How much money have you spent/received on disability/life insurance?

[VA Hopeful Dr]

Insurance is the lotto ticket you hope never wins. You have it just in case life doesn’t go your way. FYI, the odds of becoming disabled are far greater than the odds of winning the lotto.

Its almost like that's the definition of insurance...

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[sethco]

Make sure you read the policy and not the sales brochure....
The AMA policy has a 'Total and Continuous' clause in the elimination period vs. loss of 15% of income (far from total or continuous)
It is not an Own Specialty definition as it implies, it is an own occ not engaged definition
They can change the language in your policy anytime they want
They can change the rate anytime they want
You have a 30%+/- rate hike every 5th year ending in 0 or 5.

That makes sense. That rate sounded almost too good to be true. I would try to shoot for a monthly benefit to monthly premium ratio of >30:1 (I.e. 50 premium for 5k benefit). That quote above would be >100:1 which would be ridiculously good value

 

[Mman]

25+ years working as a physician, saving prudently, paying off mortgages early, saving for kid's college. But a $1mil policy is the deciding factor in whether your surviving family will suffer financially?

nobody is arguing that if you die in the last year of a term life insurance it was a good purchase. But if you are 30 and buy a 30 year term life insurance it is certainly worth it if you die at 35 or 40 or 45 or even 50. But that's also why Blade mentions staggering and maybe you buy a bigger 10 or 20 year plan and then a smaller 20 or 30 year plan. That way if you die in the first 10 years you get a much bigger payout when it would be more useful and a much smaller payout if you die 25 or 30 years later.

If you are certain you won't die in the next 30 years, you should never buy life insurance. If you are certain you won't die until you have already amassed a fortune, then you should not buy life insurance. If there is a chance you might die before you and your family are set financially, then you should consider purchasing life insurance. If you are young and healthy the cost is so low as to not be significant. I mean it's not like you will retire 5 years earlier by not spending the money on the term life policy.

 

[BLADEMDA]

Term life insurance is dirt cheap. Even a resident who is young and healthy can afford a $500k term life policy.

But, if you decide to buy an extra $1 mil of term life later in your career as I did you may find the cost significantly higher. That’s why I recommend to buy term life post residency. It’s cheap and companies offer 30 year term.
Buy a 20 year term and a 30 year term policy. That’s all the life insurance you will ever need

 

[jope]

Echoing others, disability insurance seems useless until you need it. I have personally known or heard about three attendings that have required throughout residency and fellowship that required their disability insurance.

1) Anesthesiologist in their 40s that was into boxing/MMA and suffered traumatic eye damage.
2) ER attending that was also in their 40s skiing and fell into a tree well and becoming a partial quadriplegic.
3) Anesthesiologist in early 50s with young family that was biking on vacation in the US and suffered TBI after a hit and run. Was deemed not fit to return to practice due to concentration and other cognitive issues.

 

[dchz]

While it may seem that way, it is quite unlikely to be that way. Why? Competition in the market. If one company had such a massive profit margin on the product, others would undercut them. Rinse and repeat until the profit margin for that product is basically the same as any other insurance product.

Unless you think there is some massive collusion in that industry that does not impact other insurance products.

Where do your disability insurance premiums go?

insurance fraudsters
insurance company payroll
executive bonuses
company real estate and investments
stock holders

@Mman we are talking about two different things.

The cost of providing the service is only a cost side analysis. It says nothing about the value to you as the consumer of the insurance.

Just because they don't make a profit doesn't mean it is worth it to the consumer. The profit for them could very well be low, because included in their cost are fixed costs of staff, legal counsel, office space, paying some guy to come to SDN to sale to the nerds directly. None of that says anything about what the product is worth for you.

The value to you is simply that it will pay you a certain amount if an event occurs. So when I said in my quote that I feel the insurance is overpriced. I should specify that it is overpriced to me because the money I pay for it is not worth the benefit to me.

I am not saying the market price for insurance is too high and there will be a price adjustment because of a bubble.

