SDN members see fewer ads and full resolution images. Join our non-profit community!

Disability Insurance

Discussion in 'Ophthalmology: Eye Physicians & Surgeons' started by Perzian, May 15, 2007.

  1. Perzian

    Perzian Member 7+ Year Member

    53
    0
    Feb 4, 2004
    Hello,

    I'm a PGY1, starting ophtho in a few months, was thinking about signing up for disability insurance. Apparently if I sign up now, the premium is lower since I'm still doing medicine, but will be higher if I apply while in residency training.

    Was wondering what people's opinions were on disability insurance.

    Thank you.
     
  2. SDN Members don't see this ad. About the ads.
  3. KHE

    KHE Senior Member Optometrist SDN Advisor 10+ Year Member

    3,312
    277
    Jun 14, 2005
    Most disability insurance policies will only allow you to insure a percentage of your current income. I do not know what if any salary a PGY1 draws but you will likely only be able to insure a percentage of THAT salary. Assuming your residency salary is higher, that's where the higher premium comes from.

    I would recommend you apply now however because it is always easier to increase your coverage rather than to try to establish new coverage. Even though you are presumably young and healthy, the older you get the more likely it will be that you become disabled and the harder it will be get coverage. There are also laws governing most types of disability policies and I believe that those laws stipulate that once you have disability insurance, coverage can NOT be withdrawn. So get it now while the gettin's good.
     
  4. DrEyeBall

    DrEyeBall 7+ Year Member

    95
    0
    Nov 28, 2006
    Get the biggest, the best and the most you can get now.

    Some policies will cover cost of living, occupations specific, etc. You can also get policies that will allow you to increase your coverage a certain times during your life without a physical by only demonstrating an increase in income. These can be hard to get later. If you develop a problem (diabetes, hepatitis, etc) you may never be able to get them later. These policies cost a fair amount but will allow you to sleep well at night once you are making a nice living and have a family to cover as well.
     
  5. V05

    V05 2+ Year Member

    47
    0
    Apr 3, 2007
    Texas
    You are right- it is most advantageous to start your personal disability insurance now.

    As a resident, you will be able to get up to your current salary in coverage at internal medicine rate. You will be able to increase your coverage later at your profession specific rate (high for ophthalmology), but at least this portion will be locked in at the lower rate (i.e. if you can insure for 2,500/mo now and increased to 10,000/mo later, you would have gotten a steep discount on 25% of your premium).

    Once you start practicing, your practice, group, or hospital may give you group insurance. The quality of these group policies vary and most group practices will buy the less expensive policies (i.e. without own occupation).

    Buying personal disability insurance is a very important decision. You need a financial advisor who will give you the best policy possible. This includes optional riders like own occupation, cost of living (inflation), metal health benefits, option to increase benefits without repeat physical, and right to claim with reduced income. You also need to make sure the insurance company is sound financially.

    Your advisor should give you a range of choices- be aware of advisors that only promote one package.

    Lastly, I agree with the above post- get the best policy possible. It maybe a little more expensive now, but once you start working in a few years, the expense will be negligible.
     
  6. Isom

    Isom New Member

    6
    0
    Jun 21, 2004
    I'm a PGY I now and looking into disability insurance. I'm getting some quotes of around $90-120 a month for $2500 a month coverage. Those plans are with own occupation, residual benefit (if you're only making a percentage of previous salary, cost of living adjustment, and ability for future increase at the same premium level. Just wondering if anyone could comment on those quotes and or recommend any good insuarance companies they went through. I've heard Guardian and Berkshire are good.

    I also have disability through the hospital now, so I was wondering if most ophtho residents try and lock in this year at the internal medicine rate or wait until they're done with residency and take the risk they won't get disabled during those four years and pay a higher ophtho rate.
    Thanks.
     
  7. ckyuen

    ckyuen Senior Member 7+ Year Member

    210
    0
    May 26, 2003
    Hawaii
    As a general rule guardian is best for women no rate difference for gender, Standard offers good coverage for men with basic own occupation policies. Best policy with all the bells and whistles is provided by Union Central. I think they will give a resident 4k of coverage. Note there is a big discount if you do this in training. Do it in ophtho residency, so you can write details of your job that require you do surgery. that way if you are unable to operate you collect. You can get riders to increase monthly benefit etc. But in general if you buy in residency you save like 25%. Also some states are cheaper, so if you're in California rate will be higher. If training in texas and moving to cali, buy in texas, rates will be set based on that, and when the adjust they adjust based on texas rates. I pay about 320 a month for a little over 10k coverage. PM me if you guys are in texas or want me to refer you to my disability guy. I get nothing out of it, but he did a great job explaining disability insurance and getting me great rates. I got quotes from other people for the same policy with the same companies that were higher. I'm not sure if it's b/c he's such big hitter that he could provide a group discount for residents. My wife did insurance for a while and apparently this is not uncommon. By the way everyone should buy their disability in residency. I think my policy was about 130 a month for 3.5 or 4k coverage.
     
