attending disability

[Jeff05]

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question for the attendings (pretty basic):
i have an own occ policy from metlife that started in residency. in my new attending job (academic) i have included disability (long and short term) for 60% or 15k/month max of my salary.

is it worth - to have these 2 policies? any other comments?

can anyone recommend a company umbrella coverage.

 

[IN2B8R]

very quick question for the attendings (pretty basic):
i have an own occ policy from metlife that started in residency.

in my new attending job (academic) i have included disability (long and short term) for 60% or 15k/month max of my salary.

so if i go on disability, will i now have 2 disability incomes - one from the hospital and the other from the policy that i purchased?

is it worth - to have these 2 policies? any other comments?

also, can anyone recommend a good company for umbrella coverage.

I am not 100 percent certain that this will apply to all disability insurance companies, but be sure that any payout made is NOT gonna get affected if you have a separate policy... Call your insurance company, as well as your carrier from work and verify that you are contractually safe to get money from BOTH entities if, God forbid, you get a long term disability....

 

[jwk]

I don't ever think it hurts to have two policies. Remember that the income from the policy that you pay for comes to you tax free. Income from a policy that your employer pays for is taxable income. There is usually a maximum amount you can get if you have more than one policy, but there are a lot of things that go into that. My company policy gives 60% of average W-2 for the last two years (used to be 60% of base) up to a maximum of $x per month. My own policy covers everything above that - the other 40% of income, 25% for tax liability, and 15% to cover lost pension contributions. It also has a maximum per month, but the end result is that I am "made whole" by combining disability policies.

 

[aneftp]

I don't ever think it hurts to have two policies. Remember that the income from the policy that you pay for comes to you tax free. Income from a policy that your employer pays for is taxable income. There is usually a maximum amount you can get if you have more than one policy, but there are a lot of things that go into that. My company policy gives 60% of average W-2 for the last two years (used to be 60% of base) up to a maximum of $x per month. My own policy covers everything above that - the other 40% of income, 25% for tax liability, and 15% to cover lost pension contributions. It also has a maximum per month, but the end result is that I am "made whole" by combining disability policies.

You need to be careful with disability policies.

1. If your employer pays the disability premiums and takes a tax deduction which they probably do (ask them), they must re-add the "benefits aka the premiums as salary to your W-2" so that it becomes taxable to you.

Reason is simple. If you take a tax deduction on the premiums, when it's time to collect, you will get taxed on regular income on all disability income collected.

If you don't tax a tax deduction, than all the disability income is "tax free" since it's post-tax money you are paying your premiums. But having your employer claim the tax deduction and than re-adding the benefits to your w-2 is the cleaning way to save some money and still save the tax free benefits.

Usually the max benefit is around $10K. But it's usually good to keep your individual policy in addition to your employer's policy. It costs me around $800 a month for my $8K a month benefit long term disability (and it's my specialty specific so I can't be made to go back to train as another professional).

 

[cchoukal]

Others have alluded to this, but I'll add that I'm quite certain that my agents told me that my payout WOULD be affected by what any other policies paid, and that my own policy would pay last. I would add, though, that I would probably keep my private policy no matter what my employers/group's policy paid because if I ever left the group or changed jobs, I'd be too old and sick to afford/qualify for my own policy ever again.

 

[August_Bier]

Keep your own policy for the above reasons. Your company's disability policy as mentioned is probably not portable and if so only with higher premiums if you change jobs. Also it will likely not have an "own-occupation" rider and possibly have other limitations.

That being said, once you have saved enough to be able to pay your own salary for the rest of your life, but only then, I would consider getting rid of it and "self-insuring".

 

[MR Insurance]

Not certain of what group contract you have available to you. Traditionally however, your group Disability insurance will NOT offset with individual Disability insurance.

Additionally, your personal Disability insurance will also not offset with the group coverage. Therefore you should be eligible to receive both benefits.

This is one of the benefits in purchasing private Disability insurance during residency. If you were to apply for individual coverage today, after having group insurance available to you, you would only qualify for a very limited amount.

Prior advice has been great! Keep it.

 

[udontknowmyname]

Mr Insurance has some good advice and it seems like he has some (or maybe a lot of) experience in the field.
One thing I would add (with regards to LTD) is pretty general and is appropriate for anyone reading this. Depending on your insurer, many of the companies write enhanced contracts for physicians, lawyers, and other professionals. I can't remember if Met does.
These contracts can be very lenient in favor of the insured (loose definitions of disability, larger remuneration limits, etc) and so tend to be quite different from run of the mill disability policies.
All that is to say that you should carefully read your contract as it's probably unique. Your policy might offset, might not. It might only offset to a certain percentage of income. Just read it carefully.

