Disability insurrance

[deleted875186]

So I’m looking into getting a disability insurrance policy, contacted an agent and got quotes for same specialty disability policies, looks like the rates are around 200$/month for a 5k/month benefit or 400-500$/month for a 10k/month benefit.

keep getting letter from AMA sponsored group disability which shows rates as low as 100$/month for a 10k policy. What’s the deal? Are these policies legit? Must be some catch, haven’t called them to look into it yet. Anyone have any info?

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[okayplayer]

Cheap ones are not specialty specific/own occupation.

Aka you could become paraplegic and they’d say you were still able to do telemedicine or disability exams at the VA so therefore they aren’t paying out.

 

[DirtDocMD]

$200 a month for a 45-50 y/o in Texas, for $15k a month benefit, through TMAIT. FWIW.......

 

[Guillemot]

The AMA policy is probably a weak policy. The rates you were quoted for the likely good policy sound a bit high though.

 

[pgg]

I have an AMA DI policy in addition to my Mass Mutual policy. It's cheap mainly because it limits payments for 5 years after injury. I got it because at the time they were the only ones who'd insure someone on active duty in the military.

 

[deleted875186]

I have an AMA DI policy in addition to my Mass Mutual policy. It's cheap mainly because it limits payments for 5 years after injury. I got it because at the time they were the only ones who'd insure someone on active duty in the military.

I see, why would I need a disability policy that limits payments for 5 years? Crazy.

how much do you pay with mass mutual if Yoj don’t mind sharing?

 

[GassYous]

I got mine with ameritas through dr disability. Heard about it through wci where they advertise extensively. About 3.5 a year for 10k a month posttax with all the riders. It depends on your state, my residency state was a lot cheaper than my attending state. Probably will keep it for about ten years and then I expect to have enough of an fu account to not need it anymore

 

[DirtDocMD]

Also, if you’re a 1099, make SURE (if you didn’t already know), to pay your premiums with AFTER-TAX money. If you pay with PRE-TAX, then your benefits/payout ARE subject to taxes.

Trying to save a few hundred $$ to $1000 a year in taxes, could cost you HUNDREDS OF THOUSANDS in benefits.

https://www.thehartford.com/business-insurance/strategy/disability-insurance/taxation-of-benefits

 

[DocVapor]

Mine is ameritas. ~13k post tax benefit, own occupation rider, rate increase rider, student loan repayment rider for extra money on top of the 13k. 35-40 y/o range. Probably some other factors in there I can't entirely recall. Final tally is a hair under 6k/year.

 

[pgg]

I see, why would I need a disability policy that limits payments for 5 years? Crazy.

how much do you pay with mass mutual if Yoj don’t mind sharing?

The AMA thing was all I could get for a while. It was better than nothing.

I pay $2867/year for a $4K/month benefit, with some riders. It's expensive as own occ DI goes, but I got it relatively late (maybe 6 years out of residency?) and couldn't shop around because of my AD military status. There were probably better deals unavailable to me.

I chose a low benefit (only $4K/mo) and a longer exclusion period because the military wouldn't have cut my pay off the day I got hurt, and the military's medical retirement system is effectively a disability policy too.

Also, I probably erred in getting the future insurability rider that allows me to increase the benefit without going through underwriting again. A year from now when I retire from the Navy and go get a normal job, I'll be eligible to increase my DI benefit but won't need it any more. COLA rider was another soft call. I may cancel the policy entirely next year. I'm 47.

 

[thinkorswim]

As mentioned above, you’ll want to go with an insurer that offers a true own-occupation policy. I have Guardian, but there are a few other companies WCI recommends for strong policies.

These policies may be slightly more expensive, but the peace of mind it buys you early in your career is priceless. For example, if I were to lose a finger and can’t practice anesthesia in the OR anymore, I can always just go sit in a preop clinic and collect 100% of my benefit plus whatever salary I’ll be making there. You’d have to give me a sitter though because I would probably go crazy.

 

[Zekchar]

$550/month for $16K guardian own occupation with multiple riders policy. This is not a place to skimp. A cheap policy is a s%hit policy.

 

[sevo00]

Ameritas 15k month benefit for $350 a month. Got it while I was a resident. Own occupation

 

[IMGASMD]

Met life. (No longer in LDI business)

340/month
13500/mo

Got it when I was in my mid 30s, during residency. Upped it to current coverage 3 years ago.

