individual disability insurance?

[FlowRate]

I didn't realize how expensive own-occupation disability coverage is. Was just meeting with school-provided financial planner today. Plans for my situation run $115-180/mo. That's a lot of money. Save that % of your income over a career and it turns into a million-dollar nest egg.

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[PistolPete]

I didn't realize how expensive own-occupation disability coverage is. Was just meeting with school-provided financial planner today. Plans for my situation run $115-180/mo. That's a lot of money. Save that % of your income over a career and it turns into a million-dollar nest egg.

I pay about $150 per month for $5000 monthly coverage which includes several different riders including a future purchase option to increase my amount covered once I make more $$$. It's a necessary investment, you need to protect your earning potential, you've spent so many years working towards it! Sign up before you finish training to get a discount.

 

[masterofmonkeys]

I didn't realize how expensive own-occupation disability coverage is. Was just meeting with school-provided financial planner today. Plans for my situation run $115-180/mo. That's a lot of money. Save that % of your income over a career and it turns into a million-dollar nest egg.

If saving 150 per month turned into a million dollar nest egg by retirement age then we wouldn't have a retirement crisis in this country. Also, I think you miss the point of insurance. Which is protecting against the possibility that you won't HAVE a career.

 

[MD Financial Services Scott]

from what i recall the AMA offered the best deal for own-specality disability insurance, it's a loss less than that depending on your state, but you're doing residency in a state that provides cheaper premiums. perhaps one of the only reasons to become an AMA member.

The trouble with the AMA plan is that is not an Own Occupation definition of disability (it is a own occupation and not working definition), it has a total and continuous clause in the waiting period, they increase your rate at 40, 45, 50, 55, and 60, finally they can change the wording, premiums (in addition to the normal age increase/price increase) and or cancel the policy anytime they want.....other than that it is a great plan.

 

[MD Financial Services Scott]

I didn't realize how expensive own-occupation disability coverage is. Was just meeting with school-provided financial planner today. Plans for my situation run $115-180/mo. That's a lot of money. Save that % of your income over a career and it turns into a million-dollar nest egg.

Depending on your age there are a number of ways to have that cost less, most males in residency can get $5k of coverage with Future Purchase options for around $70 per month. Certainly health, exact age, specialty and the state you live in comes into play but that is a ball park....at least based on todays rates that are available.

 

[FlowRate]

Depending on your age there are a number of ways to have that cost less, most males in residency can get $5k of coverage with Future Purchase options for around $70 per month. Certainly health, exact age, specialty and the state you live in comes into play but that is a ball park....at least based on todays rates that are available.

Yeah that's around half of what I was looking at. I'm in MA and Psychiatry is 4M according to metlife so premiums are higher.

 

[FlowRate]

If saving 150 per month turned into a million dollar nest egg by retirement age then we wouldn't have a retirement crisis in this country. Also, I think you miss the point of insurance. Which is protecting against the possibility that you won't HAVE a career.

For sure, I get what it's for, but as with all insurance it's hard to evaluate personal benefit in the context of an already strained resident budget in this expensive city.

 

[MD Financial Services Scott]

Yeah that's around half of what I was looking at. I'm in MA and Psychiatry is 4M according to metlife so premiums are higher.

What is your age and gender, I will let you know.

 

[FlowRate]

What is your age and gender, I will let you know.

26 Male. 5k / 90 day / age 67 was 160/mo with the standard riders (12k increase, 3% COLA, 6k catastrophic, residual >15%).

 

[MD Financial Services Scott]

I will share with you what we would be recommending but it is my assumption that you bought a loaded contract, but why? You have a low probability of using it (about 27-28%) here is a link to our site on probabilities http://mddisabilityquotes.com/resources/faqs/ but then even after that the average long term claim is only 33 months. In addition why did you buy the benefits to age 67 vs. 65? The cost difference is about 15%. Finally you bought a CAT coverage which is only triggered with 2 of the 6 Activities of Daily living being lost. Personally I never had client with a Disability claim that qualified for those since that loss of use typically happens at or after age 70 and this contract is only good until age 67.... I will get you some comparable quotes but it sounds like you have some questions to ask your rep.

