Can this rider be purchased only if you initiate coverage as a resident vs as an attending. Because Shogun0660 alluded to that fact. Also, Gfunk6 said that the rates are better as a resident. What are the facts concerning rates, increasing coverage and timing of securing the policy? Thanks for the scoop!
This rider can be purchased at any time, during training or as an attending. There are restrictions however on age - for example, you may not be eligible to purchase this rider after age 45. This is because insurance companies will only allow one to exercise the increase option up to a certain age (such as 45 or even 55 with some carriers). Depending on the person you work with, special approvals may be extended, but typically you are able to exercise these increases at each policy anniversary, up to the specified age.
Gfunk is correct, premiums are lower simply because you are younger as a resident. The younger one is, the cheaper the coverage (provided all else is equal). You may however, qualify for a higher benefit as a resident than as an attending:
Example- With special limit programs available to last-year residents, you may qualify for $6,500 of monthly benefit. Depending on your work situation as an attending, if you are provided group coverage by your employer, you may only be eligible to purchase $2,000 of monthly benefit, because the group coverage is included in your eligibility calculations. Since group coverage is not as good as individual, you would have been better off purchasing the $6,500 during residency.
The primary focus of securing the policy is your health (and also circumstances like the one listed above). Disability insurance underwriting is fairly complex and can be difficult - therefore you want to apply and obtain this type of coverage when you are still healthy. Is there a huge difference between last-year residency and first year attending? Maybe not, but why take the chance... In terms of premiums, the increase in cost is probably around 4% each year you wait.
On a side note, if it is the premiums that are holding you back, ask to see graded premium options. This is a graded schedule of premiums (cheaper today and becomes more costly every year). The benefit is to lock in the insurability now - then convert to level premium once your income is greater. Allows you to take advantage of good health, and still take advantage of lower guaranteed level rates.
The financial professional you work with should review all of this with you, but look for non-cancelable. Amongst other things, it secures that your premium schedule will not change over the years, as long as you always pay your premiums on time.