 

[MD Financial Services Scott]

So I’m looking into getting a disability insurrance policy, contacted an agent and got quotes for same specialty disability policies, looks like the rates are around 200$/month for a 5k/month benefit or 400-500$/month for a 10k/month benefit.

keep getting letter from AMA sponsored group disability which shows rates as low as 100$/month for a 10k policy. What’s the deal? Are these policies legit? Must be some catch, haven’t called them to look into it yet. Anyone have any info?

Those rates seem really pretty high for $5 or $10k. As a person finishing residency you should probably be around $20-$25 per month per $1,000 of monthly benefit.

AMA is cheap because it is hard to qualify for claim and easy for them to kick you off once you are on. Their issues:
They have a Total and Continuous clause in their waiting period.
The definition of disability they will tell you is Own Specialty definition but when you read the policy it is Own Occupation as long as you are not working in any occupation.
They can change the terms or cancel the policy anytime they want.
The premium increases at 40, 45, 50, 55, and 60. The real killer for most is that it is a group policy which then most employer provided disability policies have a clause stating that they will offset for other group policies. What that means is if you were to receive $15k from your employer but you have the AMA policy for $10k then that $15k from your employer will shrink to $5k because you are getting $10k from AMA.

You can literally be buying something that is eliminating another benefit you were set to receive.

 

[deleted875186]

Those rates seem really pretty high for $5 or $10k. As a person finishing residency you should probably be around $20-$25 per month per $1,000 of monthly benefit.

AMA is cheap because it is hard to qualify for claim and easy for them to kick you off once you are on. Their issues:
They have a Total and Continuous clause in their waiting period.
The definition of disability they will tell you is Own Specialty definition but when you read the policy it is Own Occupation as long as you are not working in any occupation.
They can change the terms or cancel the policy anytime they want.
The premium increases at 40, 45, 50, 55, and 60. The real killer for most is that it is a group policy which then most employer provided disability policies have a clause stating that they will offset for other group policies. What that means is if you were to receive $15k from your employer but you have the AMA policy for $10k then that $15k from your employer will shrink to $5k because you are getting $10k from AMA.

You can literally be buying something that is eliminating another benefit you were set to receive.

This is great, thank you.

why are all the rates I got quoted so high? I’m in Massachusetts. Basically 200$/ month for a 6500$/month policy from Gaurdian. Other insurers were similar. Should I contact a different agent?

 

[GassYous]

Depends on what state you are in, if you're a resident or attending, age, illnesses, etc.

 

[JiPo]

I have occasional PVCs and i was quoted over 50% increase in monthly premium with no benefit increase, so I ended up going with Guardian GSI (guaranteed standard issue). It was more expensive than I wouldve liked. $222/month for $5000 benefit, COLA rider and own occupation rider.

It is ridiculous how much they will charge extra for completely benign conditions. I’ve also heard people getting quoted 30% increase for occasional GERD.

Get the DI before you have ANY conditions documented on your record regardless of how benign they are.

 

[MD Financial Services Scott]

This is great, thank you.

why are all the rates I got quoted so high? I’m in Massachusetts. Basically 200$/ month for a 6500$/month policy from Gaurdian. Other insurers were similar. Should I contact a different agent?

I would suggest talking to a different agent, it does not sound like you are working with an experienced physician insurance specialist.

 

[dannyboy1]

I have occasional PVCs and i was quoted over 50% increase in monthly premium with no benefit increase, so I ended up going with Guardian GSI (guaranteed standard issue). It was more expensive than I wouldve liked. $222/month for $5000 benefit, COLA rider and own occupation rider.

It is ridiculous how much they will charge extra for completely benign conditions. I’ve also heard people getting quoted 30% increase for occasional GERD.

Get the DI before you have ANY conditions documented on your record regardless of how benign they are.

Agreed. Best not to visit any doctor until you have life/disability insurance settled. I know a guy who got quoted a huge increase because of a slipped disc. Otherwise healthy 30 y/o. No doubt most of us have slipped discs and such just never went to the doctor and got it documented….

 

[GassYous]

I have occasional PVCs and i was quoted over 50% increase in monthly premium with no benefit increase, so I ended up going with Guardian GSI (guaranteed standard issue). It was more expensive than I wouldve liked. $222/month for $5000 benefit, COLA rider and own occupation rider.

It is ridiculous how much they will charge extra for completely benign conditions. I’ve also heard people getting quoted 30% increase for occasional GERD.

Get the DI before you have ANY conditions documented on your record regardless of how benign they are.

That's so true. There's that story about one of the famous bloggers who was told to get disability insurance as a medical student with no dependents which made no sense. Then because of a medical condition they were denied and ineligible to apply again so they got screwed badly for no good reason.