 

[MD Financial Services Scott]

26 Male. 5k / 90 day / age 67 was 160/mo with the standard riders (12k increase, 3% COLA, 6k catastrophic, residual >15%).

Ok after a quick review of your age, gender, med specialty and the design you currently have you can have a level premium at $122 for the life of the policy or you can do a step rated policy where the premium is level for the next 5 years then steps up....that gets you out of residency.

 

[FlowRate]

Ok after a quick review of your age, gender, med specialty and the design you currently have you can have a level premium at $122 for the life of the policy or you can do a step rated policy where the premium is level for the next 5 years then steps up....that gets you out of residency.

Thanks for the info! I haven't purchased anything yet, was just looking at various plans. Good to know that cat is probably not worth it.

 

[MD Financial Services Scott]

Thanks for the info! I haven't purchased anything yet, was just looking at various plans. Good to know that cat is probably not worth it.

By the way the step rate plan is $85

 

[PistolPete]

Ok after a quick review of your age, gender, med specialty and the design you currently have you can have a level premium at $122 for the life of the policy or you can do a step rated policy where the premium is level for the next 5 years then steps up....that gets you out of residency.

Which riders do you think are most necessary? I believe the future purchase option and noncancealable policy that is own-occupation are requirements. What do you think about cost of living adjustment, residual disability, and guarantee issue riders?

 

[MD Financial Services Scott]

Personally not a fan of the COLA, hard to make that work mathematically vs. just buying more coverage day 1. Residual I think is needed, CAT not a fan of, Future Purchase Options are good if future need is good but don't over buy....I see reps suggest dual contracts with $25-$30k of total coverage capacity to people who will never earn enough to justify being able to buy that much....it takes about $900k to qualify for $25k....it appeals to some egos I guess.

 

[PsyYaYaYaYai]

just heard back.

Was offered a plan but it has a 10-year exemption, meaning (I believe) that I can only get benefits for 10 years per disabling incident until age 65. I was quoted $40 a month for $2500 a month of disability pay. There was some hubbub about having to reapply if I want to rid myself of this 10 year exemption in the future.

Any thoughts in the SDN world about if this is good, bad, something I should take etc?

 

[PistolPete]

just heard back.

Was offered a plan but it has a 10-year exemption, meaning (I believe) that I can only get benefits for 10 years per disabling incident until age 65. I was quoted $40 a month for $2500 a month of disability pay. There was some hubbub about having to reapply if I want to rid myself of this 10 year exemption in the future.

Any thoughts in the SDN world about if this is good, bad, something I should take etc?

$2500 per month isn't that much coverage. Could you live on that if you were totally disabled for more than 3 months (after which point most disability plans kick in)?

 

[MD Financial Services Scott]

just heard back.

Was offered a plan but it has a 10-year exemption, meaning (I believe) that I can only get benefits for 10 years per disabling incident until age 65. I was quoted $40 a month for $2500 a month of disability pay. There was some hubbub about having to reapply if I want to rid myself of this 10 year exemption in the future.

Any thoughts in the SDN world about if this is good, bad, something I should take etc?

What that typically means is you had a health issue so there was a policy modification to the contract. With a 10 year benefit period (which is unusual since most are 2, 5, age 65, age 67, or age 70 Benefit periods) that is typically issued by Ameritas. Personally I would take the offer then shop the benefits across the other carriers to see if anyone else would make you yet a better offer.

As for the benefit amount, is the $2,500 what you wanted? Is what you can afford? Most people are not limited to $2,500 unless they are medical school, resident coverage limits are $5k-$6k typically and new doctor in practice limits (first 2 years without income documentation or employment contract) are about $6,500-$7,500 depending upon the specialty.

 

[666357]

1. Needs to be disability from your specific job- if you get another job or source of income, that amount would be deducted from the disability payment, so you'd still obtain the full payment amount. Working is good for you, so do something...
2. Prolong payout as long as possible (mine's a year) to keep premiums down. Even then, if it's a good policy it's still going to be costly. But it's peace of mind you're after. You won't have to change your standard of living, sell the house, downsize, etc.
3. Get a real disability policy- one that pays 75-80% of your base pay until the age of 65 (remember, disability payments aren't taxed, at least on the federal level, so this could actually be like a pay increase).

