Chances are, you’ve been told dozens, even hundreds of times now: disability insurance is critical for protecting your long-term financial success.
Disability insurance is a type of insurance that pays you a monthly benefit if you are too sick or injured to work. Especially early in your career and wealth accumulation years, all of the investment you’ve made in medical school and training could be wiped out without the appropriate protection.
A single disabling incident or condition could change your entire life and is a risk worth considering
Here are three driving truths:
- As a physician, you have a high potential for financial loss.
- It is generally advisable to secure a policy at the start of residency.
- If you don’t have a policy yet, it’s not too late to get one.
This coverage counts, but you need to know what you’re getting.
All of the money, time, and effort it takes to become a doctor happens well before you earn your first dime. In fact, even before your first day as an attending, your earning potential is higher than average and is worth protecting. The good news is, there are specialists who can walk you through what disability insurance is, what it covers and what you must look for in a policy.
How it Works: Financial Underwriting
You may get disability insurance one of two ways:
- A private policy can be underwritten and made available based on your earnings.
- A policy or coverage may be provided through an employer’s benefits package.
Insurance companies are only willing to sell certain amounts of insurance. Those companies don’t want claimants to be financially better off when they’re disabled than they would be if they are recovered and back to work. Because of this, the amount of disability insurance you can buy is typically tied to your income and any other disability insurance you might have.
Best Time to Get Disability Insurance
The transition into attending is one of the best times to secure a disability policy because physicians have several options to choose from that can curtail the arduous process of traditional underwriting.
Throughout medical training—and for the first six months post-graduation—physicians are usually eligible for programs that allow them to buy specific benefit amounts without the traditional financial underwriting process.
Here are some examples:
|Time||Possible Benefit Amount|
|Residency or fellowship||Up to $5,000 monthly benefit, regardless of other income or disability insurance|
|Final year of training||Up to $5,000 monthly benefit, regardless of other income or disability insurance|
|New attending||$6,500-$7,500 monthly benefit, depending on insurance company and medical specialty|
|Final year resident or fellow||$6,500-$7,500 monthly benefit, depending on insurance company and medical specialty and within six months of graduation|
Even after signing an employment contract, it’s important that you make the right choice when looking at special underwriting programs versus the traditional financial underwriting process. A signed employment contract tells an underwriter about your expected income and can be used to justify increased benefit amounts when applying for private disability insurance. This can start three to six months before beginning a new job.
Didn’t realize the possibilities? We’ve teamed up with Michael Relvas, to shed light on what may be available to you. For help with evaluating your personal situation, contact them here.
Discounts are Available
You don’t have to accept what peers and colleagues tell you about when and how to get disability insurance. In fact, even if you’ve already graduated, you may still be eligible for resident discounts.
Currently, insurance companies are honoring the discounts delineated above for up to 60 days post completion (some even go as high as 180 days). This means there’s no need to panic, even if you’re coming down to the wire and at the end of your residency or fellowship.
Remember that because these discounts are based on your employer affiliation, insurance agents can consider discounts from a physician’s residency and fellowship program and their new employer, then decide which is most advantageous.
Disability Insurance: Not as Complicated as They Want You to Think
Physicians are highly intelligent, highly skilled people. You are more than capable of understanding insurance. That said, you are also in one of the most demanding careers imaginable. No matter how much research you’ve done, it is always beneficial to work with an agent who has experience in these matters.
Find a team that exclusively focuses on disability insurance and is committed to putting your interests first.
Every insurance agent can claim to do this, but not every agent does.
The CDx Endorsement: Michael L. Relvas, CFP®
Michael Relvas is a Certified Financial Planner professional that’s been committed to this philosophy for the last 15-years. We don’t just trust Michael because of his extensive knowledge and experience in this space, but even more so because of his ethics. We know he’ll put your interests first, even if it means recommending that you work with a different agent. You can get more information here.