Current disability insurance rates

[mega_colon]

So I'm in the process of purchasing own-occupation disability insurance as a PGY1 and the rates I'm being quoted seem quite high as compared to what I've seen on whitecoatinvestors website and other threads on here.

Right now, as a healthy 28yo male PGY1 I'm being quoted $187/mth for $5,000/mth in coverage from Guardian with a $12k FPO, 3% COLA, 15% residual benefit.

Ameritas, principal, massmutual, etc are quoting roughly the same +/- $20/mth. Ameritas I can get at $165/mth, but the COLA is indexed to the CPI.

This comes out to 3.7% premium to benefit ratio which seems quite high, is this the market norm these days?

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[MD Financial Services Scott]

So I'm in the process of purchasing own-occupation disability insurance as a PGY1 and the rates I'm being quoted seem quite high as compared to what I've seen on whitecoatinvestors website and other threads on here.

Right now, as a healthy 28yo male PGY1 I'm being quoted $187/mth for $5,000/mth in coverage from Guardian with a $12k FPO, 3% COLA, 15% residual benefit.

Ameritas, principal, massmutual, etc are quoting roughly the same +/- $20/mth. Ameritas I can get at $165/mth, but the COLA is indexed to the CPI.

This comes out to 3.7% premium to benefit ratio which seems quite high, is this the market norm these days?

For a level premium you should be around $80-$120 I would think and if you want graded (which you might until you get out of training) you should be around $60.

 

[Alvarez13]

I'm 32, healthy, got my PGY3 right before I started as attd. I'm at like $220 via principle. So far so good. It's specialty specific and I can add on coverage as needed.

 

[mega_colon]

For a level premium you should be around $80-$120 I would think and if you want graded (which you might until you get out of training) you should be around $60.

I just emailed you via your website.

 

[MD Financial Services Scott]

I'm 32, healthy, got my PGY3 right before I started as attd. I'm at like $220 via principle. So far so good. It's specialty specific and I can add on coverage as needed.

Depending on your specialty and state of residency, we just ran the quote design you describe and our rates for you came in at $127 for level and $71 for graded premium mode. You might double check what you have since it seems kind of high based on the info I have.

 

[anbuitachi]

So I'm in the process of purchasing own-occupation disability insurance as a PGY1 and the rates I'm being quoted seem quite high as compared to what I've seen on whitecoatinvestors website and other threads on here.

Right now, as a healthy 28yo male PGY1 I'm being quoted $187/mth for $5,000/mth in coverage from Guardian with a $12k FPO, 3% COLA, 15% residual benefit.

Ameritas, principal, massmutual, etc are quoting roughly the same +/- $20/mth. Ameritas I can get at $165/mth, but the COLA is indexed to the CPI.

This comes out to 3.7% premium to benefit ratio which seems quite high, is this the market norm these days?

I am as well. I am PGY3. Using a very popular guy. He does disability insurance for many people in our hospital. The rate i got was 186$/month also from Guardian. 5k base policy, true own occupation, 90 day elimination period, Future increase option 12k, enhanced partial disability benefit rider, COLA 4 yr delayed. No coverage for mental/substance abuse

Still didn't do health and prescriptiion review yet. I have a feeling my offer will be much higher seeing hte # of prescription meds i got lol

For a level premium you should be around $80-$120 I would think and if you want graded (which you might until you get out of training) you should be around $60.

How'd you get so low??

 

[anbuitachi]

I'm 32, healthy, got my PGY3 right before I started as attd. I'm at like $220 via principle. So far so good. It's specialty specific and I can add on coverage as needed.

220 after rider boosting to 17k payment a month?

 

[MD Financial Services Scott]

I am as well. I am PGY3. Using a very popular guy. He does disability insurance for many people in our hospital. The rate i got was 186$/month also from Guardian. 5k base policy, true own occupation, 90 day elimination period, Future increase option 12k, enhanced partial disability benefit rider, COLA 4 yr delayed. No coverage for mental/substance abuse

Still didn't do health and prescriptiion review yet. I have a feeling my offer will be much higher seeing hte # of prescription meds i got lol




How'd you get so low??

Just design features and resident discounts we have access to. Certainly I have made a few assumptions like male, surgeon, healthy, and the such, without full personal and exact personal details we can't hit the exact number in a forum like this.

 

[anbuitachi]

Just design features and resident discounts we have access to. Certainly I have made a few assumptions like male, surgeon, healthy, and the such, without full personal and exact personal details we can't hit the exact number in a forum like this.

my 186 was after a resident discount and the mental health discount

 

[mega_colon]

I am as well. I am PGY3. Using a very popular guy. He does disability insurance for many people in our hospital. The rate i got was 186$/month also from Guardian. 5k base policy, true own occupation, 90 day elimination period, Future increase option 12k, enhanced partial disability benefit rider, COLA 4 yr delayed. No coverage for mental/substance abuse

Still didn't do health and prescriptiion review yet. I have a feeling my offer will be much higher seeing hte # of prescription meds i got lol




How'd you get so low??

