Disability Insurance

[deleted126335]

---

Members do not see this ad.

.

 

[mille125]

Think of disability insurance as "term" insurance, not an annuity (although some claim to sell that as a product, as well).

If you finish residency at age 30, and you plan to work until you are 65, that's 35 years paying into a disability plan.

If you pay $500/month for your premium, you will "invest" (I use that word loosely if you have "term" disability) - and assuming that premium is fixed and won't suddenly increase substantially over that timeframe - that'll be $210,000 you've put into that plan over that timeframe. Again, if you have term, that money is gone-daddy-gone when you retire.

Now, ask yourself this: What's the true likelihood that you will become permanently disabled and unable to ever work again in that timeframe? Realistically?

If you take that same $210,000, and invest very conservatively even in a low-yield savings account (that gives you, say, 1.7% annually), you will have, with a 3.1% inflation rate and a 15% nominal tax rate, an actual dollar value of $463,000 in that same time period at the end of that investment (adjusted for inflation).

And, that's for doing very little...

NB: THIS IS NOT ADVICE!

-copro

Like others I know of several docs who needed to "cash in" on their disability policies. Both had to provide significant documentation but both ultimately received their expected benefits. Both are legit cases. Doc 1 developed early onset parkinson's disease and can no longer operate. Doc 2 is now a T8 quad following an accident. Both would really like to work and are making much less now.


People do get paid on their policies for legitimate reasons. If you want to go without disability insurance, that is your choice and I really hope that you dont regret it. Most on this forum (myself included) feel that you should reconsider. But it is your life and you have to live it.

 

[mille125]

What? Where did I ever say that? Don't twist my logic.

First off, you have to have homeowners insurance. You can't get a mortgage without it. Furthermore, filing a homeowners claim is usually based on an occurrence that is fairly black and white. You have a property loss; it needs to be replaced. Period. Not so with disability.

Second, you don't need life insurance unless you have a lot to protect and family that will go without if you meet your untimely demise. It all depends on your risk exposure. It all depends on your background assets, as well as their liquidity. Likewise, there exists a plethora of life insurance products, as well, some of which are also scams. If you don't realize that, you haven't done enough research.

Thirdly, you can get whatever umbrella coverage you want, again, depending on what your risk exposure is and what kind of umbrella rider you want. If you honestly think that you're going to hit some jackass in your car and he's going to sue you for far beyond the realm of what is reasonable just because you're a "rich doctor", sure... get an umbrella on your auto policy.

Lastly, I said that disability insurance is a scam, nothing more. The reason why I said that is because these companies charge outrageous premiums and then will fight you tooth and nail not to pay the benefit when a claim is made.


Don't put words in my mouth.


You will note well I never said, "I'm advising you to not get disability insurance."

In fact, I think I've been quite clear about my position on this subject. I don't have it. I can manage my money and my life without it. I have a plan that does not require disability insurance, as I believe that it primarily capitalizes on greedy physicians who look to cash in - not simply provide for - if/when they have a major life-altering event. The insurance companies providing this product know this. And, you have no idea right now how you're going to have to fight to get and maintain that benefit... one you're not likely to use anyway.

Get it if you think you need it. THIS IS NOT ADVICE!

BUT... IF YOU DON'T LISTEN TO ANYTHING ELSE I SAY, LISTEN TO THIS... ALWAYS REMEMBER that there are a lot of - seemingly countless - vultures out there who perceive you as a rich doctor, somewhat naive and not very savvy in the ways of finance, who will spend their time aggressively trying to separate you from your money. The ways they will creatively attempt to do this are as limitless as they are imaginative.

-copro

Not twisting your logic at all. You have said that you dont have disability insurance because

1) Insurance agents are crooks
2) You dont think that you need it and you can self insure
3) The likelihood of permanent disability is exceedingly low.


You could say that life, umbrella, and other insurances fall into this same category. Therefore, I infered that you are also against life, umbrella, and homeowners insurance. Wouldnt you assume that permanent disability has a higher incidence than loss of life in most people.

 

[omegaman]

coprolalia is right, when faced with a large payout Insurance companies don't just write a check, as your disability insurance salesman promised, but they, all to often, will deny the claim and force you to fight for years to get the money you are owed.

I have long term disability, it is about 3000 per year for own occupation with no exclusion for dangerous hobbies. I often wonder if it is money well spent.

Virtually every time I have heard about someone who tried to collect on their disability insurance when they were injured or legitimately disabled they had to hire a lawyer and sue the insurance company to get the money they were owed. It seems that whenever an insurance company is faced with writing a large check they fist deny it, then get their adjustors and legal department to look for ways to avoid paying. Suing the Insurance Company will take two or three years without getting a dime and you may loose.

On top of your disability insurance you need a work on getting enough saving to last two or three years until the insurance company feels like paying.