Interestingly, mine includes loss of license 2/2 ETOH or drug dependence. But I'm not a partier, so big whoop. Just an interesting tidbit.

 

[notdeadyet]

The trouble with the AMA plan is that is not an Own Occupation definition of disability (it is a own occupation and not working definition), it has a total and continuous clause in the waiting period, they increase your rate at 40, 45, 50, 55, and 60, finally they can change the wording, premiums (in addition to the normal age increase/price increase) and or cancel the policy anytime they want.....other than that it is a great plan.

I believe this is incorrect. If you visit:
https://www.amainsure.com/coverage-details/disabilitypro-insurance.html
... they specifically indicate that it IS Own Occupation.

 

[MD Financial Services Scott]

I believe this is incorrect. If you visit:
https://www.amainsure.com/coverage-details/disabilitypro-insurance.html
... they specifically indicate that it IS Own Occupation.

I know it is complicated but what you are showing is exactly what I am saying....their marketing material suggests one thing but the policy clearly states something else. This is a copy right out of their policy.

 

[notdeadyet]

Wow. Thank you! That's completely contrary to their fact sheet.

So it's Own Occupation insurance, you just can't WORK in another occupation. Dodgy...


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[MD Financial Services Scott]

Wow. Thank you! That's completely contrary to their fact sheet.

So it's Own Occupation insurance, you just can't WORK in another occupation. Dodgy...


Sent from my iPhone using Tapatalk

Correct, so if you can qualify for benefits, don't work, then you will receive full benefits. If you qualify for benefit and start to work in another occupation then partial benefits will be paid based on the following equation % of income lost is the % of your benefit that will be paid...it does not matter what you are working in for that reduction to happen.
I mentioned "if you can qualify for benefits" 2x and here is why....

If you have a waiting period of let's say 90 or 180 days then you become sick or hurt which either 'limit' your medical production capacity (billing) thus you are disabled but since you can do some things you not "totally" disabled, thus you will not ever become benefit eligible. In addition if you are out for say 75 days 'totally disabled' but then try to go back to work for a 1/2 day or light duty but after even a single day decide you are not ready, well to bad you broke your "consecutive" days rule and now you have to start the elimination period over. Some people will call that a loop hole but the reality it is right there in the language AND language matters....

This type of thing is repeated by ACS, AFP, AAOS, State Medical Associations and dozens of more associations. In addition we are seeing this in pretty much all of the hospital employer based plans (from the types like Hopkins, Cleveland Clinic down to small county hospitals) as well.

Finally here is also a link to some other information about association and employer plans, faqs, videos and the such http://mddisabilityquotes.com/resources/learn-more/.

 

[FlowRate]

Ended up being denied. Was expecting a rider.

I guess the move now is to keep paying for institutional insurance and consider jobs with group disability a little more highly. Granted, they're not perfect (as you outlined).

 

[666357]

I keep 6 mos emergency fund and have a long term disability insurance plans that kicks in after disabled 6 mos. It only pays 1/2 of what I currently make, so I hope I'll never need it. Our employer offers short term disability insurance at my expense that pays for 30 days to 6 months of disability (I declined).

yeah, yours may only be 1/2 of your current earnings, but disability payments aren't subject to federal income tax

i spend 350ish monthly
it's occupation specific
alcoholism and drug addiction are covered disabilities
it'll pay ~140K until 65- actually pays a little more currently since i accepted an increase in it
i also have the 6mo deferrment
if i took a job doing something else that paid less, they'd pay the difference up to my covered amount, but honestly, if i became disabled and was taking in 140K+ tax free annually then i'd probably just spend my days fishing, recouping, or doing whatever i was physically/mentally able to do to enjoy life- which in my case is working....

 

[deleted314290]

Starting to do some research on disability insurance. So far what I gather is to get own occupation, with a future purchase, COLA, catastrophic disability, residual disability, make sure there is no limit on M/N, and non cancel-able/guaranteed renewable?

