Where to Get Disability Insurance?

[prominence]

I am thinking about heading into private practice as a psychiatrist.

Does anyone have any good recommendations on where I can purchase short and long term disability insurance, especially for physicians? I have never needed to consider this option before as hospital employees get this as a benefit where I work.

Thank you in advance.

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[gutonc]

I am thinking about heading into private practice as a psychiatrist.

Does anyone have any good recommendations on where I can purchase short and long term disability insurance, especially for physicians? I have never needed to consider this option before as hospital employees get this as a benefit where I work.

Thank you in advance.

I just had to go through this recently. There are very few companies out there that still offer "own occupation" disability insurance (which is what you need), mostly due to a history of double dipping. Because I also needed life insurance at the same time, I went through a friend who is a New York Life agent. NY Life doesn't offer disability themselves but uses a company called UNUM out of Chattanooga, TN.

Basically, all you need to do is contact a life insurance agent (ask for referrals from new colleagues) and they'll do the rest.

Be prepared to grab your ankles when the quote comes though. I'm still a fellow so my policy is for a benefit of ~$4000 a month (with a rider that it will increase to 4x that at the end of my training period if I become disabled before then) and it cost me ~$2500 a year. I would imagine that a policy with a benefit of $10-20K/month (not at all unreasonable depending on your PP income) would be MUCH higher. You should definitely get it, but there will be sticker shock.

 

[prominence]

I would imagine that a policy with a benefit of $10-20K/month (not at all unreasonable depending on your PP income) would be MUCH higher. You should definitely get it, but there will be sticker shock.

Thanks for the reply gutonc.

I was curious how much one would have to pay per year for disability insurance to cover a $200,000 salary as a psychiatrist? Can anyone provide a rough estimate?

 

[Winged Scapula]

Coincidentally, just had my insurance physical yesterday for a new policy.

prominence: you need to talk to an agent as there are too many factors involved in quotes:

- your age
- your occupation
- smoking/drugs/alcohol habits (I was drug tested yesterday)
- weight/health problems (ie, they will weigh you, check your cholesterol, review any medications you take)
- social habits (ie, do you skydive, drive a motorcycle, have you been arrested, had any moving violations, had your drivers license revoked/suspended, etc.)
- what are the risks involved in your practice
- where do you live
- whether you want COL increases, terms of payout
- how much coverage you want (most plans cover you for 66% of your current salary; they will ask to see tax returns)

All the above are used with actuarial tables to calculate an approximate price. There were some other factors that my agent crunched on her software program to get me the payment I wanted, but I can tell you that in my calculations, what gutonc pays is about right for that level of coverage (assuming a healthy, non-risk taking individual).

 

[gutonc]

Thanks for the reply gutonc.

I was curious how much one would have to pay per year for disability insurance to cover a $200,000 salary as a psychiatrist? Can anyone provide a rough estimate?

Not to be a jerk, but, do the math. My ~$50K/yr benefit costs me $2500 in premiums annually (no PMH, active, married, no risky hobbies, etc.). So $200K/yr will probably run you....

Then figure +/- 50% because I'm not you.

 

[buckley]

what's the value of a disability insurance? *basic question* i know.

 

[gutonc]

what's the value of a disability insurance? *basic question* i know.

If you become disabled and can't do your job anymore, you get paid. If that's not something you care about, you don't need it.

 

[Winged Scapula]

Not to be a jerk, but, do the math. My ~$50K/yr benefit costs me $2500 in premiums annually (no PMH, active, married, no risky hobbies, etc.). So $200K/yr will probably run you....

Then figure +/- 50% because I'm not you.

Exactly. That was my point as well. Although I'm not married like gutonc I'm healthy and without giving away what I make, my rates are comparable to his given the difference in salary. Yours prominence may not be but given that healthy people pay what we do, you can do the math but see an agent for a real quote.

 

[Bobblehead]

You should try to find an agent. I had one but found him somewhat less knowledgeable than I would have preferred, but I also did some reading on my own before I bought a policy.

Look at Guardian's ProVider Plus policy or a Berkshire policy. Look for own specialty coverage. Try to self-insure for short-term disability and focus mainly on long-term disability.

I ended up buying a slightly larger policy than I needed during training, then cut back on what I didn't need when I settled into my job. After all, no need to cover $500,000 in annual income if you'll never get there at your peak earnings potential. The reason I did this was because after the initial medical qualification I would never have to requalify medically, only financially. YMMV and you really should talk to an agent and do some additional reading on your own.

There's some useful information here as well: http://www.disabilityinsuranceforums.com/

 

[latinman]

The AMA offers disability insurance at an affordable rate. You should check their website.

 

[ANCAdoc]

The earlier you buy the cheaper it is. Let's face it most of us will be in worse health a few years down the line when it comes to the physical and labs. I strongly encourage residents to look at the market early on, it will only get much more expensive later.

I interviewed many companies, the big names. Mass Mutual, Guardian, etc. I eventually choose Guardian (Berkshire Life Insurance Co). Terms to look out for "noncancellable", "guaranteed renewable", "own-occupation".

Based on labs and physical I qualified at the most competitive rates. A $3500 monthly benefit cost me about $1600/year (single young male in the midwest). Thats with a rider to increase my monthly benefit as I make more after residency (no questions asked, no labs), a residual benefit rider, delayed cost of living rider, and catastrophic rider.

It's getting tougher to qualify for good rates in this market. A resident friend of mine found his quote to be prohibitively expensive.

 

[Bobblehead]

The earlier you buy the cheaper it is. Let's face it most of us will be in worse health a few years down the line when it comes to the physical and labs. I strongly encourage residents to look at the market early on, it will only get much more expensive later.

