company. In some policies, the costs of defending the claim are subtracted from the overall limit available for a judgment or settlement (this is referred to as defense “within” or “inside” the limit), while with others, defense costs are covered in addition to the limit (referred to as “outside” the limit). EPLI policies are written on a claims-made basis, which means that they cover claims made during the policy period, subject to the retroactive date. Claims based on acts that took place before the retroactive date, are not covered. If coverage is offered on a “Full Prior Acts” basis, there is no retroactive date, which means that more claims may be covered.

EPLI coverage is now more important than ever for the financial protection of medical practices, with the increased attention being brought to harassment in the workplace and changes in state law. Even if these issues aren’t occurring in your practice, a disgruntled employee can sue your practice, alleging discrimination or harassment. An EPLI policy can help your practice survive the financial impact of such a claim.

Don't Rely on Employer Provided Disability Insurance

Thu, 16 May 2024 17:24:32 +0000

By Kate Sellers, JD, CLU®
Vice President, Charles J. Sellers & Co., Inc.

With more physicians now employed by hospitals and large groups, there are more physicians with employer-provided insurance benefits available to them than in the past. Often, these employment benefits include group Long Term Disability (LTD) insurance. While this is a valuable benefit, most physicians should have their own personal disability income insurance as well, and not rely solely on employer-provided coverage. Here’s why:

Control of Your Coverage

When your employer provides your disability insurance, you aren’t in control of your policy. If your employer’s financial situation changes, and costs need to be cut, your employer may decide to lower benefits or cancel coverage altogether. If this happens while you are in good health, you could secure individual disability coverage, but if at that time you have developed a health condition, you might not be able to obtain a meaningful amount of coverage.

To make sure you maintain some control over your disability protection, obtain your own personal disability income insurance policy. When you do, you own the policy and are the only person who can change it. If you have both employer-provided and personal disability policies, and the coverage your employer provides is decreased or eliminated, your own policy will still be there to protect you.

Employer-Provided Coverage May Not Be Enough

Many of our physician customers tell us that they are covered by their employer for disability benefits, but many don’t know exactly how much disability coverage they have. Employer-provided LTD coverage is based on a percentage of monthly income (for example, 60%), with a set cap. We have heard of physician LTD plans with monthly caps ranging from $5,000/month to $20,000/month, so it is critical to know not just the percentage of income covered, but also what the monthly cap is. If you have an annual income of $350,000, and your employer LTD plan covers 60% with a monthly cap of $10,000, $230,000 of your income isn’t insured. By adding your own personal disability insurance policy, you can increase the percentage of your income that would be replaced if you were disabled, so you and your family wouldn’t have to make drastic lifestyle adjustments.

The effect of taxes should also be kept in mind when thinking about whether employer-provided coverage is sufficient. If your employer pays the premiums for your LTD coverage, your benefits will most likely be considered taxable income. If, for example, your employer’s policy provides a maximum benefit of $15,000/month and your employer pays the premium, your benefits after taxes might be $11,250/month (presuming a 25% effective tax rate). Personal disability income policies, on the other hand, are generally set up so that you are paying the premium with post-tax dollars, so that if you become disabled, your benefits are tax-free. Added to your employer-provided coverage, a personal disability policy can help you receive enough income if you are disabled to provide for yourself and those who depend on you.

Have Coverage that Goes With You, Wherever You Go

Another reason to have your own disability insurance, even if your employer provides coverage, is the possibility that you may change jobs in the future. Most people change jobs more now than previous generations did. What if a future employer doesn’t offer coverage, or offers less coverage? Or if you decide to start your own practice? With an employer-provided LTD plan, you may not be able to take coverage with you if you change employment. Some plans have an option that may permit you to take some coverage with you if you leave your employer, but those conversion policies generally have higher premiums and reduced benefits. If you have a health condition at that time, you might not be able to buy a personal policy. Securing your own disability insurance now means you know you will have that coverage down the road, no matter where your career takes you.

Disability insurance is a great benefit to receive from your employer. But there are risks in relying solely on that coverage for your financial protection from disability. Having your own personal disability insurance as well will help ensure that you have enough coverage if you need it.

Charles J. Sellers & Co. is the endorsed administrator of insurance programs for Onondaga County Medical Society members.