 

[MD Financial Services Scott]

Starting to do some research on disability insurance. So far what I gather is to get own occupation, with a future purchase, COLA, catastrophic disability, residual disability, make sure there is no limit on M/N, and non cancel-able/guaranteed renewable?

Just keep your coverage simple, the reality is you probably won't use it so make sure it is an efficient policy.

 

[Psyxh1]

Just keep your coverage simple, the reality is you probably won't use it so make sure it is an efficient policy.

Apparently Metlife is no longer insuring residents. Is this true?

If you're rejected from an underwritten policy but then qualify for something like Guardian's Guaranteed Issue, is that a good option to go through with? It only covers M/N for 2 years though. What is the transitional own occupation policy vis a vis regular own occupation policy that Principal offers? What are the advantages/disadvantages of the transitional own occupation policy? Could someone still qualify for Principal's transitional own occupation policy after being rejected from an underwritten one from another company?

 

[MD Financial Services Scott]

Apparently Metlife is no longer insuring residents. Is this true?

If you're rejected from an underwritten policy but then qualify for something like Guardian's Guaranteed Issue, is that a good option to go through with? It only covers M/N for 2 years though. What is the transitional own occupation policy vis a vis regular own occupation policy that Principal offers? What are the advantages/disadvantages of the transitional own occupation policy? Could someone still qualify for Principal's transitional own occupation policy after being rejected from an underwritten one from another company?

To Answer your questions as you asked them:
That is correct, MetLife will no longer accept ANY disability applications for individual coverage as of September 1, 2016. In fact any applications that are in underwriting if they are not completed and put in force by 10-31-2016 then applications will be canceled.

Guardian is a fine company and perfectly fine contract to go with, you should have no reservations about that policy.

For some specialties that is correct, they only have M/N for 24 months. A number of people will tell you that is not good enough but my suggestion is to ask them to refer you to just 2 of their clients who are physicians and have had a M/N claim for greater than 24 months. I will tell you I have been in this business for 23 years and have not only not personally experienced it with any of my clients but I don't have any colleagues that have either.

The Transitional definition from Principal is pretty simple, they will pay 100% of the benefit until post disability income from your next occupation plus the benefit from the policy start to exceed your pre-disability income. The reality is if you make $100k then that is not a great policy definition in my opinion but if you make $600,000 then even if you have the $17k max (that Principal will issue at the moment) monthly benefit which turns int0 $204k then the post-disability income would need to be $396k before your benefits would be reduced....that is a pretty good second job. The reality is the more you make the better this definition is since it becomes harder to find that 2nd (post disability) job that is high paying.

Depends on why you were rejected as to whether another carrier would accept you. Make sure you tell your rep exactly what the rejection was if you are using a different rep. As an example, one could get rejected for being a diabetic by one carrier but accepted by another. However if you have had a valve replacement you probably would be rejected by all carriers.

Hope that helps.

 

[Psyxh1]

To Answer your questions as you asked them:
That is correct, MetLife will no longer accept ANY disability applications for individual coverage as of September 1, 2016. In fact any applications that are in underwriting if they are not completed and put in force by 10-31-2016 then applications will be canceled.

Guardian is a fine company and perfectly fine contract to go with, you should have no reservations about that policy.

For some specialties that is correct, they only have M/N for 24 months. A number of people will tell you that is not good enough but my suggestion is to ask them to refer you to just 2 of their clients who are physicians and have had a M/N claim for greater than 24 months. I will tell you I have been in this business for 23 years and have not only not personally experienced it with any of my clients but I don't have any colleagues that have either.

The Transitional definition from Principal is pretty simple, they will pay 100% of the benefit until post disability income from your next occupation plus the benefit from the policy start to exceed your pre-disability income. The reality is if you make $100k then that is not a great policy definition in my opinion but if you make $600,000 then even if you have the $17k max (that Principal will issue at the moment) monthly benefit which turns int0 $204k then the post-disability income would need to be $396k before your benefits would be reduced....that is a pretty good second job. The reality is the more you make the better this definition is since it becomes harder to find that 2nd (post disability) job that is high paying.