  8. jsh1986

    jsh1986 5+ Year Member

    69
    3
    Apr 28, 2010
    My attending suggested to me today that I strongly consider starting disability insurance after I match/before I start my internship because I will be able to "lock in the lowest rates possible on disability insurance."

    Just to clarify some points: how are people on this board assuming that residents get a ~ "25% discount" if they purchase disability insurance while still residents? I see some people quoting $90/month for $2500 of benefits. Once you finish residency, become an attending, etc. will the coverage amount increase to be more commisurate with your income and the premium will stay the same, ie provide you with the aforementioned 25% discount? And does the premium/coverage rate simply increase with inflation, or in other words, how do early buyers lock in a good rate for the long term (I am obviously unfamiliar with the terms of these contracts).

    My source of confusion is based on some of the numbers that have been thrown around. ckyuen pays $320 for $10,000, or has $31.25 of insurance/dollar premium that is paid. Isom would pay $90 for $2500, or $27.78 of insurance/dollar premium is paid. Therefore, ckyuen receives the "cheaper" coverage.

    Just wanted to gain a better understanding into the process so that I/other students/residents can plan accordingly! thanks in adv.
     
  9. MR Insurance

    MR Insurance 7+ Year Member

    131
    2
    Apr 20, 2010
    MD
    A lot of your pricing questions will depend on the medical specialty, resident state, age and could even be impacted by current health. For example, people who are overweight may be required to pay higher premiums to adjust for the higher risk.

    The benefit of locking in a lower rate now is that you will pay a smaller amount on that specific amount of coverage for the rest of your career (provided you buy a non-cancellable policy). This is not an exact percentage however, like you are assuming. I would say on average the cost of disability insurance increases approximately 3-4% each year. For example, $1,000 annually at age 30 - $1,040 at age 31 - $1,081 at age 32 - $1,123 at age 33, and so on. Therefore, you are able to lock in the lower rate without incurring an increase on that select benefit amount.

    For the future, you want to make sure you include a specific provision called a future increase option or future purchase option – each insurance carrier has a different name for it. The basis is that this provision allows you to increase the benefit amount, at a future date, without requiring medical screening again. The pricing will be based on the attained age, so you will be paying a higher marginal cost on the additional benefits purchased. However, the original benefit amount you purchased will remain at the same cost.

    Speaking of discounts though, there may be a discount program set up at your school which would allow for a specific discount, such as 10%, or 15%. Each carrier is different with respect to discounts. The other option is to set up your own discount plan, if you have enough colleagues interested.

    Does that help?
     
  10. jsh1986

    jsh1986 5+ Year Member

    69
    3
    Apr 28, 2010
    "The pricing will be based on the attained age, so you will be paying a higher marginal cost on the additional benefits purchased. However, the original benefit amount you purchased will remain at the same cost."

    I think this answered my question. So, by buying insurance super early as a student/resident, you can have for the rest of your career a benefit plan that is fixed at a discounted "resident premium" and if you later become for example a very high volume surgeon and want to increase your total benefit package, you would simply add additional coverage, albeit at the higher "older age" rate, thus giving you a sort of intermediate priced coverage.

    The future purchase option sounds almost too good to be true-- seems like people could abuse this as soon as they start developing back problems, etc and then cash in a few years later.

    how can i determine if my school is participating in a discount program?

    thanks for the very helpful advice!


     
  11. MR Insurance

    MR Insurance 7+ Year Member

    131
    2
    Apr 20, 2010
    MD
    "I think this answered my question. So, by buying insurance super early as a student/resident, you can have for the rest of your career a benefit plan that is fixed at a discounted "resident premium" and if you later become for example a very high volume surgeon and want to increase your total benefit package, you would simply add additional coverage, albeit at the higher "older age" rate, thus giving you a sort of intermediate priced coverage."

    -You got it, the averaged pricing between the original benefit and new benefit ends up being affordable, rather than having waited to buy the full benefit at an older age. But I'd like to make sure you are seeing this in the right perspective. As a Senior medical student you can only obtain about $2,500 of monthly benefit. A $100K income alone, will allow for $5,000 of monthly benefit. So realistically it's not just the very high volume surgeon that will want to increase his/her benefits, it's pretty much every physician post residency. Hence why the Future Increase Option is so critical for young docs.

    "The future purchase option sounds almost too good to be true-- seems like people could abuse this as soon as they start developing back problems, etc and then cash in a few years later."

    -Also correct. Only thing is that you cannot increase the benefit while you are already on claim. (Some companies used to let you do so, but not any longer)
     

Share This Page