A couple more salient points:
-The assumptions of a perfect market does not hold in this space. There is plenty of information arbitrage. No one knows what the actual occurrence of disability is....
-There is a huge barrier to entry for new firms looking to compete. And if the barrier to entry is large enough. The market won't adjust or be near perfect.

Finally, why I think this is too expensive: if I think I have less than .01% chance of cashing on this and I have to pay like $2k a year. When it's worth $500 a year for the payout and then $500 a year worth of peace of mind. The value to me is $1k. But I have to pay $2k to get it. Then it's overpriced to me.

 

[pjl]

Echoing others, disability insurance seems useless until you need it. I have personally known or heard about three attendings that have required throughout residency and fellowship that required their disability insurance.

1) Anesthesiologist in their 40s that was into boxing/MMA and suffered traumatic eye damage.
2) ER attending that was also in their 40s skiing and fell into a tree well and becoming a partial quadriplegic.
3) Anesthesiologist in early 50s with young family that was biking on vacation in the US and suffered TBI after a hit and run. Was deemed not fit to return to practice due to concentration and other cognitive issues.

I personally have worked with 4 physicians who claimed disability out of a group of 200.
1 random stroke in early 50s
1 c spine issues that caused arm weakness mid 50s
1 MVC 40s
1 “chronic fatigue” or something else that certainly didn’t sound very real. I think he was mid 40s when he started milking that.

I have a lot of disability insurance. I don’t mind paying the premiums, even knowing I likely won’t get to use them. To me, knowing that I will be able to afford whatever accommodations I need due to disability, while still maintaining a similar lifestyle has been worth it. Now that I have some “other” money and income I may drop one policy in a few years.

I had 20 and 30 year after residency, with plans to drop the 20 once I had some money for family. Now I have home, kids college, and FU account funded. I’m keeping the rest of the 20 because it is just so cheap, and I’m perfectly fine paying it so my wife can have a giant party and kids can each buy a modest home if I die early.

 

[Mman]

Finally, why I think this is too expensive: if I think I have less than .01% chance of cashing on this and I have to pay like $2k a year. When it's worth $500 a year for the payout and then $500 a year worth of peace of mind. The value to me is $1k. But I have to pay $2k to get it. Then it's overpriced to me.

It is extremely difficult for you (or me or anybody else that isn't an actuary) to accurately estimate their chances of needing to file a claim for a disability. If you think the odds are less than .01%, you are probably not even remotely close on your guess and being a little off greatly impacts how the math works. I mean I'm pretty sure the odds for your average anesthesiologist are less than 10%, but I'm also pretty sure it's > 1% but I can't even come close to figuring out where in that range it would actually be.

Do insurance companies make a profit from the product? Of course. That's the point. But insurance is the only thing you ever buy (at least I think) that you hope to lose money on. To me it's all about looking at the cost and how much that money means to you and what you would otherwise do with it and then measure that against the risk of lost income and what that would mean to you.

Nobody has to buy the products, but I would say that is a discussion that should be heavily involved with a spouse or significant other.

(and once you have FU money, many of your insurance needs disappear or greatly decrease)

 

[IlDestriero]

My own occ disability insurance is only about $10k/year. Though I only have 10000/month payout. Post tax paid, is untaxed pay out. With what I already have, a spouse that works and could continue to earn 6 figures, SSDI, etc. that’s more than enough to live well. I also have non own occ through work at the moment which pays more initially, but it’s not a great plan so my situation is more complicated.
I tried to convince them to cover less, but own occ, but they looked into it and didn’t change. I’d rather have 10k own occ than 20k of some hybrid plan.
I would guess many physicians are either very underinsured or very overinsured. You don’t need to continue to live in a big house in the best suburb with a beach and/or mountain house and a stable of german cars in the garages when you’re significantly disabled to still live very well, pay for college, etc. You can live in my 10/10 school district suburban neighborhood for ~$600k, 1.2, 2.4, 4.8, up to about $50m. They all have some bedrooms, baths and some kind of yard. Downsize your life as needed. Just like retirement. Investments pay out really well, great go get your SoCal/Miami ocean front mansion, or maybe just ocean view, or maybe a townhouse, or a condo, or a swamp front cottage with an outhouse in Alabama.

