Disability Insurance Coverage Residency Conversion

[Emergency107]

Hi everyone,

I just wanted to make everyone aware that a lot of hospital residencies are offering group disability insurance to residents that can be converted to your own individual policy with no medical underwriting, own-occupation, non-cancelable, guaranteed renewable and portable upon graduation from residency.

If you get disabled DURING residency, then it's unfortunately only own occupation for 2 years and then converts to any duties of a physician. However, you'd probably want to change course and do something you could actually DO that early in your career. But, once you graduate it becomes an individual policy that you pay premiums on, and it is own-occupation, non-cancelable, guaranteed renewable and portable and not taxable.

Check to see if your hospital offers this. Do yourself a favor and SAVE money on premiums during residency and then convert the plan to individual when you graduate.

Disability Insurance agents out there are making TONS of money off of selling you individual policies (many get 100% of your first year's premiums as commission), so they have a vested interest in trying to sell you something you don't need. They don't want people to know about this plan that hospital systems offer, and the agent I was working with was adamant that his policy was the only way to go. Luckily I got in touch with my program's benefit office and figured this out. So glad I figured this out before forking over ~$130 a month to (name of insurance company omitted).

Cheers!

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[MilkIsGood]

im still wondering if i should continue my disability insurance from med school

 

[MD Financial Services Scott]

Hi everyone,

I just wanted to make everyone aware that a lot of hospital residencies are offering group disability insurance to residents that can be converted to your own individual policy with no medical underwriting, own-occupation, non-cancelable, guaranteed renewable and portable upon graduation from residency.

If you get disabled DURING residency, then it's unfortunately only own occupation for 2 years and then converts to any duties of a physician. However, you'd probably want to change course and do something you could actually DO that early in your career. But, once you graduate it becomes an individual policy that you pay premiums on, and it is own-occupation, non-cancelable, guaranteed renewable and portable and not taxable.

Check to see if your hospital offers this. Do yourself a favor and SAVE money on premiums during residency and then convert the plan to individual when you graduate.

Disability Insurance agents out there are making TONS of money off of selling you individual policies (many get 100% of your first year's premiums as commission), so they have a vested interest in trying to sell you something you don't need. They don't want people to know about this plan that hospital systems offer, and the agent I was working with was adamant that his policy was the only way to go. Luckily I got in touch with my program's benefit office and figured this out. So glad I figured this out before forking over ~$130 a month to (name of insurance company omitted).

Cheers!

This is no secret but it has major limitations so just beware. Take time, read the definition of disability on the conversion contract and you will see the Not Engaged definition and in addition under the residual/partial portion of the policy it will offset for future income (the math equation is % of income lost is the % of the benefit to paid under those type of contracts). The biggest issue is that that type of policy which has a $2k to $2.5k benefit and benefit reductions for other income becomes a real problem for residents, here is why. As a resident (for round numbers) you make $50k, get a $2,500 per month disability (60% of pay) and become disabled. Full benefits are paid while totally disabled and own occupation but later in life you get tired of living on $2,500 of benefit and go find a job making $50k per year....you have no loss of income so there is no benefit. When one reads a disability policy the language that is there is equally important to the language that is not there. If you want, PM me and send me your policy from the residency and I will show you what I mean. Remember, words matter! By the way most residency premiums should around $75, at $130 something is out of line.

 

[Slink1688]

Actually - many residencies are offering individual plans that have already been negotiated with group discounts. At my residency, they offer top of the line private disability but with a discount for being part of our residency. It's pretty much the best policy I've been able to find. And no lengthy application with medical underwriting either.

Med students/Residents - check with your residency to see if they offer something like this before going out onto the private market by yourself. This is just like health insurance! If you try to buy a private policy, it will be more costly and will have pre-existing conditions (before the ACA I mean), but if you buy an INDIVIDUAL policy through your residency, you have the benefit of group negotiating power without pre-existing conditions. Many residencies are setting this up, and it is becoming a much more economical and secure way to buy disability insurance.

I hand an unfortunate hand injury from a biking accident with some temporary nerve injury a few years ago that ultimately resolved, and my private policies were saying that my radial nerve in my right hand could never be covered. Considering it has entirely healed, this is ridiculous! I got a group plan and my ENTIRE right hand is covered (including everything else) because there is no medical underwriting involved.

 

[fahimaz7]

Buy own occupation disability. Most group policies are not like this.

 

[IlDestriero]

Good own occupation disability is expensive, but worth the investment in my opinion. Especially for someone who needs to be essentially fully functional to practice. Anesthesia and surgery vs pm&r and radiology for example. Read the fine print and be aware that your group plan may not be good enough for your needs.


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Il Destriero