It sounds like we are getting the same quote. I'm fine paying this much, my budget can handle this, but I am having trouble understanding what the FIO of $12k/mth gets me that I don't get with the free benefit update rider.

The FIO adds $40/mth to the policy and realistically I'm going to bump my coverage my 1st year as an attending and then I'm unlikely to ever increase again. So why not opt for the benefit update rider which allows me to bump my coverage once my income increases by 50%.

 

[anbuitachi]

It sounds like we are getting the same quote. I'm fine paying this much, my budget can handle this, but I am having trouble understanding what the FIO of $12k/mth gets me that I don't get with the free benefit update rider.

The FIO adds $40/mth to the policy and realistically I'm going to bump my coverage my 1st year as an attending and then I'm unlikely to ever increase again. So why not opt for the benefit update rider which allows me to bump my coverage once my income increases by 50%.

never heard of a free benefit update rider. what is that?

 

[mega_colon]

never heard of a free benefit update rider. what is that?

Someone more knowledgeable than me is bound to come along, but the way I understand it is that this is a free rider Guardian offers where every 3 years or if you have a 50% increase in income you can apply for a benefit increase without going through medical underwriting again. Catch being that you have to take at least 50% of what they offer.

 

[MD Financial Services Scott]

Someone more knowledgeable than me is bound to come along, but the way I understand it is that this is a free rider Guardian offers where every 3 years or if you have a 50% increase in income you can apply for a benefit increase without going through medical underwriting again. Catch being that you have to take at least 50% of what they offer.

Benefit Update is--- a free rider for a policy that allows you to typically increase the benefit payout every 3 years, when you have a 50% income increase, or you lose a group benefit plan.
Future Purchase Options are --- a rider you pay for that allows you to increase your policy each year, typically with a window of 30 days pre and 30 days post your policy anniversary. There are no triggers for 'allowing' you to increase your policy thus when you control it then you pay for it.
There are situations where one should buy one or the other so it is not a definitive answer for which one is the right one at all times.

 

[anbuitachi]

Benefit Update is--- a free rider for a policy that allows you to typically increase the benefit payout every 3 years, when you have a 50% income increase, or you lose a group benefit plan.
Future Purchase Options are --- a rider you pay for that allows you to increase your policy each year, typically with a window of 30 days pre and 30 days post your policy anniversary. There are no triggers for 'allowing' you to increase your policy thus when you control it then you pay for it.
There are situations where one should buy one or the other so it is not a definitive answer for which one is the right one at all times.

But for residents becoming attendings what's the point of future purchase. Income will go up by 50 when attending so can use free benefit. Most increase immediately after attending anyway?

 

[MD Financial Services Scott]

People move around, that causes a trigger on Benefit Updates, group benefits come and go at employers and that causes a trigger, there are just a lot of reasons that trigger benefit options. Personally I think both are fine MOST of the time. It really does come down to an individual situations and how long you might keep options before exercising them.

 

[dku_di4mds]

It sounds like we are getting the same quote. I'm fine paying this much, my budget can handle this, but I am having trouble understanding what the FIO of $12k/mth gets me that I don't get with the free benefit update rider.

The FIO adds $40/mth to the policy and realistically I'm going to bump my coverage my 1st year as an attending and then I'm unlikely to ever increase again. So why not opt for the benefit update rider which allows me to bump my coverage once my income increases by 50%.

Please be advised that the cost for the FIO rider will eventually drop off the policy (either when you use all of it, when you turn 56, or when you take it off the policy). Subtract the cost for the rider and compare that premium to a policy with a built-in increase rider. The main advantage with the FIO rider versus the "free" ones like Principal's "Benefit Update" is that you are not forced to apply for the increase and accept a minimum amount in order to keep the option on your policy.

 

[Groove]

Do you guys think own occ is worth it? I have a Mass Mutual policy at the moment that I've had since getting out of residency. I was a bit older at the time since medicine was a 2nd career for me but locked things in at what I thought was a somewhat decent rate. I've since upped my coverage to 15K. The occupation specific language is good (so I'm told) and if I were to no longer able to work as an EM doc, I could earn 25% of my original salary while still receiving full benefits (15K/mo). I'm currently paying $660/mo.

Own occ would increase that $155.31/mo. My insurance guy says he'd love to sell it to me but just doesn't think I need it unless I plan on going back to residency or have some large earning side business. I hear everyone discussing the merits of own occupation but the way I understand it is that I'm really not benefiting unless I'm earning > 125K/yr. 15K/mo would already give me 180K/yr tax free. For someone like me, that's honestly plenty to live a very comfortable lifestyle. I just can't think of why I'd need to earn >305k/yr to warrant the own occupation policy unless I'm missing something. If I became disabled enough to not be able to work in medicine, I'd prob teach med students part time or something minor. I don't see myself taking my prosthetic leg and trying to go run a fortune 500 company.