 

[Mman]

You don’t need to continue to live in a big house in the best suburb with a beach and/or mountain house and a stable of german cars in the garages when you’re significantly disabled to still live very well, pay for college, etc. You can live in my 10/10 school district suburban neighborhood for ~$600k, 1.2, 2.4, 4.8, up to about $50m. They all have some bedrooms, baths and some kind of yard. Downsize your life as needed. Just like retirement. Investments pay out really well, great go get your SoCal/Miami ocean front mansion, or maybe just ocean view, or maybe a townhouse, or a condo, or a swamp front cottage with an outhouse in Alabama.

I agree that lifestyle can always downsize, however depending on the disability you could have a lot of other new expenses to cover like remodeling a house to make it wheelchair friendly or needing extra home help.

 

[MD Financial Services Scott]

That makes sense. That rate sounded almost too good to be true. I would try to shoot for a monthly benefit to monthly premium ratio of >30:1 (I.e. 50 premium for 5k benefit). That quote above would be >100:1 which would be ridiculously good value

If you are about 30-34 then you can get around $20 per month per $1k so around that 50:1 ratio of benefit to premium, if you are 35-40 then the rates are probably $25-$30 per month and 40 to 45 they are going to be pushing $40 per month. Of course there are many ways to keep the costs down so when people tell me they are paying $500 per month it is usually pretty easy to see where once save a few dollars.

 

[pgg]

I'm trying to figure out how much money the insurance companies make off of doctors.

Personally, I've never heard of docs ever having to use it over their entire careers.

$2000/month is what I hear people pay for same specialty coverage, kicks in at 6 months of disability, no maximums.

$2000/month, over 30 years = $720,000.

Invested at 6%, it would be worth $2,000,000 after 30 years.

At what age do people stop paying their premiums?


As a correlary, do people still buy life insurance? What percentage of young docs ever have to use it? 0.001%?

First, as noted elsewhere, $2K/month is an absolutely absurdly ridiculous disability premium. No one pays that.

Second, unless you're an idiot living waaaay beyond your means, not saving or investing anything, your need for DI dramatically decreases later in your career. An injury early in your career is a catastrophe; therefore DI is important. An injury late in your career is an earlier-than-expected retirement with a lower-than-expected standard of living ... not fun, but not a catastrophe. DI is less important then.

Third, nobody pays for DI for 30 years. There's no point in paying premiums on a policy when you're 60, if that policy won't pay anything past 65.


I've known two anesthesiologist who collected on their own-occ DI policies. One with a career-ending injury, and one with a career-ending medical condition.

I pay my DI premiums the same way I pay my umbrella premiums, hoping that all that ever happens is some agent makes some money off me.

I have term life insurance, but less than I used to now that we have a nicely positive net worth, and all 3 kids are grown (2 in college still but their tuition & housing is paid for). The point of term life insurance ought to be obvious. If you don't need it, don't pay for it.

I'll quit paying for DI the minute I am financially able to retire completely.

I'll never quit paying for umbrella insurance, auto insurance, homeowners, etc.

Agents will always try to sell more than you need. That doesn't necessarily mean you need none.

 

[deleted899865]

I have a $4250 / month Guardian policy from residency (now fellow). My premium is graded but at $105/month right now - 2 years in. I feel like this is a lot... But it includes all the riders (Cost of living increase, future increase option, inflation etc etc). I had a fiduciary look at it and told me not to change (he wasn't the one who sold me the policy and I would have bought a new policy with him so I trusted him)

 

[Shimmy8]

Would like some opinions:

I'm 33, two years out of residency. Single, no kids. Very healthy, work out 5-6x/week, no smoking.

$260k debt, aggressively paying off, hopefully done within 5 years.

Salary base $345k, will be at $360k in 2 years, though I work a lot of extra/OT to pick up cash.

My group has a disability policy that is free to me, pays 40% of salary with cap of $15k/month.

We also have a group life policy that is $450k, again free to me as employee.

I currently have zero supplemental insurance. With this thread, I've started shopping around, and it seems that at age 35 the premiums go up. Thoughts on what/if I should get supplemental in the next year?

