When a doctor comes to us, there are three concerns we always address:

Losing a job
- This isn’t a major risk, as most doctors can get a new job in 6 weeks
Being too sick or injured to work
- This can be mitigated with Disability Insurance, which we have talked about in a previous episode
Pre-mature death
- This can be alleviated through Life Insurance, and sharing all of the in’s and out’s is the goal of this week's podcast

Doctors: we know that many of you have existing life insurance policies in place, so you probably don’t need to consider anything further regarding the subject. But we’re here to tell you that simply is not true! At MD Financial, we let our doctors know when they have a current policy worth keeping, and have helped many find EVEN BETTER policies than the one they had prior. Come learn and listen to find out if you need to consider Life Insurance, and when you should re-evaluate your existing policy.

A few things to consider as you are evaluating your current policy, and if you should reassess:

MD Financial is independent—meaning we are not obligated to any company
With our fiduciary responsibility, we will never push you towards a policy without your best interest in mind
When we are looking at policies, we compare dozens of companies

Now, let’s discuss the basics of life insurance:

There are two main types: Term vs. Permanent
- Term is meant for a specific amount of time
  - Usually best for young doctors who have a lot of debt and other responsibilities that a premature death would be detrimental to
  - Less expensive
- Permanent lasts your whole life
  - Usually best for high-earning doctors who have maxed out other options for putting away tax-free money
  - Premiums are higher, due to part being the “death benefit” and part going towards the “cash value” of the plan

How much is enough?

There are two ways to look at this:

The financial industry’s rough rule of thumb: 20x your annual income for a death benefit
- This is if you are the main bread-winner
If there are two bread-winners in the house, MD Financial may look at another option- Survivor Needs Analysis:
- We will calculate debts that need to be paid, mortgage, college for kids, etc. then we see what we can find. If you are a doctor couple, or don’t need to

But what if I already have group coverage?

Group coverage typically covers 1-2x your annual income, and you have to be employed at the time of death. Many times, when people get sick, they will quit their job first, making group coverage null and void. We don’t see group coverage as good for the long run, as it might not be there when you need it.

When should I re-evaluate my policy?

Life events that require re-evaluating policies:

Debt changes
Student loan changes
New mortgage
Marriage
Having children

Do I need to get an LI policy on my spouse?

Spouses need life insurance too, even if they are stay-at-home parents. The financial industry rule of thumb is to get a policy worth ½ the Death Benefit (DB) of the working parent. This can help cover a nanny, housekeeper, etc. if something happens to the stay-at-home parent.

What should I expect during underwriting?

Medical Records & Exam
Phone Interview

Expect there to be the usual medical exams, phone interviews, and pulling of your medical records. This is very similar to Disability Insurance, and in last week’s podcast, we went into the underwriting process a bit more in depth. There have been some problems/issues that will raise your LI policy rate:

Lying about drug use
Hobbies that are riskier (i.e. bungee jumping, motocross racing, etc.)
Everyday use of Marijuana—even if it is legal, smoker rates can be applied, sometimes up to 2x the rate of non-smokers
Speeding tickets
Health issues - but know that MD Financial can be your advocate, so let us know in a preliminary interview

Conclusion:

We recommend having your current policies reviewed. Our goal: to find the most cost effective solution for you and your family. Remember, we can take your goals and add them to your budget, to see what you can afford.

Listen on Apple Podcast or Google Podcast

1-888-256-6855

Info@MDFinancialAdvisors.com

Katherine Vessenes, JD, CFP®, is the founder and CEO of MD Financial Advisors who serve 500 doctors from Hawaii to Cape Cod. An award-winning Financial Advisor, Attorney, Certified Financial Planner®, author and speaker, she is devoted to bringing ethical advice to physicians and dentists. She can be reached at Katherine@mdfinancialadvisors.com.

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