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Disability Insuarnce

Discussion in 'Finance and Investment' started by mikeshana, Jun 14, 2008.

  1. mikeshana

    mikeshana Member
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    Hi im a healthy, non smoking guy and have been offered residents disability through guardian for $215 a month (about 2500 a year) with a cost of living adjustment rider of 6% and residual disability rider. It is occupation specific but was wondering if 215 a month is kind of expensive for this.

    thanks
     
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  3. southerndoc

    southerndoc life is good
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    I'm paying a little more than that for 10k/month benefits, also with Guardian/Berkshire Life.

    Own occs and residual disability riders are expensive.
     
  4. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
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    How much income are you insuring? I pay around 3.2% of the amount I insure for an own-occ, specialty specific policy with residual disability rider, additional purchase option rider, and a COLA. If you're insuring $4K/month benefit, you are paying $215/$4000= 5.4%.
     
  5. mikeshana

    mikeshana Member
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    im actually paying 215 for 4000 a month. what company are you guys using. Dont know if i am getting kind of screwed. Im with guardian, but want to shop around. what other companies do you guys recomend

    thanks
     
  6. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
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    I use Standard. Also check with your specialty organization for any special deals. Bear in mind that in disability insurance, much more so than life insurance, you tend to get what you pay for. There is a lot of gray in disability. It isn't black and white like death tends to be. Your policies definition of disability, how much it pays, when and how long (especially if you're doing something else) it pays all vary greatly.
     
  7. tenacious11

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    If i take a year break after residency and join fellowship after one year,would you recommend disability insurance for the one year.Thanks in advance.
     
  8. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
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    Will you be practicing as an attending for that year? If so, i'd definitely get it. Make sure you don't buy so much that you can't afford it as a fellow though. I'd certainly buy enough to insure 100% of your fellow's salary. If you mean spending 12 months in Patagonia as a break, then you may not want the additional, considerable expense of disability insurance.
     
  9. tenacious11

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    Thanks for the prompt reply.I am planning research for now,but may do part-time job[not ruled out entirely].
    My residency pgm is offering Unum LTD plan:
    Monthly Benefit $4000
    COLA
    FIO[​IMG]ptions:2,Monthly amount:1000:What does this option mean?does it mean that that my future increase option is only $1000,does this mean that my income would be locked at $5000/month.
    Exp Cat:8000
    Monthly premium:$200
    Lifetime continuation/Non Can
    2,Or should i opt for a lower monthly benefit for now
    [$1500/month with premium $100/month] as my income is limited now and upgrade later when i start working.
    3,Is this a good option or should i shop around for other insurance companies.Since i am time limited,should i take this option for now and reconsider after i join my fellowship.
    4,On graduating from fellowship,do i have the option of continuing this individual DI plus adding additional DI with fellowship or is it that you can have only one Individual DI plan at a time.
    Thanks in advance.
     
  10. spaz

    spaz Senior Member
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    as a new intern with no medical problems, no spouse/kids to worry about, and no bills except future loan payments, is it worth it to get the supplemental disability insurance offered by my residency?

    i know i should eventually get an individual policy before the end of residency, but i'm not sure if the residency program's policy is worth it. i know there's the advantage of not having to do a medical screening, but how does this help me if i'm going to get an individual policy later?

    i guess my question is, in terms of my plans to get disability insurance in the future, is there any benefit to buying the policy offered by the residency program now?



    thanks

    ps similar question - is it worth it to get supplemental life insurance now? (the residency already pays for life insurance worth our salary ~44k)
     
  11. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
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    #1) You don't need more life insurance. You don't even need what you have unless you feel bad that your parents have to pony up for your coffin.

    #2) What's your plan if you are in a car wreck tomorrow and lose your left hand? What if you lose your left and your right? You sure you don't want to take all the disability insurance they'll sell you? I would. When I was a resident I knew I didn't want to live the rest of my life on that kind of an income. If you get disabled while in residency without disability insurance, you'll be getting by on even less than that. Take what your program offers and take as much individual coverage as they'll sell you. When I was a resident I had a very weak policy given as one of my benefits. I bought an additional disability policy that is very good, a little expensive for the amount of coverage, but at least it'll pay. I don't regret not needing the coverage. If you need to save money, buy a policy that doesn't pay for the first year you're disabled. The financial catastrophe isn't being out of work for a few months, it is never being able to work again, or never being able to work as a physician again. That's what you're insuring against.
     
  12. Hadyjabl

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    I would suggest obtaining a disability policy outside of your residency. Usually it will have better contractual/own occupation language, better pricing and better options for expanding upon it when you have finished.

    Assuming you are healthy, I would recommend buying the policy now. Disability insurance is medically underwritten and something as simple as a contaminated needle stick could preclude you from ever buying a policy. Some companies have whats called a graded premium structure which makes the cost very affordable as a resident.
     
  13. Hadyjabl

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    The major disability insurance players are Guardian/Berkshire, Met Life, Principal and Standard. All of these carriers have very good contracts and are well suited for a physician. The cost will vary slightly based on the state you live in, your health, specialty and optional benefits. Individual agents don't have special deals (one Guardian quote will be the same as another).

    I'd advise against an association plan as they don't provide the same level of coverage as a good individual plan and can get very expensive as you get older.
     
  14. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD
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    I'm having trouble understanding your shorthand. $100/month for a $1500/month benefit seems awfully expensive, especially for a group policy which usually has an inferior disability definition to a good individual policy. Even $200 for a $4K/month benefit seems expensive to me. Remember that employer/group policies are usually pre-tax, meaning you pay premiums pre-tax but also that the benefit will be taxed. Individual policies are the opposite, you pay with after-tax dollars but get tax-free benefit. I'd say shop around rather than take what is offered.

    AFAIK no one limits you to just one individual policy, and most policies come with an inexpensive/free rider that allows you to buy more as your income goes up..
     

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