 

[DM27]

I am in a position fairly similar to you except married (wife is a physician, but in training) and without the debt. I have the following policies which I would divide into income protection and wealth protection:

Income Protection:
10k/month Disability (Premiums ~ $400s/month)
750k term life policy (Premiums ~$60/month)
Total insurance burden from premiums/year: ~$5900

Wealth Protection:
Liability portion of auto insurance: 500k
Liability portion of Renters/Homeowners: 500k
Umbrella Policy: 1million
Total Insurance Burden from premiums/year: ~$1000

I chose these from the combination of a fair amount of reading, and consulting co-residents who seemed to be fairly level-headed in their financial decisions.

I save around 175k a year so my insurance burden is around 4% which I consider acceptable, my goal was to really scrutinize any insurance costs if it exceeds 5%.

You pay more for your income protection policy premiums as you age, but it takes awhile for these increased amounts to ever exceed what you save in premiums each year you do NOT have a policy. The larger reason to get a policy sooner if you're going to is that your overall resiliency is going to decrease as time goes on (as in bouncing back from minor injuries/illnesses), you're getting older so you could gain a diagnosis that disqualifies you from a policy or heavily weights your premium, and also since your debt burden is higher, you really need the income protection much more than someone who has either no debt or is already approaching financial independence.

 

[BLADEMDA]

Would like some opinions:

I'm 33, two years out of residency. Single, no kids. Very healthy, work out 5-6x/week, no smoking.

$260k debt, aggressively paying off, hopefully done within 5 years.

Salary base $345k, will be at $360k in 2 years, though I work a lot of extra/OT to pick up cash.

My group has a disability policy that is free to me, pays 40% of salary with cap of $15k/month.

We also have a group life policy that is $450k, again free to me as employee.

I currently have zero supplemental insurance. With this thread, I've started shopping around, and it seems that at age 35 the premiums go up. Thoughts on what/if I should get supplemental in the next year?

I’m not sure you need to buy anything. Are you planning on staying with your current position? Can the disability policy go with you if you leave your current position?

I would advise buying a level term. 20 or 30 policy for $500k but you aren’t married. No kids. So, you don’t really need additional life insurance yet.

If you leave the group does the life insurance policy go with you?

 

[NITRAS]

Would like some opinions:

I'm 33, two years out of residency. Single, no kids. Very healthy, work out 5-6x/week, no smoking.

$260k debt, aggressively paying off, hopefully done within 5 years.

Salary base $345k, will be at $360k in 2 years, though I work a lot of extra/OT to pick up cash.

My group has a disability policy that is free to me, pays 40% of salary with cap of $15k/month.

We also have a group life policy that is $450k, again free to me as employee.

I currently have zero supplemental insurance. With this thread, I've started shopping around, and it seems that at age 35 the premiums go up. Thoughts on what/if I should get supplemental in the next year?

You should get supplemental LTDI. You don’t need life insurance until you have dependents.

Your lifestyle sounds like easily $20/month and you’ve probably got coverage of $10k at best.

 

[bigdan]

Shimmy -

Almost assuredly, that employer-sponsored disability policy is for total disability, and will have taxes taken out if (God forbid) you ever get payout on it.

I tell my residents (at least those that ask) the following:
1. There are “insurance people” (those that see value in insurance, or at least aren’t deeply offended by paying for it) and “not insurance people”. If you are of the latter group, nothing else matters regarding what I say, because I can’t convince you.
2. The typical residency grad is worth more dead than alive (presuming some sort of debt and employer provided life insurance, however meager that is). While the hotshot CA3 thinks of himself as an Ace, fact of the matter is that your financial worth is in POTENTIAL...you can potentially make good coin for many years. But you haven’t made sh@t yet. Again, if you’re not an “insurance believer”, this won’t matter to you, but it’s insane to me (insurance believer) that some folks are cool with investing 4 yrs undergrad + 4 yrs med school + 4 yrs Anes residency, but won’t pay to protect themselves with DI - at least until debt is paid off. Don’t forget: you die, education debt is discharged. You live in a Medicaid-funded SNF in your sip & puff wheelchair, enjoying the finest tube feeds: you still owe monthly.
3. You’re the youngest you’ll ever be RIGHT NOW. You can always cancel the policy if you somehow think it’s a mistake to have purchased one. I’d buy something basic, with (true) own occupation coverage, COLA, and rider for future benefit increase as soon as you can. Even $4,000/mo. Or $3k. Or $2k. Get your foot in the door. You can afford it.