 

[jwk]

Mr Insurance has some good advice and it seems like he has some (or maybe a lot of) experience in the field.
One thing I would add (with regards to LTD) is pretty general and is appropriate for anyone reading this. Depending on your insurer, many of the companies write enhanced contracts for physicians, lawyers, and other professionals. I can't remember if Met does.
These contracts can be very lenient in favor of the insured (loose definitions of disability, larger remuneration limits, etc) and so tend to be quite different from run of the mill disability policies.
All that is to say that you should carefully read your contract as it's probably unique. Your policy might offset, might not. It might only offset to a certain percentage of income. Just read it carefully.

I'll bet they're not near as lenient as they used to be, as evidenced by fewer and fewer carriers with occupation-specific coverage. Fraudulent disability claims involving physicians has been a HUGE issue.

 

[udontknowmyname]

I'll bet they're not near as lenient as they used to be, as evidenced by fewer and fewer carriers with occupation-specific coverage. Fraudulent disability claims involving physicians has been a HUGE issue.

Not sure how far back "used to be" refers but when I was selling LTD for physician groups a year or so ago, it was the norm to quote the enhanced contracts for physician groups. Not doing it was pretty much asking to fail as a 60% to 5k insurance policy is pointless for a physician since the reimbursement will top out at about $60k/year. Which is obviously less than 60% for a physician.
But more to the point of leniency: Leniency is a poor word choice as no carrier just throws money at someone because they say they're hurt. However, there are certain things like removing the "any occ" verbage, considering a loss of 20% of your income as disabled (as opposed to the normal 40%) etc etc.
The risk of fraud is just offset by premiums. Certain carriers having super high premiums for these enhancements or not having these options at all is simply their way of telling their sales reps to stay away from those groups and target others. They all pick their targets according to some mathematical genius in some office!
My point was that it's always a good idea to look for those types of enhancements. While they'll cost some premium, if you plan on getting hurt 😕 they'll more than pay for themselves!
BTW, first sentence wasn't meant to sound arrogant. If you're referring farther back than the last few years then I'm sure they've tightened up since then. 😀

 

[Gaseous Clay]

The group I am joining this summer offers short term disability. They also provide me with $2500/year to purchase my own LTD. From reading some posts, especially Mr. Insurance, should I try to purchase LTD while I am still a Resident? Someone else told me to go for an own occ policy.

 

[udontknowmyname]

The group I am joining this summer offers short term disability. They also provide me with $2500/year to purchase my own LTD. From reading some posts, especially Mr. Insurance, should I try to purchase LTD while I am still a Resident? Someone else told me to go for an own occ policy.

Every policy is going to have own occ, it's a matter of how long the own occ period is before it switches to any occ (90, 180 days, etc). They (the carrier) might be able to remove any occ (maybe that's what they mean, thus leaving only the own occ verbage) or they can, rarely, offer own specialty (break a finger and a surgeon is disabled, for example).

Good luck with everything and congrats on the new job.

 

[cchoukal]

or they can, rarely, offer own specialty (break a finger and a surgeon is disabled, for example).

Good luck with everything and congrats on the new job.

Yes, that's exactly the type of policy you need to insist on. A handful of companies offer it, and that may vary from state to state. The language us very specific. You need an independent agent (i.e., one that doesn't work for the insurer) to sell you the policy anyway, and so an agent will verify exactly what the policy includes. I would look for an agent that can sell from multiple insurers so you can compare and contrast the various companies.

 

[MR Insurance]

Every policy is going to have own occ, it's a matter of how long the own occ period is before it switches to any occ (90, 180 days, etc). They (the carrier) might be able to remove any occ (maybe that's what they mean, thus leaving only the own occ verbage) or they can, rarely, offer own specialty (break a finger and a surgeon is disabled, for example).
QUOTE]

udontknowmyname makes a good point, although just a slight bit off. There are some insurance carriers out there that offer the Own Occupation definition of disability for a specified time frame, 2-year or 5-year (not 90 or 180 days). However, these are NOT the contracts you want to be purchasing (unless you are not healthy enough to qualify for standard coverage). You should be looking for Own-Occupation coverage for the entire benefit period (To age 65, or longer). To help you further understand the definition of total disability, here are the two versions you will likely see as you begin "shopping".
-"Totally disabled means that due to illness or injury you are unable to perform the material and substantial duties of your occupation, and are not gainfully employed elsewhere."
-"Totally disabled means that due to illness or injury you are unable to perform the material and substantial duties of your occupation."

If you notice, the first definition includes "and are not gainfully employed elsewhere". This is the most common definition available today, and as a Dr looking to protect his specialty, this is NOT what you want. The first version is known in the industry as "Modified Own Occ" where as the second definition is the "True Own Occ" (best option). The True Own Occ allows you to receive benefits when you satisfy the definitin and requirements, even if you are working in some other capacity (or medical specialty in your case).

cchoukal also makes a good point in stating that you should compare options. However, be sure that if the person you work with does not show you the "True Own Occupation", you find a new agent to work with. Chances are, that agent is either inexperienced or motivated to sell you his company's product rather than the best option for you.

Lastly, if you can afford it, purchasing coverage during residency is better. If you are going to buy coverage in a couple of months anyway, why bother waiting. The only downside is being subject to the limitations for residents. However if you work with the right agent, you may even be able to insure the full income you will be earning this summer.

