disability insurance

[TIVAndy]

did anyone purchase this? i know white coat investor has extensive discussion about this topic but wanted to hear from other fellow anesthesiologists. Another person told me that if ur spouse makes decent living don't bother with it. what's ur experience with this tricky insurance?

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[IlDestriero]

I think we all have it.
Your spouse would have to be doing pretty well to continue to provide a good income and quality of life for your family when you cannot work anymore. My wife does quite well, but I still have disability insurance.
At some point in the future, we will have enough put aside to cancel the policy as it is no longer necessary.
Disability is a spectrum. Maybe you have an upper extremity nerve injury and cannot intubate. You could easily retrain in another career and earn a decent income. However if you have a bad MVA and a significant closed head injury you may be unemployable. Like everything, plan for the worst and you'll be in great shape. A family could easily live on less than 1/2 of her income, but that's not the lifestyle we want for ourselves or our children, so for us it's a reasonable cost. You're far more likely to have a disabling injury than die young, and nobody thinks twice about life insurance. Unless it's that universal life nonsense. Think long and hard before you buy any of that.

 

[Celestia]

A family could easily live on less than 1/2 of her income, but that's not the lifestyle we want for ourselves or our children, so for us it's a reasonable cost.

When thinking about whether and how much to buy, I think that this is the key consideration. If you and your spouse are OK with living on a single income and drastically changing your lifestyle, clearly you do not need to purchase as much (this calculation clearly changes when you have kids). You also need to consider the unlikely but tragic outcome of both spouses being affected by either disability or death (same MVA?). In my experience, wives and husbands often have different feelings about insurance - wives typically valuing security more than husbands. ymmv.

Don't forget that disabilities also can increase expenditures.

 

[Wiscoblue]

I've never had disability insurance. We have two incomes and we have saved 10k a year for 20 years now just winging it on two incomes. But I would not advise you to be foolish like me. Buy the insurance. With post tax money. Then get a cheap term life for a couple of million.

 

[PhysicianOnFIRE]

did anyone purchase this? i know white coat investor has extensive discussion about this topic but wanted to hear from other fellow anesthesiologists. Another person told me that if ur spouse makes decent living don't bother with it. what's ur experience with this tricky insurance?

I used to pay for true own occupation disability coverage ($10k / month) for about $300 a month. I dropped that coverage about a year ago because I’ve saved enough to provide for my family indefinitely if I were to stop working. That’s an additional $3600 for the 529 funds every year, or a nice family vacation. I didn't enjoy paying $10 a day for it, but it was probably a good idea to have in place before becoming financially independent. As soon as you've saved up 25x your typical annual expenses, and perhaps also have a plan to cover future college costs (if any), you don't really need the insurance anymore. Same with term life (although this is much, much cheaper so you may keep it anyway). Self insurance is the cheapest insurance there is.

 

[Celestia]

I wouldn't call 25xannual expenses cheap but I know what you mean and I agree.

 

[MD Financial Services Scott]

It really comes down to do you want to outsource the risk on your ability to pay your bills or do you want the sole responsibility. I think it is pretty easy to figure out. Take a look at the last 12 months of your bank statements and thus the outflow, add them up then divide by 12 so you know what your monthly burn rate is. Now that you know that monthly burn rate, if you became disabled tomorrow how long until you have exhausted your assets? When you use this process you can really customize a plan to fit YOU not some standard boiler plate design. Many of my clients use staggered contracts to get the premium down and really trim the riders on these contracts that make the premiums bloated.

 

[Impromptu]

Disability insurance can be good insurance. You spend money on it. Hopefully you won't have to use it. Drop it when you reach financial independence.

Hand in hand with disability insurance is keeping your spending low. Find happiness in simple things. Then, if you were to rely on disability insurance, you wouldn't have to cut back your lifestyle.

 

[gasdoc77]

The insurance industry makes a living by sewing the seeds of fear. I strategically carried disability for a couple of years while we built up a nest egg. My significant other, while working only part time, has potential to make more than enough to maintain our modest lifestyle so we dropped the disability. A great number of blue collar individuals who have far more physical jobs than we do go their entire life without disability insurance. Doctors see sickness and injury all day, skewing our world view and making us easy pickins when selling fear.

 

[Notorious T.E.E.]

...only Guardian has the detailed wording, riders, and strength of contract needed for your profession.

Seems like reliable, unbiased advice.

 

[Man o War]

All contracts are very different and only Guardian has the detailed wording, riders, and strength of contract needed for your profession.[/QUOTE]

What does Guardian offer that Principal doesn't? I just got an additional policy a couple years ago and looked at both companies side by side and there was no difference in riders, own occ status, etc except price.

 

[Ignatius J]

I have it, and I think it is necessary. I do, however, think people are tricked into buying too much.

 

[MD Financial Services Scott]

All contracts are very different and only Guardian has the detailed wording, riders, and strength of contract needed for your profession.

What does Guardian offer that Principal doesn't? I just got an additional policy a couple years ago and looked at both companies side by side and there was no difference in riders, own occ status, etc except price.[/QUOTE]
There are subtle differences in each carrier but as long as the definition, elimination period, benefit period, residual (15-20% is really a push in my opinion), and benefit amount are essentially the same then you can really look at the price as the deciding factor. Now there is a few things we look at as well and those are Ratings of companies (A+ or better), size, $15 Billion or bigger, 100 years or older, and has a MD or DO on staff. The reason I like carriers to have the MD/DO is to know what is required of you physically based on the CPT codes one is billing for and do you have the ability to do that billable based on your particular disability.