MH is rare, and most of us will go our careers without seeing it. But I’m glad I know where the Dantrolene is, just in case. Why not cover yourself - at least until clear of debt - just in case?

 

[okayplayer]

You guys would do well to heed the advice from @bigdan

 

[Shimmy8]

Appreciate it, guys. Going to shop around for something in next few months. I'm sure there's more folks lurking in my situation, I'll report back.

Despite its original intent, this thread has been incredibly helpful.

 

[pjl]

My work has a fantastic disability plan. It is post tax, and equal or better than my personal policy, at ~40% the cost. Make sure you look into that.

 

[BLADEMDA]

I’ve seen MH twice in my career already. I have seen physicians die due to cancer, accidents, etc well before their prime.

I’ve met physicians on disability. Most were non work related accidents.

**** happens. Prepare for it. That’s the real world and life in general.

 

[IlDestriero]

Would like some opinions:

I'm 33, two years out of residency. Single, no kids. Very healthy, work out 5-6x/week, no smoking.

$260k debt, aggressively paying off, hopefully done within 5 years.

Salary base $345k, will be at $360k in 2 years, though I work a lot of extra/OT to pick up cash.

My group has a disability policy that is free to me, pays 40% of salary with cap of $15k/month.

We also have a group life policy that is $450k, again free to me as employee.

I currently have zero supplemental insurance. With this thread, I've started shopping around, and it seems that at age 35 the premiums go up. Thoughts on what/if I should get supplemental in the next year?

You don’t need additional term life insurance now, but like own occ disability insurance, something could happen to you that makes you a high risk and/or uninsurable. You can lock in low rates now. Do you plan to settle down and have a family? That changes the calculus. If not, you may never need more life insurance.
I know one surgeon who waited to get disability insurance because he was youngish and healthy. Now he’s uninsurable and only has a crappy group disability policy, and he has a potentially disabling condition. Not a good feeling. He’s saving like his life depends on it, because it does.
For me, it’s painful to write the annual checks, but it’s worth it.

 

[facted]

Just would like to add one thing: don't care if you get life or disability. But PLEASE, don't bother me with your GoFundMe if you didn't. People not getting insurance is why GoFundMe exists when there's a tragic turn of events.

 

[jqueb29]

Disability insurance is always an expensive waste of money, up until the day that it it's not.

 

[chessknt]

I think you are conflating a product with an investment. You don't think of money spent on a service as money lost on investing if you value that service. It is like paying an electric bill except the tangible benefit is one you hope to never use. Obviously once you reach FI you no longer need the service and stop paying for it but there is really no point in imagining how much more money you could have had by investing it instead unless you think that every time you spend money on anything.

 

[rakotomazoto]

Personally, I've never heard of docs ever having to use it over their entire careers.

Personally, I know a few people who ended up using their policy, one was a girl who had only been out of training for a year or two. You can better believe that she is stoked she paid those monthly premiums, she has been collecting checks for years now. Another was a guy in his 50's, received benefits for about 6 months, had surgery, rehab, and then returned to work. Sure, the majority will never touch it, but the risk is not zero.

 

[BigRedBeta]

Haven't heard of any doctors, but have a close family friend who is an attorney that suffered a TBI and has lingering symptoms tantamount to severe post-concussive syndrome. Certainly can't be lawyering with what's going on. Now on long term disability at ~70% of their income. Is in intensive day rehab and the costs are eating up a bunch of the disability income, and they are having to downsize their lifestyle a fair degree. If they didn't have the long term disability they would be in a world of hurt.

Definitely spooked me enough to update my policies.

