Question about disability insurance amount

[BW15]

I was wondering what every ones opinion is about how much disability insurance to get before starting as an attending. I searched the forum and saw only a few posts with actual numbers. Right now I'm thinking about 10-12K if I can get it, but wanted to see what every one elses thoughts were.

Also, what are your thoughts about the riders?
1. Cost of living rider: $25-40/month extra, I'm not sure I need this.
2. Future increase option (up to 20-30K): about $30-60/month extra, I don't think I'll increase my amount more than 12K as it starts to get really pricey, so not sure this is worth it either.
3. 90 vs 180 day waiting periods

How many of you think its a good idea to get life insurance while your young, even if you don't have a family?

Thanks,

BW

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[jwk]

I'm out of date on disability insurance except to say you should have it.

Term life is cheaper the earlier you get it. Some would argue that it's pointless if you don't have a reason to have it i.e. spouse or kids. Happy to be a temporary beneficiary in the interim.

 

[NICMAN]

Life insurance so that you don’t cause your loved ones any financial hardship if you died. $100,000 is probably fairly cheap.

personally I wanted my family to have zero issue if I somehow became disabled. I bought specialty specific $20,000/month policy (two—one paid for by work and a second that I bought). When I am able to self insure around age 55 then I will drop the policies.

 

[pgg]

Term life insurance is dirt cheap. Get it even if you're single and alone in this cruel world, so alone ... because someday you might not be alone and at that point you'll be older and conceivably less insurable.

Disability insurance is needed until you're financially independent. Becoming disabled is a lot more likely than dying. And let's face it, if you get injured badly enough that you can't work, your life has abruptly turned to a world of pain and ****, and the last thing you'll need is to add poverty, default, eviction or loss of your home, etc. No one can give you a number; your lifestyle and needs are your own.


I picked the longest possible exclusion period, because I have a positive net worth and could get by without working for a long time. Also, I have a salaried position with the military that won't get cut off the day after I get injured and can't work. The longer the exclusion period, the lower the premium, but it doesn't get THAT much lower, so I think this is a minor detail. You ought to have a 180+ day emergency fund anyway, so why not take the 180 day exclusion period? (And unless your injury is obvious like a triple amputation it may well take months for the paperwork to be completed to the insurance co's satisfaction in the first place.)

I think the future insurability rider is a little bit of a scam, since as time goes by your net worth will increase and your need for DI will decrease. Also, you'll get closer to age 65 and thus the value of your DI decreases. I think some people overspend on DI by imagining it to be "high-rollin' lifestyle insurance" when it should probably be "not poverty insurance" ... insuring yourself to replace 100% of that MGMA-95% job is missing the point.

COLA rider - I think this is worth it. If you get disabled at 40 you're looking at 25 years of payments. Without adjusting for inflation, the check they write when you're 60 will have half the real value of the one they wrote at 40.

 

[MD Financial Services Scott]

I was wondering what every ones opinion is about how much disability insurance to get before starting as an attending. I searched the forum and saw only a few posts with actual numbers. Right now I'm thinking about 10-12K if I can get it, but wanted to see what every one elses thoughts were.

Also, what are your thoughts about the riders?
1. Cost of living rider: $25-40/month extra, I'm not sure I need this.
2. Future increase option (up to 20-30K): about $30-60/month extra, I don't think I'll increase my amount more than 12K as it starts to get really pricey, so not sure this is worth it either.
3. 90 vs 180 day waiting periods

How many of you think its a good idea to get life insurance while your young, even if you don't have a family?

Thanks,

BW

For my clients we also discuss needs vs. capacity. The theory I follow is buy what you need and acquire options for what you might want.

Cola I am not a fan of it, I think using that money it cost to just buy more coverage will suit you better since it takes about 14 years ON claim before a policy with COLA will have paid out more to a client vs. having just 'up sized' the policy day one.

90 vs. 180, well that kind of depends on the carrier, some carriers it is only an 8% reduction in premium for that 180 day wait vs. other carriers it is as much as 17%. If you policy is worth the $10k then that waiting period of 180 days is exposing you to an extra $30k of lost money for every claim, make sure you are getting a large enough spread on the premium or the risk is not justified.

 

[BW15]

Thanks to everyone who replied, I appreciate the advice.

 

[deleted131481]

I see disability insurance as insuring me against catastrophe. I am able to sustain a 180-day waiting period and will be okay without COLA - so I dropped these in favor of the lower premium.

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