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Disability Insurance

Discussion in 'Finance and Investment' started by Powder, Dec 4, 2007.

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  1. Powder

    Powder Member 5+ Year Member

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    Feb 7, 2005
    I am looking into buying disability insurance. What sould I be looking for and what should I avoid? How much do I need? Should I buy it while still in residency? Any advise is welcome. Thanks
     
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  3. The White Coat Investor

    The White Coat Investor AKA ActiveDutyMD Partner Organization 10+ Year Member

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    Nov 18, 2002
    Physician
    SDN Partner
    You need own-occupation, specialty specific coverage. Get as much as they'll give you while you're in residency (probably ~$3500.) There are only 2-3 companies out there that do this. Guardian/Berkshire and Standard were the only two when I got my policy. Expect to pay ~4% of the benefit (i.e. I pay ~$130/month for $3500/month of coverage. )
     
  4. Tenesma

    Tenesma Senior Member 10+ Year Member

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    Jun 11, 2002
    it is CRUCIAL that you get individual coverage BEFORE you get group coverage... because that way the benefits are ADDITIVE

    if you get group coverage first then it doesn't matter re: individual coverage because it won't be additive

    also important to save up about 6 months of salary because you never know what will happen with your job or your life --- and also because disability insurance kicks in only after 3 months (and that is if they agree that you are disabled - they may contest it)...
     
  5. spondy14

    spondy14 Attending 10+ Year Member

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    Sep 9, 2006
    So where do you get your disability insurance after residency and where would you suggest??
     
  6. Biscuit799

    Biscuit799 7+ Year Member

    808
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    Oct 29, 2004
    Most programs/schools/employers offer disability insurance. Also, AFLAC and most other big insurance companies offer packages.
     
  7. Doctor Bagel

    Doctor Bagel so cheap and juicy Moderator Emeritus 10+ Year Member

    The problem with getting it through an employer, school, etc. is that coverage usually ends when you lose affiliation with that group. Ideally, you would look for coverage that you can take with you, which means you have to get a private plan. The real plus with getting it earlier is that you have to apply, so the younger and healthier you are, the better.

    I agree with the advice above that you want to get coverage for your own occ as long as possible, and you want that definition to be based on your specialty, especially if you're in a specialty with greater physical demands. You also want to look at things they subtract from your benefits. For example, is social security disability additive or do they deduct that from your private disability. How about disability through your employer if you have an individual plan. Also, what happens if you work parttime?

    I'll say that The Standard is a decent company that prides itself on treating their clients well. But I worked for them for a few years, so I'm a little biased. I didn't work for anybody else in the field, so I can't say they're better than anybody else.
     
  8. Doctor Bagel

    Doctor Bagel so cheap and juicy Moderator Emeritus 10+ Year Member

    I don't know. When I did disability insurance work, we deducted all other sources of pay, regardless of when they signed up for the other plan or where it came from. It really depends on how the policy is written for the group insurance. Our policies were very broad in what we could deduct.

    When it kicks in also depends on the policy provisions. Some are after 3 months and some after 6. Companies also offer short term disability that can be payable sooner. Whether those are economically valuable depends on how much you can save and what the rates are.

    Basically, like all insurance deals, it just comes down to reading the policies carefully and making sure you understand the terms. Don't trust the people who you trying to sell stuff to you to know what they're talking about.
     

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