 

[IlDestriero]

Personally, I know a few people who ended up using their policy, one was a girl who had only been out of training for a year or two. You can better believe that she is stoked she paid those monthly premiums, she has been collecting checks for years now. Another was a guy in his 50's, received benefits for about 6 months, had surgery, rehab, and then returned to work. Sure, the majority will never touch it, but the risk is not zero.

Two of my partners went out long term and collected disability for years. One with cancer and one with chronic pain, failed back, etc. Another 2 have significant nerve injuries that threaten their ability to continue to work. Also, one Navy guy was deployed at the worst place at the worst time. He saw 9 months of an endless line of healthy kids going home in body bags, missing limbs, traumatic brain injuries, etc. IED after IED. He came back with catastrophic PTSD and was a different person. After a couple more years he couldn’t work at all. This isn’t roll the dice 1 in 1 million insurance. I believe the statistics say that you’re >10 times more likely to use disability insurance than life insurance during your working life.
I pay a lot for own occ disability and I think it’s totally worth it. If you’re financially independent and can spend $20k+ a month indefinitely on medical care, supporting your family at a high enough standard, etc. than good for you and I guess you don’t need it. I suppose when I’m closer to my retirement goal that math may be different because if it all goes south I could be fine retiring several years early without much lifestyle change.
My n=1 is 3 former colleagues out long term. One at about 40, one at about 50 and one 60, and 2 more that I know about with significant career threatening injuries that are currently stable.
I write the check with a smile and sleep well.

 

[psychapp121]

OP you are correct..in terms of math and statistics one would be a fool to buy insurance..after all the insurance companies are making billions selling us insurance..but people are emotional creatures and doctors and not very business savvy/very risk averse so a lot of people here like insurance

 

[BLADEMDA]

OP you are correct..in terms of math and statistics one would be a fool to buy insurance..after all the insurance companies are making billions selling us insurance..but people are emotional creatures and doctors and not very business savvy/very risk averse so a lot of people here like insurance

You are confused as to the value of insurance vs the cost. You can argue the cost of disability insurance is too high vs the payouts but the value of the policy is still there.

 

[Mman]

OP you are correct..in terms of math and statistics one would be a fool to buy insurance..after all the insurance companies are making billions selling us insurance..but people are emotional creatures and doctors and not very business savvy/very risk averse so a lot of people here like insurance

by that logic you would be a fool to ever buy anything since somebody is making a profit off your purchase.

The point of insurance is minimizing your worst possible outcome. As blade points out, it is clearly a valuable product the only question is price and since the market is competitive you should be able to shop around and get a reasonable price.

 

[Mikkel]

by that logic you would be a fool to ever buy anything since somebody is making a profit off your purchase.

The point of insurance is minimizing your worst possible outcome. As blade points out, it is clearly a valuable product the only question is price and since the market is competitive you should be able to shop around and get a reasonable price.

I've been investing my "disability insurance" premiums for the last 15+ years in the market in growth stocks, and it's worth about $800k right now. I feel like that's plenty to live off of while figuring out what to do if permanently disabled.

Best part is that these stocks will continue to grow, and if I never have to touch it in the next 15 years, it'll be a nice addition to my other retirement accounts.

 

[VA Hopeful Dr]

I've been investing my "disability insurance" premiums for the last 15+ years in the market in growth stocks, and it's worth about $800k right now. I feel like that's plenty to live off of while figuring out what to do if permanently disabled.

Best part is that these stocks will continue to grow, and if I never have to touch it in the next 15 years, it'll be a nice addition to my other retirement accounts.

Using the 4% rule, that's 32k/year. We can even be more generous and bump that to 6% since disability insurance doesn't pay out your whole life and we want to compare fairly. So now we're at 48k/year.

Most doctors I know are insured for at least 10-15k/month (120k-180k/year).

Let's say you get disabled at 50 and are getting 10k/month. Most disability plans are good to age 65. That disability policy is worth 1.8 million.

So yes, if you never get disabled your plan will work out better in the long run. And as most everyone in this thread has pointed out, after a certain age if you've been saving well it doesn't pay off either.

But what if you get disabled at 38? Very few doctors can live off of savings at that point.