Comparing Insurance- Part 1

Thu, 16 May 2024 17:29:44 +0000

Comparing Insurance – Part One

By Kate Sellers, JD, CLU

We frequently speak with customers who are comparing various insurance policies to determine which one to purchase. Comparing proposals for different policies can be more difficult than meets the eye, as I discuss in this two-part series of articles.

Personal disability income policies can be challenging to compare because of the many variables involved. Among other things, the following major parts of the policy may vary: (1) the monthly benefit amount that you would be paid if disabled, (2) the elimination or waiting period (the amount of time after you become disabled before benefits become payable), and (3) the benefit period, or length of time for which a benefit is potentially payable. All of these variables affect the premium and, more importantly, how that benefit would actually be paid if you became disabled.

For example, I worked with a surgeon who was comparing the disability policy I proposed with another policy. When we met and he showed me the other proposal, I saw that it proposed benefits payable to age 65. My proposal was for benefits payable to age 67. Because the policy benefit amounts were about $10,000/month, there was the potential for $240,000 more in benefits with the policy I was proposing. While this may sound basic, there were so many factors being considered, this difference was easy to overlook.

We also offer Group Long Term Disability insurance, which can cover the physicians and/or employees in a practice. Comparisons of those policies offer additional challenges. As with a personal Disability Income policy, the first step is to make sure the benefit levels are the same (benefit amount, elimination period, and benefit payment period). You also need to compare whether the same individuals in the practice are being insured, and at the same levels. We have seen practices that are evaluating proposals for this coverage compare premiums without first making sure that the basic benefits offered were comparable.

Life insurance can also be tricky to compare. I had a physician customer tell me that he found a less expensive term life insurance option than the proposal I had presented. It turned out that the seemingly lower-cost option did not include a disability waiver of premium benefit. This allows you to stop paying premiums if you become disabled for a certain length of time. (We strongly recommend this benefit to make sure you never need to let life insurance coverage lapse because you can’t afford the payment when disabled). The proposal he was looking at did not specify that waiver of premium was not included, but when the physician asked the broker who had provided him with the quote, it turned out that it did not. Once the physician had proposals that provided similar benefits, the premiums were comparable.

In the second article in this series (“Comparing Insurance – Part Two”), I’ll discuss the challenges of comparing package insurance policies, using a trusted agent to help you compare policies, and making sure that value as well as premium guides your insurance decision-making.

Comparing Insurance- Part 2

Thu, 16 May 2024 17:26:16 +0000

Comparing Insurance – Part Two

By Kate Sellers, JD, CLU

This is the second article in a two-part series about comparing insurance policies. In the first article, I discussed the challenges involved in comparing different disability policies and different life insurance policies. Below I discuss other types of policies and make additional recommendations for when you are comparing one policy with another.

Another challenge can be comparing package policies, such as a Business Owners Package or your Homeowners Policy. These policies bundle many different coverages together. This can make comparison more difficult. For example, two Homeowners Policy proposals might provide the same amount of property coverage on the dwelling itself and the same amount of personal liability protection. But one policy could provide coverage for backup of sewers and drains up to the policy limit, while the other policy might not offer any of this coverage. While that difference might seem minor when you are looking at proposals on paper, it’s a difference you would feel if a sewer backup inundated your finished basement and ruined carpet, furniture, and electronics.

Of course, no one has unlimited time to research the differences between policies, especially a physician facing many professional and personal demands. This is why we recommend that if you are comparing policies, you work with an agent whom you trust or who is recommended to you by a trusted source. A good agent will help you compare policies and make an informed decision. It is important that you share the proposals you are comparing with the agent, as he or she has the experience to identify key distinctions between policies. Sometimes a practice business manager or a physician is reluctant to share a competing proposal with an agent, thinking that will keep the practice from getting the lowest possible premium the agent can offer. But without the ability to see exactly what is being proposed, it is very difficult to know if a particular comparison is based on the same benefits, and the differences may be difficult to detect if you aren’t working with insurance policies on a regular basis.