 

[whoareyou]

fyi if you're a female, your DI would be pricier than your male counterpart for that alone.

 

[deleted875186]

Got more quote from another agent that does only physician DI.

400$/month for a 12k/month policy. About the same rate as I was quoted before, same companies, same riders, maybe rates in Massachusetts are just high.

Thanks for all the responses.

 

[IMGASMD]

Got more quote from another agent that does only physician DI.

400$/month for a 12k/month policy. About the same rate as I was quoted before, same companies, same riders, maybe rates in Massachusetts are just high.

Thanks for all the responses.

I seemed to remember @MD Financial Services Scott, mentioned sometimes different states have different rates. If you are moving to a low COL state, it maybe better to get it there......

just don’t get hurt while moving....

 

[GassYous]

fyi if you're a female, your DI would be pricier than your male counterpart for that alone.

This is being phased out afaik and there are companies that keep it the same

 

[MD Financial Services Scott]

Got more quote from another agent that does only physician DI.

400$/month for a 12k/month policy. About the same rate as I was quoted before, same companies, same riders, maybe rates in Massachusetts are just high.

Thanks for all the responses.

That state can be more expensive than others due to their unisex rates, so you have to look at non-compact filing carriers for the better rates there.

 

[Drwine]

I will add that I dropped mine when I turned 60, was debt free and an empty nester and had a lot of savings and retirement account balances. At a certain point, disability means retirement.

 

[deleted875186]

I will add that I dropped mine when I turned 60, was debt free and an empty nester and had a lot of savings and retirement account balances. At a certain point, disability means retirement.

I’m hoping when I hit 50 I can get rid of disability insurrance altogether, or at the very least dial back my policy, but will see how my retirement savings go.

 

[abolt18]

Got mine through Principal. $157 a month for a $5K benefit as a resident. This includes a residual disability rider, catastrophic disability rider, future increase rider, COLA rider.

When I increase my benefit after fellowship I will get rid of the catastrophic rider because it becomes obsolete.

"What You Need To Know About Physician Disability Insurance" What You Need To Know About Physician Disability Insurance

 

[BLADEMDA]

IMHO, most of those on here should have disability insurance of some kind. I used to carry $30K per month but now have about $10k per month of coverage. The concept is you carry more insurance when your assets are lower and then as they go up you need less insurance until semi-retirement when you don't need any. That's why some of you should have 2 policies and not one so you can drop a policy at age 50 or 55 and keep the other one until age 60-65. Perhaps, your agent can structure the insurance to allow this type of long term planning.

You MUST get the policy in residency or right after before any chronic conditions pop up. You don't want to pay higher rates as a 40 year old when you can lock in as a 32 year old. At least buy 1 policy as a new attending (like I did) then add a second policy as your income ramps up. Discuss this with your agent and make sure to shop around a bit before buying a policy.

• Future Purchase Option– This rider allows you to buy a larger benefit at a later date without any pesky questions about your health or hobbies. If you are in a position (such as a resident) where you cannot afford as much as you need, purchase this rider.

 

[MD Financial Services Scott]

You can always just reduce the face amount of an existing policy on a disability policy as your needs decrease.

 

[Shimmy8]

Anyone out here have a Northwestern Mutual policy? Recently was quoted policies with all of the riders, occupation specific, etc, and they have policies that essentially start low ($366/mo for $15k coverage), but rise by year with dividend payout. Overall policy costs are similar, but I hadn't seen this structure before.

 

[deleted875186]

Anyone out here have a Northwestern Mutual policy? Recently was quoted policies with all of the riders, occupation specific, etc, and they have policies that essentially start low ($366/mo for $15k coverage), but rise by year with dividend payout. Overall policy costs are similar, but I hadn't seen this structure before.

That sounds excellent, I didn’t get a quote from northwestern.

 

[caligas]

At what multiple of annual spending for net worth would you guys consider dropping disability?

 

[Shimmy8]

That sounds excellent, I didn’t get a quote from northwestern.

I believe you have to go through a NWM agent to have access to their policies. And the rise in premium is a little steep, to be honest. BUT if I'm going to drop it around age 55-60 I think it's def the best policy.

 

[deleted126335]

At what multiple of annual spending for net worth would you guys consider dropping disability?

When you believe that you are self insured for the financial aspects of disability.

Goes along with the “how much is enough to walk away” threads

 

[BLADEMDA]

At what multiple of annual spending for net worth would you guys consider dropping disability?

