(And When It Surprisingly Is)
What is a Guaranteed Standard Issue (GSI) Plan?
A Guaranteed Standard Issue (GSI) plan is an individual disability insurance policy that does not require medical underwriting.1
Surprisingly, it is the same individual disability insurance policy you would purchase from Guardian on a fully underwritten basis (which requires answering medical questions, a prescription drug check, and reviewing your medical records).
Some parameters are pre-selected for the offering, such as a 24-month limitation for claims resulting from mental/nervous and substance abuse disorders. There is also a $15,000 monthly maximum benefit (between the base policy and Future Increase Option (FIO) Rider), but that is about it.
The cost would be identical if the GSI plan and fully underwritten policies were structured similarly. Therefore, even for perfectly healthy insureds, there is almost no reason not to take advantage of the Guardian GSI offer.
Typically, GSI policies are approved and issued 24-48 hours after applying. Of course, this may vary, especially at the end of the academic year, when many graduating Residents and Fellows choose to purchase disability insurance.
However, even Residents and Fellows early in their careers should take advantage of the Special GSI program as soon as possible, as the insurance company can discontinue it without advance notice.
When Is a GSI Plan Not Guaranteed?
Guardian’s GSI offer is typically unavailable to insureds who applied to an insurance company other than Guardian and received a modified offer (an exclusion rider, limited benefit period, removal of riders, etc.), were declined outright, or withdrew a pending application.
The same is true for those receiving disability benefits of any type (VA disability benefits for those who were previously on Active Duty are a good example) or those who have not been at work on a full-time basis for at least 180 days prior to applying for coverage (those who were previously on maternity or paternity leave are a good example).
When Is a GSI Plan Guaranteed?
A GSI offer provides insureds with medical history the opportunity to purchase an individual disability insurance policy regardless of their health.
The same is true for BMI, or for participation in “hazardous” activities such as rock climbing or SCUBA diving.
This is significant; according to the Milliman 2021 Annual Survey of the U.S. Individual Disability Income Insurance Market, 50% of individual disability insurance policies are either modified (34%) or declined (16%).
Some conditions that typically lead to a modified offer or decline might include the following:
- Have been diagnosed with diabetes or pre-diabetes
- A history of cancer
- A history of self-prescribing
- A history of musculoskeletal issues such as back or neck pain
- Recently had surgery or had surgery where hardware was placed
- Have seen a Chiropractor for treatment or have been to physical therapy recently
- Are currently pregnant or have a history of infertility or complications of pregnancy
- Have been diagnosed with Anxiety/Depression, ADHD, or see a therapist
When Is a GSI Plan Guaranteed (but You May Think Otherwise)?
Believe it or not, there are a few situations where a GSI plan is available, but you might think otherwise.
What Happens In Vegas Stays In Vegas
If you applied for a disability insurance policy with a company other than Guardian and were offered a modified policy, were declined, or withdrew an application, and this was before your start date at the institution in which the GSI plan exists, you still qualify!
For example, you went to medical school at NYU and matched into Emergency Medicine at the Medical College of Wisconsin. You applied for coverage at the end of medical school but were declined before starting your residency at MCW.
Typically, you would no longer be eligible for the Special GSI offering. However, since the decline occurred before your start date at MCW, you still qualify! I call this the “What happens in Vegas, Stays in Vegas” Rule.
The 9-Month Rule
Let’s change the example above slightly.
After you began your residency at MCW, you applied for coverage to a company other than Guardian, but your application was declined.
Typically, you would no longer be eligible for the Special GSI offering. However, you still qualify since the decline occurred within the first nine months of your start date at MCW! For those Residents and Fellows starting on July 1st, this allows the modification or decline to occur through the end of March.
Guardian understands you might not be aware of the GSI offering, apply for coverage elsewhere, and subsequently learn of it. If the modification, decline, or withdrawn application took place in the first nine months of the start date at the institution in which the GSI plan exists, you are still eligible!
You Must Apply to Guardian First!
If you apply to a company besides Guardian for disability insurance, you risk becoming ineligible for their Special GSI program.
Guardian will allow Residents and Fellows who applied with them on a medically or fully underwritten basis to qualify for their Special GSI program—even if they were offered a modified policy or declined. This is shocking, especially since Guardian is now aware of the increased risk.
Additional Information
Click the following link for a list of Guardian GSI Disability Insurance Offers.
Lawrence B. Keller can be reached at (516) 677-6211 or by email to Lkeller@physicianfinancialservices.com with comments or questions.
1 For eligible applicants
2 Optional riders are available for an additional premium. Some policy benefits and features are not available to all occupations. Certain conditions and limitations may apply to certain riders.
The material discussed is for general informational purposes only and should not be construed as a recommendation or advice.
Please note that individual situations can vary; therefore, the information should only be relied upon when coordinated with professional advice.
Lawrence B. Keller is a Registered Representative and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 355 Lexington Avenue, 9th Floor, New York, NY 10017, 212-541-8800. Securities products and advisory services are offered through PAS, member FINRA, SIPC. Financial Representative, The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly-owned subsidiary of Guardian: AR Insurance License #1057229, CA Insurance License #0C37340. Physician Financial Services is not an affiliate or subsidiary of PAS, Disability Insurance Quotes, or Guardian.
