Q. Every month, I get mail from the American Medical Association, ACEP, and other organizations trying to get me to buy life or disability insurance through them. Why do I get these, and are these thxe best policies for me?

A. Professional associations, such as ACEP, offer benefits such as insurance policies to their members for various reasons. First, they understand that these are important financial products for their members to purchase. When physicians become disabled without disability insurance, especially early in their careers, a financial catastrophe often occurs. Life insurance is similar. If you die prior to reaching financial independence, those who depend on you financially will very much appreciate your making up the difference between your portfolio size and what it would take to be financially independent with a solid life insurance policy or two. Your association wants to make it easy for you to do the right thing.

Second, some doctors have a difficult time obtaining disability or life insurance on the open market due to health problems or dangerous habits. Association policies often ask fewer health questions; do not generally require a physical; and rarely ask about dangerous hobbies, such as rock climbing, scuba diving, flying, or skydiving. For these doctors, the association policy may be their only opportunity to get the coverage they need or want at a reasonable price. People in these situations see these offerings as important benefits of the association and are more likely to join if these benefits are offered.

However, what cynics would point out is that the insurance agent or company selling these policies is generally sharing revenue with the association. Unfortunately, that conflict of interest ensures the association may not give you unbiased advice on these topics. While it is possible an association group policy is your best option, you need to shop carefully prior to actually purchasing it. You will often find an association policy is neither the best nor the least expensive option.

Association group disability insurance policies generally have three significant flaws. The first is that their definition of disability is usually weaker than that available through a good individual policy. This means it is less likely to pay you in the event that you actually become disabled. The second flaw is that the payout is also often decreased by factors you might not expect, such as Social Security disability payments. The third flaw is that the policy can be changed by the association at any time and usually can’t be taken with you if you decide to leave the association. Emergency physicians should also be aware of other limitations, such as a requirement in the ACEP-sponsored disability insurance plan that you be working at least 30 hours per week. Consider that 15 eight-hour shifts per month, generally considered full-time among emergency physicians, when divided over 31 days is only 28 hours per week. If you are working any less than that, you may not qualify at all for such a policy. In return for accepting these weaknesses, association disability policies are generally less expensive, sometimes much less expensive, than a good individual disability policy.

Association policies often ask fewer health questions; do not generally require a physical; and rarely ask about dangerous hobbies, such as rock climbing, scuba diving, flying, or skydiving.

On the other hand, association life insurance policies are often more expensive than a comparable term life policy for a healthy, nonadventurous physician. For example, I recently received in the mail a pitch for term life insurance from The Hartford insurance company as part of the ACEP insurance program. It offered me, as a healthy, nonsmoking 40-year-old, a $500,000, five-year level term life insurance policy for $57.60 per month, or $691.20 per year. Just for fun, I went to one of the sites on the Internet that will provide you an instant quote for term life insurance and discovered that similar policies could be purchased on the open market at prices ranging from $243 to $920 per year. A healthy woman would have even better rates. Obviously, paying more than twice as much for a policy isn’t a very sound financial decision for most people.

However, there are a few exceptions. If you do not want to do a paramedic physical examination (usually just vitals, routine blood work, drug screens, and a urinalysis) for convenience purposes or because you are afraid it will reveal a medical condition, you may be interested in this policy because it does not require the examination. Also, if you engage in dangerous hobbies, you may also find this policy useful since it asks no nonmedical questions on the application.

A bigger problem for many physicians is that association and other group life insurance policies simply don’t offer large enough benefit amounts. Typical young physicians with a family depending on them should be purchasing a life insurance policy with a benefit of $1 to $5 million, far more than the $500,000 maximum offered on the ACEP-sponsored policy. It would be a hassle, if it is even possible, to piece together multiple group policies from various associations and employers to provide the needed coverage. Group policies can also be cancelled or changed at any time by the association or employer. For these reasons, group life insurance policies are generally, at best, only a supplement to your main life insurance policy.

Despite their flaws, there are situations where both group disability and group life insurance plans are appropriate. But prior to purchasing one, be sure to do your homework and shop around rather than blindly assuming that your association or employer has done that for you.