Also, even accounting for a good market, how much do you think you'd have had to pay in disability premiums to end up with 800k be investing those? I'm insured for an even 10k and only pay around 4k/year in premiums.

 

[Wkrdoc]

Not many end up on claim for very long, that is why I am not a fan of COLA, it takes about 12-14 years On claim for that to be a better option than just buying more coverage day one for our clients.

im paying 700/mo for 17800/mo coverage. Is that too much?

 

[chocomorsel]

im paying 700/mo for 17800/mo coverage. Is that too much?

Well, do you think you need that much money to live? The price is fair. But the 17k to me is too much. But only you know how you live.

 

[okayplayer]

I've been investing my "disability insurance" premiums for the last 15+ years in the market in growth stocks, and it's worth about $800k right now. I feel like that's plenty to live off of while figuring out what to do if permanently disabled.

My disability premiums are $4,000/yr. Even at a very unrealistic 8% per year I’m not seeing this....

 

[Mman]

I've been investing my "disability insurance" premiums for the last 15+ years in the market in growth stocks, and it's worth about $800k right now. I feel like that's plenty to live off of while figuring out what to do if permanently disabled.

Best part is that these stocks will continue to grow, and if I never have to touch it in the next 15 years, it'll be a nice addition to my other retirement accounts.

you can feel fortunate you did not get disabled 10 years ago. Unfortunately not everyone will have that outcome.

 

[pgg]

I've been investing my "disability insurance" premiums for the last 15+ years in the market in growth stocks, and it's worth about $800k right now. I feel like that's plenty to live off of while figuring out what to do if permanently disabled.

Best part is that these stocks will continue to grow, and if I never have to touch it in the next 15 years, it'll be a nice addition to my other retirement accounts.

Come on, man, why are you just making up these numbers?

If you took your disability insurance premiums and invested them 100% in the stock market, you'd need to have invested $50K/year since 2005. No one is paying $50K/year for disability insurance.

$50,000​	Annual DI Premium
YEAR	S&P 500 Return	VALUE
2005​	3​	$51,500​
2006​	13.62​	$108,310​
2007​	3.53​	$160,075​
2008​	-38.49​	$190,830​
2009​	23.45​	$252,555​
2010​	12.78​	$308,945​
2011​	0​	$358,945​
2012​	13.41​	$415,650​
2013​	29.6​	$480,450​
2014​	11.39​	$536,145​
2015​	-0.73​	$585,780​
2016​	9.54​	$640,550​
2017​	19.42​	$700,260​
2018​	-6.24​	$747,140​
2019​	28.88​	$811,580​

 

[pgg]

Besides, a year or two ago weren't you telling us you were investing in silver?


Edit - not you, my mistake; undeserved dig, my apologies

 

[Mman]

Besides, a year or two ago weren't you telling us you were investing in silver?

that was @Matty44

 

[MD Financial Services Scott]

im paying 700/mo for 17800/mo coverage. Is that too much?

It depends on your age, gender, state of residency, specialty and benefit design. If you want to PM I can check market rates for you.

 

[Wkrdoc]

Well, do you think you need that much money to live? The price is fair. But the 17k to me is too much. But only you know how you live.

Im a baller

 

[Mikkel]

Come on, man, why are you just making up these numbers?

If you took your disability insurance premiums and invested them 100% in the stock market, you'd need to have invested $50K/year since 2005. No one is paying $50K/year for disability insurance.

$50,000​	Annual DI Premium
YEAR	S&P 500 Return	VALUE
2005​	3​	$51,500​
2006​	13.62​	$108,310​
2007​	3.53​	$160,075​
2008​	-38.49​	$190,830​
2009​	23.45​	$252,555​
2010​	12.78​	$308,945​
2011​	0​	$358,945​
2012​	13.41​	$415,650​
2013​	29.6​	$480,450​
2014​	11.39​	$536,145​
2015​	-0.73​	$585,780​
2016​	9.54​	$640,550​
2017​	19.42​	$700,260​
2018​	-6.24​	$747,140​
2019​	28.88​	$811,580​

Growth stocks, not S&P index.

