Disability insurance

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Does anyone have a disability insurance plan they recommend? Things to look for in a plan? I'm an intern, but figure I should probably get something started...

 

[dpmd]

Does anyone have a disability insurance plan they recommend? Things to look for in a plan? I'm an intern, but figure I should probably get something started...

I have mine plus my life insurance bundled with accidental death and dismemberment (which somehow saves me more than the cost of the ADD plan) through ACS for pretty damn cheap. You want to make sure you have own specialty coverage.

 

[dku_di4mds]

Does anyone have a disability insurance plan they recommend? Things to look for in a plan? I'm an intern, but figure I should probably get something started...

As an intern, some would say it is too early to purchase an individual disability insurance policy. However, you can certainly explore your options. What monthly dollar amount would you be able to comfortably allocate to a disability insurance premium?

I have mine plus my life insurance bundled with accidental death and dismemberment (which somehow saves me more than the cost of the ADD plan) through ACS for pretty damn cheap. You want to make sure you have own specialty coverage.

Did you look into individual plans from top companies like Guardian, Standard, Principal, Ameritas, MassMutual? I have helped several surgeons who switched from the ACS plan after sitting down with me to review the contractual provisions.

A few key limitations with the ACS plan:

• The premium and benefits are not guaranteed. Benefits can be modified and the premiums change with attained age of the insured. The entire premium schedule can be changed as well based on claims experience.
• It does not offer true own specialty coverage. Benefit is reduced/eliminated if you cannot practice your specialty but are engaged in any other occupation for pay or profit.
• Partial disability benefits have to follow a period of covered total disability. This eliminates a lot of illnesses since they start off as partial claims.
• No recovery benefits if you still suffer a 15-20% income loss after recovering from a disabilities (to protect against lag time when getting paid in arrears and rebuilding your practice)

I would be happy to help you explore your alternatives. I can be reached at dku(at)di4mds.com

 

[dpmd]

As an intern, some would say it is too early to purchase an individual disability insurance policy. However, you can certainly explore your options. What monthly dollar amount would you be able to comfortably allocate to a disability insurance premium?



Did you look into individual plans from top companies like Guardian, Standard, Principal, Ameritas, MassMutual? I have helped several surgeons who switched from the ACS plan after sitting down with me to review the contractual provisions.

A few key limitations with the ACS plan:

• The premium and benefits are not guaranteed. Benefits can be modified and the premiums change with attained age of the insured. The entire premium schedule can be changed as well based on claims experience.
• It does not offer true own specialty coverage. Benefit is reduced/eliminated if you cannot practice your specialty but are engaged in any other occupation for pay or profit.
• Partial disability benefits have to follow a period of covered total disability. This eliminates a lot of illnesses since they start off as partial claims.
• No recovery benefits if you still suffer a 15-20% income loss after recovering from a disabilities (to protect against lag time when getting paid in arrears and rebuilding your practice)

I would be happy to help you explore your alternatives. I can be reached at [email protected]

I did look at other options that were all quite a bit more expensive and I wasn't too worried about the premiums changing since I am very close to having enough net worth to no longer require insurance (nor am I that worried about not having a big payday if I am able to work). But I appreciate that my goals are not universal and others may wish to cover themselves more broadly.

 

[DoctwoB]

Actually as an resident it tends to make more sense to get individual disability. The reason being is that most of us will have a disability policy through our program which caps at 60% of our resident income, meaning ~30k/year pretax. That same disability policy as an attending would pay ~200k/year. This means you're much more exposed to disability risk as a resident.

 

[MD Financial Services Scott]

I have mine plus my life insurance bundled with accidental death and dismemberment (which somehow saves me more than the cost of the ADD plan) through ACS for pretty damn cheap. You want to make sure you have own specialty coverage.

You might want to read your policy, ACS is not a true own specialty definition policy. They have an Own Occupation and Not Engaged clause in their waiting period. I have copied the language from their site here for you to see:

Definition Of Total Disability. This plan defines “total disability” as your incapacity due to an illness or accident to perform the material and substantial duties of your surgical or medical specialty or primary occupation, provided you are not engaged in ANY other occupation for pay or profit. Even if you return to work at another occupation, or resume working in your own occupation on a part-time basis, you may still receive benefits if you have a loss of earnings. Refer to the Residual Disability Benefit section on the next page for details.

Their residual is also a bit weak since to ever get a partial claim you have to have been totally disabled:
Residual Disability Benefits. You will be eligible for residual disability income benefits if you return to work, following a period of a covered TOTAL disability of at least 30 days and your current earnings are no more than 75% of your pre-disability average earnings (whichever figure is higher of your average monthly earnings for the 12 or 24 months prior to the onset of your disability—depends on which period produces the higher average.)