I still have some disability even though I hit my full retirement number. I was able to reduce my cost so I carry some disability insurance but less than 1/2 what I had 15 years ago.

Once I go part time carrying disability insurance probably doesn’t make fiscal sense. You also need to earn more in income than the policy pays out.

 

[dannyboy1]

I will add that I dropped mine when I turned 60, was debt free and an empty nester and had a lot of savings and retirement account balances. At a certain point, disability means retirement.

Considering that the disability payout automatically ends at age 65 it only makes sense to continue paying the monthly premiums if you think there is a high likelihood that you will file a claim….

 

[BLADEMDA]

People buy LTD policies to replace income for as long as they’re disabled, so benefit period length is among the most important decisions to make when applying for a policy. Standard choices include 2, 5, or 10 years; to age 65 and to age 67. A few companies, including Guardian, offer coverage to age 70. While a longer benefit period is clearly desirable, it comes at a cost. How do you make right choice for your needs?

 

[caligas]

I still have some disability even though I hit my full retirement number. I was able to reduce my cost so I carry some disability insurance but less than 1/2 what I had 15 years ago.

Once I go part time carrying disability insurance probably doesn’t make fiscal sense. You also need to earn more in income than the policy pays out.

So if income drops below theoretical annual payout due to part time status, am I legally obligated to let them know?

I guess at that point it probably makes sense to just drop it anyway.

 

[dannyboy1]

So if income drops below theoretical annual payout due to part time status, am I legally obligated to let them know?

I guess at that point it probably makes sense to just drop it anyway.

I’m sure they ask for proof of income when you file the claim. These people aren’t stupid. It’s all been tried before ….

 

[IMGASMD]

So if income drops below theoretical annual payout due to part time status, am I legally obligated to let them know?

I guess at that point it probably makes sense to just drop it anyway.

What was explained to me is they look at your billing for the past year or two to make a determination and/or your W2 and income from anesthesia services.

 

[MD Financial Services Scott]

That sounds excellent, I didn’t get a quote from northwestern.

Just be mindful that the contracts from that company Do Not have a True Own Specialty definition of disability. What that true own specialty definition does is that it allows you to become disabled and then if you go take another job then that new occupation income does not reduce your benefit from the disability payout regardless of how much income you make post disability. The NWM contract will become % of income lost is % of benefit paid once you start making greater than 20% of your pre-disability earnings. The other issue with what they sell the most is they have an annually increasing premium which if you look at it long term even net of the dividend your premiums will become greater than $10k per year if you have a $15k benefit with them. Be very careful with that company.

 

[MD Financial Services Scott]

So if income drops below theoretical annual payout due to part time status, am I legally obligated to let them know?

I guess at that point it probably makes sense to just drop it anyway.

It depends on the carrier and if that carrier is doing financial underwriting at claim time vs. at application time. An example would be the AMA group policy, you buy that policy/benefit and at claim time they determine how much benefit you are eligible for out of what you bought. Yes, you heard that correctly you can be buying a benefit that they don't have to pay you for. Most individual policies (from the big 6) are on the hook for the benefit you bought regardless of what your income was at the time of claim.

 

[nimbus]

It depends on the carrier and if that carrier is doing financial underwriting at claim time vs. at application time. An example would be the AMA group policy, you buy that policy/benefit and at claim time they determine how much benefit you are eligible for out of what you bought. Yes, you heard that correctly you can be buying a benefit that they don't have to pay you for. Most individual policies (from the big 6) are on the hook for the benefit you bought regardless of what your income was at the time of claim.

Which companies are the big 6?

 

[MD Financial Services Scott]

That sounds excellent, I didn’t get a quote from northw

Anyone out here have a Northwestern Mutual policy? Recently was quoted policies with all of the riders, occupation specific, etc, and they have policies that essentially start low ($366/mo for $15k coverage), but rise by year with dividend payout. Overall policy costs are similar, but I hadn't seen this structure before.

Anyone out here have a Northwestern Mutual policy? Recently was quoted policies with all of the riders, occupation specific, etc, and they have policies that essentially start low ($366/mo for $15k coverage), but rise by year with dividend payout. Overall policy costs are similar, but I hadn't seen this structure before.

Which companies are the big 6?

Ameritas, Guardian, Principal, Ohio National, Mass Mutual and Standard. Those are also the only carriers with a True Own Specialty definition of disability being manufactured in the US right now and for the last 20 years or so (the exception is MetLife but they quit selling coverage about 5 years ago).