Depends on why you were rejected as to whether another carrier would accept you. Make sure you tell your rep exactly what the rejection was if you are using a different rep. As an example, one could get rejected for being a diabetic by one carrier but accepted by another. However if you have had a valve replacement you probably would be rejected by all carriers.

Hope that helps.

Thank you very much for your detailed response. I was rejected from an underwritten policy by Guardian but still qualify for Guardian's Guaranteed Issue policy. As per your advice, I will go ahead with the Guaranteed Issue contract from Guardian.

 

[deleted314290]

Can someone comment on how an own occupation plan would specifically benefit a psychiatrist? I understand the need for surgeons or ED docs, but for psychiatry what would prevent you from working as a psychiatrist outside of a completely disabling injury, for which a standard plan would cover? What types of injury or circumstance would the own occupation end up saving your ass?

 

[MD Financial Services Scott]

Can someone comment on how an own occupation plan would specifically benefit a psychiatrist? I understand the need for surgeons or ED docs, but for psychiatry what would prevent you from working as a psychiatrist outside of a completely disabling injury, for which a standard plan would cover? What types of injury or circumstance would the own occupation end up saving your ass?

ima4ltrwrd, I am with you on your question, why does a psychiatry physician need a true own occupation definition policy. When I look at these contracts I ask the question of "If this person can't do their job due to an injury or illness what other job could they go do and at what pay would they be doing that at"? Just be sure you end up with a contract that the carrier can't change the language AND you do not have a clause that states you have a time period before you then need to go do 'any other job based on education, training OR experience'. The word OR is very powerful since if you check the box on any one of those that might just be your next job because it says OR. In addition you don't want a contract that essentially removes the decision from your hands and places it the insurance companies hands.

Good luck and if I can help further just ask.

 

[666357]

Can someone comment on how an own occupation plan would specifically benefit a psychiatrist? I understand the need for surgeons or ED docs, but for psychiatry what would prevent you from working as a psychiatrist outside of a completely disabling injury, for which a standard plan would cover? What types of injury or circumstance would the own occupation end up saving your ass?

Addiction, alcoholism, brain injuries, cardiovascular and respiratory diseases, cancer...basically all those things you touch upon in the first 4 years of medical school.

If it causes you to lose your license or you're unable to use your body to get to and stay at work or use your brain to make medical decisions then it's disabling.

 

[TexasPhysician]

Can someone comment on how an own occupation plan would specifically benefit a psychiatrist? I understand the need for surgeons or ED docs, but for psychiatry what would prevent you from working as a psychiatrist outside of a completely disabling injury, for which a standard plan would cover? What types of injury or circumstance would the own occupation end up saving your ass?

Cognition related. While the labor industry is very valuable, I have little interest in physical labor because cognitive deficits impair my ability to work as a psychiatrist. Not to mention the salary reduction.

Many generic policies also limit mental conditions. As a psychiatrist, we should all appreciate how disabling some conditions are. 2 year limits is just insane.

 

[MD Financial Services Scott]

Addiction, alcoholism, brain injuries, cardiovascular and respiratory diseases, cancer...basically all those things you touch upon in the first 4 years of medical school.

If it causes you to lose your license or you're unable to use your body to get to and stay at work or use your brain to make medical decisions then it's disabling.

Just keep in mind that solely a loss of license is not a disability....

 

[MD Financial Services Scott]

Cognition related. While the labor industry is very valuable, I have little interest in physical labor because cognitive deficits impair my ability to work as a psychiatrist. Not to mention the salary reduction.

Many generic policies also limit mental conditions. As a psychiatrist, we should all appreciate how disabling some conditions are. 2 year limits is just insane.

If you have the correct contract language then you don't have to go do anything. If you have the best definition of disability then even if you go so something that income will not affect your benefit payout regardless of how much it is. As for the Mental limitation contracts, yes most have limits but there are some that don't just ask the rep and they should be able to direct you to those that have no limit. They are typically 20% +/- more in cost so everyone can decide what is important to them from a purchase standpoint.