They also have a total clause in the waiting period to then become claim eligible. Just be mindful that these words matter and will specifically determine if your claim capacity.

 

[ram006]

Guardian Berkshire seemed to be the best. I just finished getting it set up.

It absolutely makes sense to get disability insurance during residency as you are, presumably, healthier and there are plans that have riders which allow you to increase your benefits without taking another medical exam to assess your insurability.

Essentially, you take one test in your 20-30's to protect your insurability in your 40-60's.

 

[MD Financial Services Scott]

The quality of the contract is essentially the same across Guardian, Principal, Ameritas, Standard, Mass and Ohio some have a feature here and there that are better than another one but none have a lock on the business. Guardian is good but they don't have some of the other features others have like good health benefits, capital sum, reducing waiting periods, Cobra benefits, non-disabling benefits but they do have the best residual between month 6-12 of a claim. In my opinion when we line up waiting periods, benefit periods, definition of disability benefit amount then it comes down to rates. Just this am I had a 38 year old client working as in EM that the rates were $346 all the way up to $652 per month for him so it really depends on the individual as to which carrier has the best rates for them based on age, gender, medical specialty, state that you live in and of course the discounts your rep can access.

 

[kemper6036]

I did look at other options that were all quite a bit more expensive and I wasn't too worried about the premiums changing since I am very close to having enough net worth to no longer require insurance (nor am I that worried about not having a big payday if I am able to work). But I appreciate that my goals are not universal and others may wish to cover themselves more broadly.

some would argue that having a high enough net worth is the precise reason you need the insurance....to protect what you've worked to accumulate. are you likely to become homeless and starve if god forbid some incident afflicted you, but hopefully being insured would at least insulate your assets from this sort of scenario

its a different dynamic as a trainee where you don't necessarily have the assets but the income is potential. I would argue that one is probably more vulnerable to some sort of career ending scenario at that stage from a financial standpoint

 

[dpmd]

some would argue that having a high enough net worth is the precise reason you need the insurance....to protect what you've worked to accumulate. are you likely to become homeless and starve if god forbid some incident afflicted you, but hopefully being insured would at least insulate your assets from this sort of scenario

its a different dynamic as a trainee where you don't necessarily have the assets but the income is potential. I would argue that one is probably more vulnerable to some sort of career ending scenario at that stage from a financial standpoint

You are thinking of someone who relies on their income not someone just with high net worth. What I am talking about is financial independence where if I were to stop working entirely I could continue to cover my current level of spending (minus that which currently goes toward building my net worth) until the time of my death. That is my target for getting rid of disability and life insurance. Since I have no children that I plan to leave assets to it doesn't bother me if at the end of my life my overall net worth will be decreased should I be unable to keep working next year due to a disability. Nor does it bother me if I need to take a 20% pay cut due to a residual disability since that won't affect my ability to continue the life I lead (though it would delay my financial independence date). I calculated what we need to live on (in case my disability made my husband unable to work) and insured myself for that amount (and have used the savings in the price of the policy to push up my financial independence date) not my total income. Similarly for my life insurance I calculated the amount that would ensure my husband would be able to grieve in peace for a time while he makes decisions about what to do with certain assets that then buy him more time without working if he wants (or I suppose if he needs in the event my death also results in his disability). But for those with kids and those who spend a big chunk of their income (and will likely continue to do so) paying several thousand dollars a year extra may be worth to have the peace of mind that a disability won't make you have to change your lifestyle too much.

 

[kemper6036]

You are thinking of someone who relies on their income not someone just with high net worth. What I am talking about is financial independence where if I were to stop working entirely I could continue to cover my current level of spending (minus that which currently goes toward building my net worth) until the time of my death. That is my target for getting rid of disability and life insurance. Since I have no children that I plan to leave assets to it doesn't bother me if at the end of my life my overall net worth will be decreased should I be unable to keep working next year due to a disability. Nor does it bother me if I need to take a 20% pay cut due to a residual disability since that won't affect my ability to continue the life I lead (though it would delay my financial independence date). I calculated what we need to live on (in case my disability made my husband unable to work) and insured myself for that amount (and have used the savings in the price of the policy to push up my financial independence date) not my total income. Similarly for my life insurance I calculated the amount that would ensure my husband would be able to grieve in peace for a time while he makes decisions about what to do with certain assets that then buy him more time without working if he wants (or I suppose if he needs in the event my death also results in his disability). But for those with kids and those who spend a big chunk of their income (and will likely continue to do so) paying several thousand dollars a year extra may be worth to have the peace of mind that a disability won't make you have to change your lifestyle too much.

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