 

[udontknowmyname]

udontknowmyname makes a good point, although just a slight bit off. There are some insurance carriers out there that offer the Own Occupation definition of disability for a specified time frame, 2-year or 5-year (not 90 or 180 days).

Well I know 90 and 180 day policies are the norm (norm = run of the mill employee benefits for non physician groups) out here in NJ/NY/PA area. Are you in a different state that the own-occ language is so generous (2-5 years) or are you referring mostly to the physician market? I'm just curious because it seems like that's the norm for you (?) and I haven't seen that type of language outside of physician contracts. The own occ to 65/full benefit period I'm familiar with, accidentally omitted it.

 

[Anes2010]

Well I know 90 and 180 day policies are the norm (norm = run of the mill employee benefits for non physician groups) out here in NJ/NY/PA area. Are you in a different state that the own-occ language is so generous (2-5 years) or are you referring mostly to the physician market? I'm just curious because it seems like that's the norm for you (?) and I haven't seen that type of language outside of physician contracts. The own occ to 65/full benefit period I'm familiar with, accidentally omitted it.

udontknowmyname = youdontknowwhatyouretalking about

90 vs 180 days is the waiting period before the policy kicks in. This is LONG TERM disability. The idea is that a short term disability policy covers you for the first few months. If you are disabled beyond that, the long term policy kicks in. 90/180 days is simply the amount of time you must be disabled before your long-term policy starts to pay.

This is entirely separate from the idea of "occupation specific" which can be a fixed period of time (2/5 years) or indefinite. In the former, if you are unable to do anesthesia, but able to work a different job (like radiology - i.e. not totally disabled) you will lose benefits, or a portion there-of, after the specified time. The better policies are "lifetime" occupation specific, so if your hand is cut off, and you go back and do a radiology residency and make $400k, you will still get your anesthesiology disability check for life, regardless.

Our group gives us a individual policy (using pretax dollars so any benefit is taxed) and I have my own post-tax policy. Both are 90 day waiting periods, occupation specific until age 65. If my hand gets cut off tomorrow, you'll find me in the bahamas in 6 months banking about $18k post-tax each month with a beer in my hand and a cute girl by my side.

 

[MR Insurance]

Agreed, I think there may be some confusion on elimination period Vs. Own Occupation period. As Anes2010 mentioned, 90-day and 180-day is usually referencing the Elimination period, a period of time which much be satisfied prior to benefits being payable.

Speaking of group benefits and Disability insurance the fits the "Norm", I would still say that 24-month to 36-month Own Occupation periods would be accurate. This is in reference to medical groups as well as any white-collar business. Clearly blue-collar benefits are not likely to be so generous.

I am in a different state (although not too far), but that will not actually affect what is offered in most cases. Applicants in Florida and California (perhaps a few other states) will encounter some benefit limitation but likely not to do with the Own Occ provision.

Anes2010 made another good point which is referring to Lifetime benefits. Great option, but depends on age. There is a specific structure to these benefits and the benefit period will actually be reduced as a person gets older. Still a good idea to have though when you're a 30-year old resident or 25-year old Professional of sorts.

 

[Gaseous Clay]

What do the insurance experts feel about combining 2 policies together? I was just quoted for DI. For example, combining Berkshire/Guardian with Principal could lead to a significantly higher monthly benefit with only slightly higher costs. Or, to aim for, let's say, 10k/month benefits, I could definitely save by getting 7k/month Berkshire + 3k/month with Principal. Does this make sense? Thoughts?

Thanks in advance.

 

[MR Insurance]

What do the insurance experts feel about combining 2 policies together? I was just quoted for DI. For example, combining Berkshire/Guardian with Principal could lead to a significantly higher monthly benefit with only slightly higher costs. Or, to aim for, let's say, 10k/month benefits, I could definitely save by getting 7k/month Berkshire + 3k/month with Principal. Does this make sense? Thoughts?

Thanks in advance.

That's a tough question to answer without knowing more about your situation. In general, I would say No. Depending on your income you should have no problem qualifying for $10K with one, single company. That being said, if you realize one contract is better than the rest than you should buy that contract, for the full benefit amount.

However, if your income is such that you are being capped out - for example, a $450K income warrants a greater than $15K-$16K monthly benefit, however most companies will not provide more than this amount for a single person. In this case, you should apply with a second company because it will allow you to obtain a higher total benefit amount. For example - you can buy $15K for Guardian/Berkshire and then apply with Principal and obtain an extra $5K.

Hope this helps.

 

[udontknowmyname]

[QUOTE/]udontknowmyname = youdontknowwhatyouretalking about[/QUOTE]

Once again studentdoctor members uphold their reputations for being a**holes. Come on man, if I'm wrong I'm wrong (which I am and I have to say quite embarrassed about it!) but don't be so lame and immature as to do something like that. No one respects online tough guys. I can see you're going to be a big help to your patients with that attitude.