Am I missing something? Do you guys think I should take out the own occ just to be on the safe side and pay the extra $155/mo? I already thought I was paying a lot but I talked to a trauma surgeon buddy of mine who has disability/life and he's paying almost 2K a month!

 

[fahimaz7]

I was 33 when I purchased mine through Ameritas. No medical problems. I did it as a resident and increased it as an attending. Currently paying $12,000 with a monthly premium of $474.25. Multiple riders including COL, same occupation, able to increase to 16k/mo, etc. Ameritas was quite a bit cheaper than the other top 6 companies.

 

[MD Financial Services Scott]

Do you guys think own occ is worth it? I have a Mass Mutual policy at the moment that I've had since getting out of residency. I was a bit older at the time since medicine was a 2nd career for me but locked things in at what I thought was a somewhat decent rate. I've since upped my coverage to 15K. The occupation specific language is good (so I'm told) and if I were to no longer able to work as an EM doc, I could earn 25% of my original salary while still receiving full benefits (15K/mo). I'm currently paying $660/mo.

Own occ would increase that $155.31/mo. My insurance guy says he'd love to sell it to me but just doesn't think I need it unless I plan on going back to residency or have some large earning side business. I hear everyone discussing the merits of own occupation but the way I understand it is that I'm really not benefiting unless I'm earning > 125K/yr. 15K/mo would already give me 180K/yr tax free. For someone like me, that's honestly plenty to live a very comfortable lifestyle. I just can't think of why I'd need to earn >305k/yr to warrant the own occupation policy unless I'm missing something. If I became disabled enough to not be able to work in medicine, I'd prob teach med students part time or something minor. I don't see myself taking my prosthetic leg and trying to go run a fortune 500 company.

Am I missing something? Do you guys think I should take out the own occ just to be on the safe side and pay the extra $155/mo? I already thought I was paying a lot but I talked to a trauma surgeon buddy of mine who has disability/life and he's paying almost 2K a month!

You are thinking about this correct in my opinion. The more money one makes the better that Own Occ Not Engaged definition is since the threshold for having future income impact starts becoming a big number when you think about it as a 'second' career.

You might check around on your current policy since $660 is a pretty high premium for $15k without an own occ definition, there is a good chance you can lower your rate. Just last week we did a $15k contract for a client and it was only $410 per month. Certainly age, gender, specialty and state of residency matter but take a look around since right now Mass is typically the most expensive unless you have a group discount being applied.

 

[Brigade4Radiant]

• Northwestern insurance agent from the bank is trying to get me to sign an in-force ledger for my Guardian disability insurance. He states he can get me a lower rate but he wont tell me the rates until he sees what I got. I already got my plan in residency and I'm pretty skeptical of this.

 

[MD Financial Services Scott]

• Northwestern insurance agent from the bank is trying to get me to sign an in-force ledger for my Guardian disability insurance. He states he can get me a lower rate but he wont tell me the rates until he sees what I got. I already got my plan in residency and I'm pretty skeptical of this.

I would not worry about it and certainly not do it, Northwestern can't even match the definition of disability you have from Guardian.

 

[Groove]

You are thinking about this correct in my opinion. The more money one makes the better that Own Occ Not Engaged definition is since the threshold for having future income impact starts becoming a big number when you think about it as a 'second' career.

You might check around on your current policy since $660 is a pretty high premium for $15k without an own occ definition, there is a good chance you can lower your rate. Just last week we did a $15k contract for a client and it was only $410 per month. Certainly age, gender, specialty and state of residency matter but take a look around since right now Mass is typically the most expensive unless you have a group discount being applied.

Hmm, thanks. I was a bit older when I went back to med school and have an artificial disc in my neck which Mass Mutual included a rider for... I'm in good health otherwise but I think the combination in age and surgical history must have made me higher risk. I'm not sure going through all the medical eval again at my current age 42 would put me at a lower rate. Maybe I'm getting ripped off though. Either way, I'm starting to think I should add own occ.

 

[MD Financial Services Scott]

Hmm, thanks. I was a bit older when I went back to med school and have an artificial disc in my neck which Mass Mutual included a rider for... I'm in good health otherwise but I think the combination in age and surgical history must have made me higher risk. I'm not sure going through all the medical eval again at my current age 42 would put me at a lower rate. Maybe I'm getting ripped off though. Either way, I'm starting to think I should add own occ.

Without knowing more specifics but using a male, age 42, $15k of monthly benefit coverage, not living in CA, residual, 90 day waiting period would be $593 per month or 180 day waiting period would be $498 per month for most efficient contract with a fixed premium never to go up.