 

[MD Financial Services Scott]

Anyone out here have a Northwestern Mutual policy? Recently was quoted policies with all of the riders, occupation specific, etc, and they have policies that essentially start low ($366/mo for $15k coverage), but rise by year with dividend payout. Overall policy costs are similar, but I hadn't seen this structure before.

Be careful, the rise of premiums can quickly overtake level premium contracts, ask them to show you what their level premium contract would be. In addition, you mention Occupation Specific definitions but really drill into that. What they say is if you can't do your specialty then full benefits are paid. Be sure to ask the next question of if you go work in another occupation and earn equal amount of money as you were earning what is your payment (answers is $0). That definition is a glorified Own Occupation and Not Working definition that they have dressed up and got trademarked to make it look fancy. The easy way to figure this out is to ask their claim department, what happens if I choose to work in Any Occupation post disability. Answer is % of income lost is % of benefit to be paid, if no loss then no payment. Depending on age most of the time residents/fellows and those just finishing are about $100- 120 per month per $5k of benefit on a Level Premium, best definition contract. Certainly age, gender, state of residency and health can adjust that but my point is that at $366 for $15k from NWM is not out of line but with them that is for the 3rd best definition and an increasing premium, when you take that into account I would suggest looking around.

 

[BLADEMDA]

Be careful, the rise of premiums can quickly overtake level premium contracts, ask them to show you what their level premium contract would be. In addition, you mention Occupation Specific definitions but really drill into that. What they say is if you can't do your specialty then full benefits are paid. Be sure to ask the next question of if you go work in another occupation and earn equal amount of money as you were earning what is your payment (answers is $0). That definition is a glorified Own Occupation and Not Working definition that they have dressed up and got trademarked to make it look fancy. The easy way to figure this out is to ask their claim department, what happens if I choose to work in Any Occupation post disability. Answer is % of income lost is % of benefit to be paid, if no loss then no payment. Depending on age most of the time residents/fellows and those just finishing are about $100- 120 per month per $5k of benefit on a Level Premium, best definition contract. Certainly age, gender, state of residency and health can adjust that but my point is that at $366 for $15k from NWM is not out of line but with them that is for the 3rd best definition and an increasing premium, when you take that into account I would suggest looking around.

I also think you need to mention that most of the Big 6 subtract your social security disability insurance from the payout. Here is an example, Let's say the company and you agree on 100% disability. Your policy is $10,000 per month minus the SS of $3500 leaving you $6500. I had a colleague work out a deal with a big 6 insurance company on 50% disability. I don't know the specifics but his lawyer and the company agreed on that number. He got 1/2 of $10,000 or $5,000 minus $3000 (SS) for a total of $2,000 per month until age 65.

 

[MD Financial Services Scott]

I also think you need to mention that most of the Big 6 subtract your social security disability insurance from the payout. Here is an example, Let's say the company and you agree on 100% disability. Your policy is $10,000 per month minus the SS of $3500 leaving you $6500. I had a colleague work out a deal with a big 6 insurance company on 50% disability. I don't know the specifics but his lawyer and the company agreed on that number. He got 1/2 of $10,000 or $5,000 minus $3000 (SS) for a total of $2,000 per month until age 65.

That is not true that the benefit is reduced by SSDI unless you, the client, add what is called a SSDI rider to the policy so that it reduces your premium due to the offset against benefit from social security disability. Even when you do that the SSDI rider is capped at the amount you want reduced. Now 99% of all the group plans/employer plans have that reduction built in so not a surprise there but you almost never see an individual contract with that attached. I don't know anyone that recommends that or that buys that because at the end of the day if one buys an individual policy they should get their benefit bought, they are also paying, through taxes, SSDI as well and thus should get that. Sorry your buddy had a contract built like that is extremely rare to see those in this space.

 

[BLADEMDA]

That is not true that the benefit is reduced by SSDI unless you, the client, add what is called a SSDI rider to the policy so that it reduces your premium due to the offset against benefit from social security disability. Even when you do that the SSDI rider is capped at the amount you want reduced. Now 99% of all the group plans/employer plans have that reduction built in so not a surprise there but you almost never see an individual contract with that attached. I don't know anyone that recommends that or that buys that because at the end of the day if one buys an individual policy they should get their benefit bought, they are also paying, through taxes, SSDI as well and thus should get that. Sorry your buddy had a contract built like that is extremely rare to see those in this space.

Thanks. I defer to you as these contracts are very complicated. I didn't see anything like that in my policy either but these companies are always trying to screw you over.