AAPL, NVDA, GOOG.

And getting extremely lucky with a few small pharmaceutical companies (NKTR for example).

High risk (to me) is hoping you get disabled so you can cash in on your disability insurance.

High risk (to you) is making big bets on unproven companies (like NKTR), but big bets can pay off big.

It's gambling either way, and I'd rather gamble in the stock market.

 

[NITRAS]

Disability insurance isn’t an investment. It is insurance.
It’s not gambling. It is insurance.
All insurance is a net negative.
If you can’t self insure the risk, then you should look at insurance. (PS most people can’t self insure the risk of dying or getting disabled).

 

[BLADEMDA]

There was a young Anesthesiologist on SDN about 10 years ago. He was doing very well in Texas. By all measures he was well off with a nice life and good marriage. He too thought he was invincible. Then he found out about his stage 4 Lung cancer. He was dead within months.

He left his wife without any life insurance. He regretted that BAD decision on SDN.

We insure the ones we love not ourselves. It is an investment in others to protect them. For you personally it is a net loss no matter the outcome.
But, I value my family and see the extra few million as a plus for them.

Disability insurance protects the entire family. It isn't just about you.

I am FI already but still carry life and disability because they aren't very expensive and provide my family even more financial security. I also donate money to good causes because I think it is the right thing to do. That is another "net negative" for me.

But, this world we live in isn't just about you or me.

 

[IMGASMD]

I pay about 6300 a year.
2 Mil 20 year term
12,000 own speciality/? Unlimited Mental health

I don’t care for life insurance. But like Blake said, it’s not really for me. If I drop dead tomorrow, there is some money for my family to live off of. Certainly I don’t want to drop dead tomorrow.

Don’t think I have anywhere close to 2 Mil for my fam at this time, or ever.....

 

[BLADEMDA]

I have about $750K of term/whole life. The term portion is $500K with a cost of $650 per year. That is on the high side but due to my age and health I am happy paying $650 per year. I also have whole life from a top rated company (this is a "C" grade investment so can't recommend).

My disability policy is own occupation specific which I pay about $250 per month. The benefit is roughly $175,000 per year if I get disabled. I don't really need the policy a this point but will keep it for at least a few more years. I feel comfortable knowing that amount of income is more than enough when combined with my assets. But, as I get older the value of the policy diminishes as I doubt the company will pay out past age 65. So, I'll just keep this a few more years.

There was a time where my disability policy would have paid out over $300,000 per year but as I gained FI I no longer needed that much coverage. Logically, I am at the age where I should just cancel this policy but like I have posted I will give it a few more years.

I highly recommend you get quotes on insurance for your family and loved ones. The cost of insurance is cheap at a young age and disability will protect your family against loss of income due to an accident or prolonged illness.

If you get the right agent then competitive bids will be obtained from multiple companies. If you are still wary get a second agent to make sure the first one is being honest.

Again, Insurance isn't just about you. It is part of true financial planning for the entire family.

 

[BLADEMDA]

MD Financial Services - Houston, Texas - Disability income insurance and investment strategies

MD Financial Services - Houston, Texas - A full-service financial firm helping physicians with disability income insurance and investment strategies.

www.mdfinancialservices.com

I have never met this person. I do not get a referral fee. But, if I was a new graduate I would get a quote from him. Why Not? Ask him for quotes from multiple companies. Again, if you don't trust him get a second agent for quotes.

Disability- COA rider? - The White Coat Investor Forum - Investing & Personal Finance for Doctors

Hi, I'm a long time peruser, first time poster. Basics: 37, married, no kids yet; wife with stable job, her income provides about 20% of our net Employed hospital practice 403b x 2 maxed, 457 maxed, backdoor roth, rest taxable 2 years left in PSLF $3M umbrella insurance is in place I currently...

www.whitecoatinvestor.com

 

[BLADEMDA]

Insurance Agents for Physicians | White Coat Investor

www.whitecoatinvestor.com

The link above has list of agents for you to contact. I have no firsthand knowledge about any of them but I am willing to bet any of them is better than the agents I used decades ago.