Insurance questions

[dpmd]

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Have been looking at a bunch of different resources, but find SDN is usually a good source for someone saying something I may not have thought of otherwise. I am a new attending living on much less than my current salary, with under 300K of total debt (including my current house mortgage and the mortgage on a rental condo), at present maxing out retirement options (IRA's for spouse and I, plus work plans-something like a 401K but it is a county hospital so it is a little different, and a 457 plan). I have emergency savings which would cover us for more than a few months at current expediture levels (and more if we take out things like vacations and optional purchases). What I don't currently have is life or disability insurance, and I want to make sure I make good choices regarding both.

As for life insurance, my spouse is capable of producing an income that would cover the debt that wouldn't die with me (student loan would go away, but is only 80K of the total), but right now he is in school. We aren't planning on having kids, and no one else is dependent on us (or would foreseeably be). I was thinking of getting a term policy equal to the current debt amount so that he could continue in school if I were to die soon, or in case we later have more debt but I decome ineligible to purchase. Not sure if I really even need this.

I was thinking that short term disability insurance wouldn't be necessary since I could financially bridge the gap before a regular disability policy kicks in with savings (and with credit cards or home equity if for some reason I need more).

For the regular disability policy I am wondering if I should go with a lower dollar amount that matches my current spending (meaning enough for retirement savings, mandatory expenses, and some "fun money"), or if I should assume my tastes may get more expensive, and my mandatory expenses may go up (maybe I will live somewhere more expensive later, or will want more expensive stuff). I can easily afford more coverage, but I hate spending money so want some thoughts from people who aren't so frugal. I could factor in the fact that my husband made enough to support both of us comfortably in the past, but what if I am bad off enough that he needs to stay home with me?

I would appreciate any thoughts or advice.

 

[TexasPhysician]

I max out LT own-occupation disability. If I'm disabled, I want to experience every luxury I can. Best coverage policies for physicians are MetLife and Berkshire Guardian. They are own-occupation, include unlimited psych disabilities, have residual benefits if partially disabled, etc. MetLife is a little more expensive for me, but it allows you to live anywhere in the world - Berkshire restricts you to US.

I've got no debt that my wife and I can't cover. We are both educated. Our families are very supportive. Our life insurance is minimal.

 

[The White Coat Investor]

Have been looking at a bunch of different resources, but find SDN is usually a good source for someone saying something I may not have thought of otherwise. I am a new attending living on much less than my current salary, with under 300K of total debt (including my current house mortgage and the mortgage on a rental condo), at present maxing out retirement options (IRA's for spouse and I, plus work plans-something like a 401K but it is a county hospital so it is a little different, and a 457 plan). I have emergency savings which would cover us for more than a few months at current expediture levels (and more if we take out things like vacations and optional purchases). What I don't currently have is life or disability insurance, and I want to make sure I make good choices regarding both.

As for life insurance, my spouse is capable of producing an income that would cover the debt that wouldn't die with me (student loan would go away, but is only 80K of the total), but right now he is in school. We aren't planning on having kids, and no one else is dependent on us (or would foreseeably be). I was thinking of getting a term policy equal to the current debt amount so that he could continue in school if I were to die soon, or in case we later have more debt but I decome ineligible to purchase. Not sure if I really even need this.

I was thinking that short term disability insurance wouldn't be necessary since I could financially bridge the gap before a regular disability policy kicks in with savings (and with credit cards or home equity if for some reason I need more).

For the regular disability policy I am wondering if I should go with a lower dollar amount that matches my current spending (meaning enough for retirement savings, mandatory expenses, and some "fun money"), or if I should assume my tastes may get more expensive, and my mandatory expenses may go up (maybe I will live somewhere more expensive later, or will want more expensive stuff). I can easily afford more coverage, but I hate spending money so want some thoughts from people who aren't so frugal. I could factor in the fact that my husband made enough to support both of us comfortably in the past, but what if I am bad off enough that he needs to stay home with me?

I would appreciate any thoughts or advice.

It's almost surely a 403B at work. You can put $17K into it and $17K into the 457.

I agree you don't need short term disability.

I think you're a right that a small policy for now is a good idea. A $200-500K 5 year level policy is peanuts. Why don't you guys talk about how much you want in the long term. If you agree it's nothing, then I wouldn't buy any. You are the rare person who may not really need life insurance as a new attending.

I'd go with the "lower" dollar amount in disability that you describe. You guys aren't big spenders. Your husband can earn. And in just a few years you're likely to have a huge nest egg and not even need any disability insurance at all. I wouldn't buy disability insurance "in case you want to spend more later." Every year later you need less and less because your portfolio is growing.

 

[MR Insurance]

Don't forget a Personal Liability policy through your Auto/Home Owners insurance company. Call and ask them for options on a Personal Umbrella policy.

Glad to see that you are considering your retirement savings as a part of your need for LT Disability - that is probably the one thing I see people forget to account for the most often.

 

[Igor4sugry]

Life insurance and Disability insurance for physicians is explained in detail at whitecoatinvestor.com

http://whitecoatinvestor.com/the-five-big-money-items-you-should-do-as-a-resident/

 

[cincincyreds]

Life insurance and Disability insurance for physicians is explained in detail at whitecoatinvestor.com

http://whitecoatinvestor.com/the-five-big-money-items-you-should-do-as-a-resident/

Few things.

1) The only life insurance you should be buying is term, usually a 30 year policy. Probably a 1 million dollar policy is reasonable and should be pretty cheap, maybe 50 bucks a month or even cheaper. FORGET about using whole life and universal life as an investment, it is only life insurance and should be treated that way.

2) You need OWN OCC Disability insurance, because your chance of being disabled is FAR GREATER than dying. What if you get MS, you can still live a full life, but would probably not be able to practice medicine. Metlife and Guardian have good policies. I have Metlife because I can practice in other countries and still be covered.

3) Max out the 401k/403b, backdoor roth ira. The website whitecoatinvestor is a great resource. He is an ER physician who gives great invesment advice for physicians.