Physicians may sometimes be asked by an agent to consider replacing existing policies. When it comes to replacing policies such as life and disability insurance, which require satisfactory health status and medical history to be issued, special care should be taken. You should never cancel an existing policy until you are certain that a new policy has been issued. There may be other drawbacks to replacing existing life or disability coverage that should be discussed with a trusted agent. Although it is against New York State law for an insurer or agent to make misrepresentations about insurance policies or incomplete comparisons, this conduct does unfortunately occur.

Finally, while cost is an important factor, the focus should be on value – what are you getting for your premium dollars? There can be important intangible factors, such as the quality and continuity of the service the agent or broker provides. Will your agent review your coverage with you periodically and suggest updates and changes so that you are properly insured? If you have a question, will someone be there to answer your call and help you? And if you have a claim, will your agent help you through the process? We recommend that in selecting insurance coverage you consider the premium, of course, but in the context of the overall value offered by the policy, the insurance company, and the agent selling it to you.

Why Do Attorneys Need Disability Insurance?

Thu, 16 May 2024 17:30:17 +0000

By Kathleen Sellers, JD, CLU®

I currently work in my family business, which specializes in disability insurance for professionals. Previously, I practiced law for about twelve years, first as a federal court clerk, and then in the litigation practice group at a large local firm. I remember that when I was in practice, I rarely thought about my disability insurance (even though it was “in my blood”). I was too consumed with juggling a busy practice and raising a young family. I should have thought about it though – and so should you. Here’s why.

If you are a sole practitioner or in a small firm, chances are that you don’t have disability insurance through your firm. You need to secure disability insurance so that, if you got sick or injured and couldn’t work, you’d be able to pay your mortgage or rent, make your student loan payments, or pay your children’s tuition. While the goal should be to purchase benefits that would come as close to your regular income as possible, if that isn’t affordable, at least putting some protection in place would be better than going without any safety net at all.

If you work for a medium-to-large firm, you likely have coverage through the firm. But do you know how much income you would have if you were disabled? Most people we speak with don’t. The time to find out is now, not when you need it. Most group policies covering an employer group, like a law firm, cover a percentage of your income, with a monthly cap. Do you know what the cap is? And do you know if your disability benefit would be taxable? This depends on how the coverage is structured. We advise sitting down with an experienced agent to review your coverage, run the numbers, and see if you need to supplement with your own personal disability insurance policy to fill in any gaps.

If you work for a government entity, you should review your disability protection as well. Some governmental entities (such as the county government) do not provide disability insurance coverage for their employees, including the lawyers that they employ. If that’s your situation, you need to apply for your own personal policy, or you risk financial devastation if an accident or illness leaves you unable to practice law for a long period of time (or permanently). Some government jobs provide disability benefits, but these vary and should be evaluated so that you have a good idea of what income you’d have if you were disabled, and supplement with a smaller personal policy, if necessary.

Many financial professionals will tell you that disability insurance is the second most important insurance protection you will buy, second only to your health insurance in terms of ensuring financial security. That’s because the risk of disability is real. The Council for Disability Awareness has an on-line tool that calculates your risk of becoming disabled based on disability statistics (your “Personal Disability Quotient”) at www.whatsmypdq.org. I plugged in my information and found out I have a 20% chance of being disabled for three months or more before I retire, and the average length of a long term disability for someone like me is 86 months. That’s a level of risk I’m not comfortable with, without a backup plan. And the financial consequences of being disabled can be disastrous. A 2014 study of consumer bankruptcy filings identified the following as primary reasons: medical bills (26%), lost job (20%), illness or injury on part of self or family member (15%) (See disabilitycanhappen.org/disability-statistic/).

If you need disability coverage, it’s important not to put off applying. To purchase a meaningful amount of personal disability insurance, you must be in good health. Disability insurers evaluate the risk that you present when you apply by looking at your medical records, asking you to answer health history questions, and often requiring a medical exam, and if you have serious health issues, you won’t be able to purchase coverage. With some health issues (a back problem is a common one for attorneys), coverage may be issued with an exclusion for that health issue. The sooner you apply, the better your chance to qualify for coverage, and for that coverage to be as comprehensive as possible.

So take some time to think about your disability insurance, take care of it, and get the peace of mind that comes with doing so.

2018 Business First Listing

Thu, 16 May 2024 17:27:22 +0000