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Amber Stitt 0:00 

In this Physician Edition Podcast Episode, we'll discuss Future Purchase Options. This will help you determine the difference between an FIO to a Future Purchase Options (FPO) and the Benefit Update Riders, also known as a Benefit Purchase Riders or Benefit Increase Riders. This is a little confusing, but we'll sort it out in today's episode. I hope you enjoy it!


Hi, physician friends. This is Amber Stitt, partner to MD Disability Quotes and owner at The Amber Stitt Blog. Today, we're going to finish our three-part series covering the Future Purchase Option Rider. This is the third video in our disability insurance basic series. So thanks for being here.

Let's get started and discuss what is the future purchase option writer, you can think of your Future Purchase Option Rider as your health shield. If you have this rider on your contract, you're able to buy more coverage in the future after your policy is in place without any medical underwriting. The insurance companies are going to put you through underwriting and part of this process is they're looking at your health history. If you do have any pre-existing conditions, those will be excluded from your contract. And basically, the insurance company's not going to cover that category of risks if it already exists at the time of the application. But let's assume you do not have any of these pre-existing conditions that would modify your plan. And then you are eligible for the future purchase option writer. If you have this, you are able to then buy more coverage in the future depending upon your contract anniversary. And the reason I say it like that is that some contracts have the option to increase annually. Some only let you increase once every three years. There are a few different acronyms for the titles of these different writers. But for today, if you know you have a Future Purchase Option Rider on your contract, you're going to be able to buy more coverage when you're eligible to do so some of the reasons you would become eligible is if you're transitioning from training to practice, you have an increase in income. Or of course, if you're eligible based upon your income, or because you're transitioning from training to practice or the needs of your family change, then those are reasons to then go ahead and exercise that increase option when you are eligible. And if you have the rider, you're able to do so pretty easily. You just have to prove your financial documentation or prove your residency fellowship status. And then your agent on your contract can help you with the steps to then proceed with the increase option. Once you have your contract in place around your contract anniversary is the time you'll receive a letter from the carrier, which your broker or agent should be reaching out to you around that time as well. And that is to notify you that that is your contract window to be able to then buy more coverage. So again, these might be annually or once every three years. But your broker or agent should be able to walk you through the steps and also obtain the pricing for that additional increase to your coverage. That is why we mentioned in the first video that it's really important to work with a team that can help you with these steps. That way, you're on top of the requirements that some of these carriers require as part of your contract anniversary. And then even if you have an increase option that doesn't have any mandatory requirements. It is nice though to have somebody walk you through the steps each year as you have questions.

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What is a Future Purchase Option Rider, this rider will sit on your contract and allow you to buy more coverage after your contract is effective? So depending upon the contract type that you have some purchase option writers are available annually and some are available only once every three years. So think of this purchase option like your health shield. This health shield will allow you to buy more coverage in the future without any medical underwriting. The reason that is important is that any pre-existing conditions that you have at the time of application will be excluded from your coverage. So these insurance companies are not going to ensure the category of risk that you present in the future. But assuming you have no pre-existing conditions that then modify your plan, you're going to be able to buy more coverage in the future, either because you're transitioning out of training, so residency or fellowship to practice, that would be a window of time that you'd be allowed to increase. Or if your income went up and your income supports the need to buy more coverage, then you'll be eligible to do so as long as you have this writer on your contract, you're going to be able to buy more coverage simply by filling out a couple of documents and then supporting your request. Once you have your contract in place, the carrier is going to notify you once a year that it's your policy anniversary, your broker or agent should be reaching out to let you know if you have any mandatory requirements, or that your window is now open to them be able to buy more coverage. This is important to have a team that's going to help you manage these steps whether or not you have any mandatory requirements or that if you're just interested in learning more on whether or not you're eligible to obtain those quotes for the extra coverage, you'll want someone that will be able to walk you through the steps very seamlessly and make sure that you are satisfying all the requirements needed for this increase option in a timely manner. So hopefully this is helpful for you to understand what a future purchase option is. Now, does everybody need a future purchase option writer? Typically, we would say yes, there are going to be some circumstances that a person will just not buy that Increase Option Rider. And that is going to be case by case and we always help you determine how much of an increase rider is necessary for you. And we will be able to walk you through which type of contract or increase option type is going to be best for you. So if you have any other questions on what you have on your policy, or if you'd like a policy review, just let us know we'd be happy to help walk you through what you currently have or what you should have as part of what's best for you and the type of coverage that you need, as well as what's best for your, your responsibilities to your household.

Alright, thanks for stopping by. Thank you for listening. Thank you for joining us on today's episode of the amber Stitt show physicians edition. For more information about this podcast books, articles and more, please visit me at Amber stitt.com. For more information about physician insurance contracts, please listen to the entire physician edition podcast series or visit us at MD disability quotes.com. Thank you for listening

Transcribed by https://otter.ai

Thank you again for joining me, Amber Stitt, in this episode of The Physician's Edition. I’ll see you next time, podcasters!