A family friend, a surgeon was injured in an auto accident spent 3 month in the hospital and is unable to stand for long due to a significant back injury. He is unable to preform surgery and applied for his own occupation disability insurance but the insurance company has refused to pay for over two years and he has had to file a lawsuit to the collect the money.

Where I am currently working a physician who developed sever Parkinson disease in his late forties had to sue the disability insurance company to get the money they owed him.

 

[Arch Guillotti]

coprolalia is right, when faced with a large payout Insurance companies don’t just write a check, as your disability insurance salesman promised, but they, all to often, will deny the claim and force you to fight for years to get the money you are owed.

Of course he's right. Insurance companies are bastards, I hate them almost as much as I hate the right wing religious zealots. They don't want to pay a claim any more than the majority of us who populate this board want to make a claim. I don't blame them for due diligence, I am sure they have been burned before (like the fat slob I saw on some hidden video show playing softball who was out on full disability). I don't they should fight for years either.

This doesn't mean you shouldn't have disability though. While you may not know anyone who has gone out on disability, there folks are out there - and not all of them are sandbaggers. If you look at the actuarial tables (which are probably biased) they will show you that the odds of you going out at some point in your life aren't all that slim. The reality is that people do have unexpected events occur before retirement (even if you feel you are invincible now). Bully for you if you are willing to tolerate this risk. I am not.

 

[coprolalia]

Of course he's right. Insurance companies are bastards, I hate them almost as much as I hate the right wing religious zealots. They don't want to pay a claim any more than the majority of us who populate this board want to make a claim. I don't blame them for due diligence, I am sure they have been burned before (like the fat slob I saw on some hidden video show playing softball who was out on full disability). I don't they should fight for years either.

This doesn't mean you shouldn't have disability though. While you may not know anyone who has gone out on disability, there folks are out there - and not all of them are sandbaggers. If you look at the actuarial tables (which are probably biased) they will show you that the odds of you going out at some point in your life aren't all that slim. The reality is that people do have unexpected events occur before retirement (even if you feel you are invincible now). Bully for you if you are willing to tolerate this risk. I am not.

I have short term disability. Short term. Short term. The way our group's policy is written, this covers me for six months. The policy is governed under ERISA. There is, therefore, no way the underwriter can weasel their way out of coverage for a legitimate claim.

I'm not saying don't get insurance (for those of you who want to put words in my mouth). I hope that's clear enough by now.

I just do not have confidence in the companies providing LTD to actually follow through on the benefit in good faith. I've worked for only 3 full months in PP, and not only have I already been able to pay all of my bills and cover my loan commitments, I've already squirreled away close to $20,000 in what I believe are smart, broadly diversified investments as well as cold, hard cash.

Why would I give some other vulture desperate to get their hands in my wallet a slice of that pie? I've got good genes. I'll take my chances.

To each his own. LTD is a scam.

-copro

 

[tucker27705]

Cop,
Please explain why ERISA will help ensure your STD pays out, and why that logic would not apply to a LTD policy provided as a benefit.
By the way, you seem to have too much time on your hands if you are still beating this dead horse.
Tuck.

 

[Pilot Doc]

Cop,
Please explain why ERISA will help ensure your STD pays out, and why that logic would not apply to a LTD policy provided as a benefit.
By the way, you seem to have too much time on your hands if you are still beating this dead horse.
Tuck.

I would say ... please explain why you bother to insure for a six MONTH loss of income when you have no interest in insuring a sixTEEN YEAR loss of income. You should be able to self-insure for that sort of loss within 12 months of finishing residency.

 

[mille125]

...

 

[mille125]

I have short term disability. Short term. Short term. The way our group's policy is written, this covers me for six months. The policy is governed under ERISA. There is, therefore, no way the underwriter can weasel their way out of coverage for a legitimate claim.

I'm not saying don't get insurance (for those of you who want to put words in my mouth). I hope that's clear enough by now.

I just do not have confidence in the companies providing LTD to actually follow through on the benefit in good faith. I've worked for only 3 full months in PP, and not only have I already been able to pay all of my bills and cover my loan commitments, I've already squirreled away close to $20,000 in what I believe are smart, broadly diversified investments as well as cold, hard cash.

Why would I give some other vulture desperate to get their hands in my wallet a slice of that pie? I've got good genes. I'll take my chances.

To each his own. LTD is a scam.

-copro

Just when I thought that I was understanding some of your logic, you threw another curveball. Why in the world would anyone ever need short term disability? You have already said that you plan to "self insure". How does short term disability even help? I am not trying to criticize. I am trying to understand your thinking. If I have 6 to 9 month of savings why do I need a short term policy. By six months if you havent returned to work, odds are slim that you ever will. Please enlighten and edify.