 

[Gpan]

Hi, I am about to buy my OWN Long Term Disability insurance and I have a wary feeling about this company called Ameritas. SO my questions is What are the RIDERS that I absolutely need to have in this policy? Can anyone give me a list? I am a healthy 30ish yo male Doctor who do not smoke, no drink, exercise almost 4 times a week. Lab work is ALL normal. I want to get about 10k/ Month policy. How much should I pay per month?

 

[deleted162650]

Hi, I am about to buy my OWN Long Term Disability insurance and I have a wary feeling about this company called Ameritas. SO my questions is What are the RIDERS that I absolutely need to have in this policy? Can anyone give me a list? I am a healthy 30ish yo male Doctor who do not smoke, no drink, exercise almost 4 times a week. Lab work is ALL normal. I want to get about 10k/ Month policy. How much should I pay per month?

Mine is $350ish/mo for 10k/mo benefit with very favorable riders. Own occ is a must. My policy is with Standard.

 

[Man o War]

Hi, I am about to buy my OWN Long Term Disability insurance and I have a wary feeling about this company called Ameritas. SO my questions is What are the RIDERS that I absolutely need to have in this policy? Can anyone give me a list? I am a healthy 30ish yo male Doctor who do not smoke, no drink, exercise almost 4 times a week. Lab work is ALL normal. I want to get about 10k/ Month policy. How much should I pay per month?

My policy is with Principal. I have own occ, cost of living increase (I was able to choose 3 or 6%), i also have a rider called benefit update that allows me to increase my benefit amount every 3 years without going through medical underwriting again if my salary increases. That one came in handy since I went back to fellowship mid career after I already had the policy and got a job after with significantly higher salary.

 

[MD Financial Services Scott]

Hi, I am about to buy my OWN Long Term Disability insurance and I have a wary feeling about this company called Ameritas. SO my questions is What are the RIDERS that I absolutely need to have in this policy? Can anyone give me a list? I am a healthy 30ish yo male Doctor who do not smoke, no drink, exercise almost 4 times a week. Lab work is ALL normal. I want to get about 10k/ Month policy. How much should I pay per month?

The carriers that are good to shop from are Principal, Ameritas, Guardian, Mass, Standard, and Ohio. Speaking to your question of Ameritas, they are a great company, about $20 billion in size, A+ rated and were formed in 1867 so you should be in good shape. As for riders, that depends on what you want out of a carrier, I typically just have the Own Specialty definition (not to be confused with transitional definitions, Medical Occupation definitions, or Own Occ Not Engaged definitions), residual, and sometimes Future Purchase Options, not personally a fan of COLA as it takes about 10 years on claim for a break even of cumulative payments but that is different post. As for the cost it all depends on your age, gender, medical specialty, state you live in, and the discounts you are entitled to from the broker you are working with.

 

[Gpan]

The carriers that are good to shop from are Principal, Ameritas, Guardian, Mass, Standard, and Ohio. Speaking to your question of Ameritas, they are a great company, about $20 billion in size, A+ rated and were formed in 1867 so you should be in good shape. As for riders, that depends on what you want out of a carrier, I typically just have the Own Specialty definition (not to be confused with transitional definitions, Medical Occupation definitions, or Own Occ Not Engaged definitions), residual, and sometimes Future Purchase Options, not personally a fan of COLA as it takes about 10 years on claim for a break even of cumulative payments but that is different post. As for the cost it all depends on your age, gender, medical specialty, state you live in, and the discounts you are entitled to from the broker you are working with.

ok so I have this confusion about this Future Purchase Options riders. In the brochure Ameritas says the FUTURE INCREASE Rider for $5000 on top of the 10K per month is AUTOMATICALLY INCLUDED. Yet in their final offering letter there is this FUTURE INCREASE OPTION RIDER that is NOT included. WTF????

The saleman said that these are 2 DIFFERENT riders and Ameritas only allow to pick one.
SO I asked him IF it is true that I get the FUTURE INCREASE rider automatically included then what is the expected increase in monthly premium? This is his answer: "
The rates to increase your policy will depend on when you exercise the increase (by age). This is standard practice with every company."

Is this true?? Am I over-analyzing this or does it sound a little fishy?

 

[MD Financial Services Scott]

ok so I have this confusion about this Future Purchase Options riders. In the brochure Ameritas says the FUTURE INCREASE Rider for $5000 on top of the 10K per month is AUTOMATICALLY INCLUDED. Yet in their final offering letter there is this FUTURE INCREASE OPTION RIDER that is NOT included. WTF????

The saleman said that these are 2 DIFFERENT riders and Ameritas only allow to pick one.
SO I asked him IF it is true that I get the FUTURE INCREASE rider automatically included then what is the expected increase in monthly premium? This is his answer: "
The rates to increase your policy will depend on when you exercise the increase (by age). This is standard practice with every company."

Is this true?? Am I over-analyzing this or does it sound a little fishy?

They have an Automatic Increase Rider that increases your policy by 4% per year for 5 years, that feature is included.

The Future Purchase Option is paid by you but as you use the feature the cost for that feature goes away so the original cost will actually go down by probably $10 per month. I would not say fishy but certainly they did not do a good job of clarifying it.

Yes the cost of the increased portion of your policy will be issued at the then current age so if you are 1 year older as an example the cost per dollar of coverage is about 4-6% more per dollar of coverage on the increased amount. If you want to PM me I can look at it and give you my opinion of the exact illustration they gave you.