Disability Insurance

[Caverject]

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For those of you who are active duty, have you ever considered private individual disability insurance? Does anyone have any suggestions or tips in the area? I've searched around the internet but it seems being active duty disqualifies you for most plans. I have a family and about to take on a mortgage for the first time in my life. If something, God forbid, were to happen to me where I'm medically boarded out, I'd like to have some sort of way to make ends meet and not be forced to move. VA disability payouts look like a joke on top of the fact you have to wait forever for them to kick in. Any thoughts or guidance on the matter would be appreciated!

 

[armytrainingsir]

Looks like there are a couple of options based on this

Disability Insurance for Military Physicians - The White Coat Investor - Investing & Personal Finance for Doctors

During medical school, I started a disability plan, paid one month, and then went on AD. The insurance company put my plan on hold, and I resumed payments a decade later, at a guaranteed rate without having to prove insurability. Which doesn't help your current situation at all, but might help a medical student reading this.

You are correct that the VA system is set up more for enlisted than officer, and certainly not for professionals.

 

[armytrainingsir]

https://www.di4mds.com/wp-content/uploads/2017/11/DI4MDS-Military_Physicians_Dentists_Guide_to_DI.pdf?x57949

 

[MD Financial Services Scott]

For those of you who are active duty, have you ever considered private individual disability insurance? Does anyone have any suggestions or tips in the area? I've searched around the internet but it seems being active duty disqualifies you for most plans. I have a family and about to take on a mortgage for the first time in my life. If something, God forbid, were to happen to me where I'm medically boarded out, I'd like to have some sort of way to make ends meet and not be forced to move. VA disability payouts look like a joke on top of the fact you have to wait forever for them to kick in. Any thoughts or guidance on the matter would be appreciated!

If you are currently active duty then your solution will be Mass Mutual.

 

[Caverject]

During medical school, I started a disability plan, paid one month, and then went on AD. The insurance company put my plan on hold, and I resumed payments a decade later, at a guaranteed rate without having to prove insurability. Which doesn't help your current situation at all, but might help a medical student reading this.

Wow, that is awesome advice! I wish I had known that 12 years ago. I hope students find this post and don't blow it off.

 

[Caverject]

If you are currently active duty then your solution will be Mass Mutual.

Yeah, that seems to be the one that pops up in google. Anyone have experience with it?

 

[MD Financial Services Scott]

They are a good company to work with both on admin and claim time.

 

[jurassicpark]

I'm with Mass Mutual. Contacted them regarding my app to the Reserve since I just recently increased my term and disability during these COVID times. They said nothing changes for me, unless I get deployed overseas then they have to fancy stuff

 

[MD Financial Services Scott]

Reserves are very different from an underwriting situation, easily can get multiple carriers for reserves, it is the active duty that are so limited in the disability space. Life insurance is pretty easy to get for reserves or active as well.

 

[Mace1370]

I signed up for Mass Mutual while on active duty. As I am not disabled, I have no experience with them other than the sign up process (which seemed professional and routine) and giving them money every month. I have heard many others use Mass Mutual, so that seems to be one of the only (the only?) option while on active duty.

 

[pgg]

I've had a Mass Mutual own occ policy for a while. Maybe 5 years? No complaints so far.

I also have a much cheaper, much more limited policy with the AMA. The benefit is capped at $2500/month, and it only pays out for 5 years, but they'll issue to AD military.

 

[DrMetal]

Any body mind sharing what you pay for your premiums?

I hate the insurance industry, I think it a total scam...but of course I have insurance for everything (including life). I personally drew the line at disability, b/c I thought the premiums were too high, and the duration of coverage too short. I figure I have enough in savings (liquid cash) to help us out, if I should become disabled (of course I don't have an endless supply, but ya know).

I guess I'm getting at a philosophical point: how much of a premium are you willing to pay, to cover whatever it is you're trying to cover?! (life, car, disability, etc).

 

[pgg]

Any body mind sharing what you pay for your premiums?

My Mass Mutual benefit is $4000/month to age 65, with a 365 day exclusion period. Own occ, COLA, future insurability riders. Premium is $2867 per year. I've had the policy for 5 years. First got it when I was 40. No health problems. It's expensive.