I agree wholeheartedly with this point. This is a very important part of your overall asset protection scheme. Medical qualification/disqualification is important and your rates will hinge on how healthy you are at the time that you're applying.

If you think about it, the whole process of medicine is delayed gratification, which in this situation also involves monetary compensation. Future earnings are your single greatest asset as you're headed out of training and you should protect them accordingly.

Female physicians have it even worse in terms of rate quotes so if you can take advantage of group quotes, perhaps offered through your training program, do so. And do it as early as possible.

 

[lord_jeebus]

I went with Guardian. I'm paying $81/mo for $4000/mo own occupation coverage with the option to increase coverage after residency to $11000/mo without another medical exam, nondelayed 3% cost of living adjustment, and partial disability coverage.

I would not consider any policy that did not have an "own occupation" rider.

My payments are graded (increase every year) but I have the option to convert to level payments until age 50.

I do wish they would offer higher coverage when I'm earning an attending salary, and may buy a second policy elsewhere to cover this.

 

[gutonc]

My payments are graded (increase every year) but I have the option to convert to level payments until age 50.

I should have mentioned that my policy has the level payments now.

 

[sam1999]

Sorry for asking very basic questions. I hope someone can explain. What is the defination of "Disability" for insurance purposes?

Insurance industry define "disability" same as government's defination for welfare or handicap parking sticker purposes or differently?

In general how long short term and long term insurance last? Does this disability insurance covers you if you get fired or laid off or hospital/practice went bankrupt?

 

[Winged Scapula]

Sorry for asking very basic questions. I hope someone can explain. What is the defination of "Disability" for insurance purposes?

Depends on the insurer, but Guardian's definition here is typical.

Insurance industry define "disability" same as government's defination for welfare or handicap parking sticker purposes or differently?

See above.

In general how long short term and long term insurance last? Does this disability insurance covers you if you get fired or laid off or hospital/practice went bankrupt?

Disability does NOT cover you if you get fired/laid off/go bankrupt. Short term disability policies are generally not worthwhile - the rates are exhorbitant. The sooner you wish to be paid (ie, 30 days from disability vs 90 or 180 days), the higher the rates will be. You are better off simply saving the money to cover you for short-term disability (ie, less than 6 mos).

 

[sam1999]

Thanks WS:

Lets say if you get diagnosed with MS or got needle stick injury (hep B/C or HIV) at job where might not be disabled right away as it can take years for these infections to make their full effect. Do they cover under disability insurance?

 

[Winged Scapula]

Thanks WS:

Lets say if you get diagnosed with MS or got needle stick injury (hep B/C or HIV) at job where might not be disabled right away as it can take years for these infections to make their full effect. Do they cover under disability insurance?

Depends on the policy but you probably wouldn't be covered if you were HIV+, Hep C+ when you took out the insurance.

As for MS, if you were healthy when you bought the policy, I cannot see a reason why you would be denied coverage if you were diagnosed later and could not do your job.

These policies cover healthy people who get disabled, in some fashion, and are unable to do their job, at some point in time. It does not matter how long it takes to manifest the disability.

 

[sam1999]

Thanks. I meant if you become HIV/Hep B/C positive after getting policy not already positive before getting policy. Needle stick injury is great risk to resident or hospital staff.

 

[Winged Scapula]

Thanks. I meant if you become HIV/Hep B/C positive after getting policy not already positive before getting policy. Needle stick injury is great risk to resident or hospital staff.

Since that is definitely an occupational hazard in my line of work (albeit not a "great risk"), my policy covers me if I injure myself and become sufficiently ill to become disabled. Hep B not an issue, since you are required to be vaccinated before residency.

 

[elwademd]

Sorry for asking very basic questions. I hope someone can explain. What is the defination of "Disability" for insurance purposes?

Insurance industry define "disability" same as government's defination for welfare or handicap parking sticker purposes or differently?

In general how long short term and long term insurance last? Does this disability insurance covers you if you get fired or laid off or hospital/practice went bankrupt?

this is the sort of thing that patients don't understand, and physicians often misunderstand as well.

"general disability", applying to anyone, typically only means totally disabled. so, the disability insurance you may/may not get in residency as a part of your benefits typically only means this.

as has been mentioned multiple times in this thread, you want a policy for physicians. much of our work is cerebral, regardless of the field. God forbid, you were to have a traumatic brain injury from a car wreck... a typical disability policy would not cover you. again, go back to "totally disabled"

this is where plenty of patients, as sad as their circumstances may be, run into trouble. if you stock shelves at the local supermarket and have a seizure disorder... you are not disabled. it may impinge on your life, but there is nothing physically stopping you from doing your job.

personally, i use northwestern mutual for both life insurance and disability insurance.

to reiterate, as stated above by gutonc and ws, you want to make sure you get a policy specifically aimed at physicians (what some call own occupation):
http://di-checkup.com/?name=Todd+Gi...er=061384&formname=FWSContactForm&attr=FRSite

http://www.prnewswire.com/news-rele...-definition-of-total-disability-70372262.html

*i don't sell or own northwestern mutual, but you have a right to know what kinda stuff is out there

 

[pgg]

The AMA offers disability insurance at an affordable rate. You should check their website.

It's also much more limited than policies from the other companies.

I'm in the military and the AMA was the only company willing to give me an own-occupation policy. (It's crazy, because unless I'm deployed, I'm no higher a risk than any other physician - I live in the suburbs, drive to work at a hospital 10 miles away, and then I go home.) It's cheap, but you get what you pay for.

The policy pays for 5 years, then nothing, unlike other policies that may pay for decades until you're past 60. The potential payout difference is huge ... in my case, the difference between a paltry $150K and (still modest) $750K. Fortunately I have some level of non-own-occ disability coverage through the military.