Disability insurance for people on AD is tricky, since we already have "disability insurance" via the medical retirement system. So the max benefit is a little limited, and I had to document moonlighting income to justify the benefit. But I figured I only needed about $4K/month added to what the military would give me if I was disabled so I didn't get as large a policy as I could have.

I also have low costs - no student or consumer debt, house paid off, cars paid off, kids are older and out of the house. So I wouldn't necessarily be thrust into poverty if disabled, assuming the medical bills were paid by someone else.

If I had it to do all over again, I might skip the future insurability rider. Realistically, by the time I retire from the Navy I'll be essentially financially independent and I might drop DI entirely once the pension checks start coming.


The AMA policy I have costs almost nothing, benefit is $2500/month but only pays out for 5 years. Premium is about $360/year.

 

[Caverject]

My Mass Mutual benefit is $4000/month to age 65, with a 365 day exclusion period. Own occ, COLA, future insurability riders. Premium is $2867 per year. I've had the policy for 5 years. First got it when I was 40. No health problems. It's expensive.

Disability insurance for people on AD is tricky, since we already have "disability insurance" via the medical retirement system. So the max benefit is a little limited, and I had to document moonlighting income to justify the benefit. But I figured I only needed about $4K/month added to what the military would give me if I was disabled so I didn't get as large a policy as I could have.

I also have low costs - no student or consumer debt, house paid off, cars paid off, kids are older and out of the house. So I wouldn't necessarily be thrust into poverty if disabled, assuming the medical bills were paid by someone else.

If I had it to do all over again, I might skip the future insurability rider. Realistically, by the time I retire from the Navy I'll be essentially financially independent and I might drop DI entirely once the pension checks start coming.


The AMA policy I have costs almost nothing, benefit is $2500/month but only pays out for 5 years. Premium is about $360/year.

Thanks for the numbers. That was extremely helpful!

 

[MD Financial Services Scott]

My Mass Mutual benefit is $4000/month to age 65, with a 365 day exclusion period. Own occ, COLA, future insurability riders. Premium is $2867 per year. I've had the policy for 5 years. First got it when I was 40. No health problems. It's expensive.

Disability insurance for people on AD is tricky, since we already have "disability insurance" via the medical retirement system. So the max benefit is a little limited, and I had to document moonlighting income to justify the benefit. But I figured I only needed about $4K/month added to what the military would give me if I was disabled so I didn't get as large a policy as I could have.

I also have low costs - no student or consumer debt, house paid off, cars paid off, kids are older and out of the house. So I wouldn't necessarily be thrust into poverty if disabled, assuming the medical bills were paid by someone else.

If I had it to do all over again, I might skip the future insurability rider. Realistically, by the time I retire from the Navy I'll be essentially financially independent and I might drop DI entirely once the pension checks start coming.


The AMA policy I have costs almost nothing, benefit is $2500/month but only pays out for 5 years. Premium is about $360/year.

I know there really is no alternative for AD but $4k with those features for $2800 is expensive, that is about $70 per month per $1,000 of benefit. A couple of things you may look at is the insurability rider and COLA, see how much you could get the policy to drop in price if those were left off.

Be sure to double check the AMA policy because you will have a 'total and continuous' clause in your waiting period which really prevents any claim capacity thus why it is cheap. The other thing that you need to be mindful of is even though you are buying $2,500 of benefit from AMA the reality is at claim time they will look at your income, all of your other benefits being received and will pay you 'Up To' the $2500 as long as their payment plus everything else is not in excess of 66% of your income.

 

[DrMetal]

I know there really is no alternative for AD but $4k with those features for $2800 is expensive, that is about $70 per month per $1,000 of benefit.

Yeeahup, that's what she said. Too complicado for me, that's why I've stayed away from disability insurance.

 

[pgg]

Yeah, I'm paying a lot for it. For now I'll just leave it alone, I'll probably drop the policy entirely or make adjustments to it when I retire from the Navy in 2022.

I hate the AMA with the fire of a million suns for all the evil work they do, but I think the benefit would pay out. My moonlighting income is high and even 100% military med retirement plus the Mass Mutual payout wouldn't crack 50% much less 66%.

I've always viewed DI as "not poverty" insurance rather than "high rollin' lifestyle" insurance, so I'm nowhere near insured to the level that would replace most or all of my income.