Medical Resident: When Should I Get Disability Insurance

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Re: Medical Resident: When Should I Get Disability Insurance

Postby staythecourse » Fri May 10, 2013 8:41 am

dwade1109 wrote:So we get advertisments all the time in the mail about DI. How to know how to choose a good one? What are the most important factors?


Wow the best question asked thus far.

Here is what you want as a physician:

Own occupation (meaning if you can't do the work you are doing at the time of disability then you are disabled and can still make money doing something else not related).

Add the residual disability rider/ recovery benefit rider to the policy (would say likely just as important as the policy itself. This says if you can still do some of the work, but not all or not full time secondary to disability AND have a 20% loss of income then you can get covered that percentage of loss with your policy).

Guaranteed renewable as long as your pay your premiums.

READ the definitions of total disability and residual disability VERY closely WORD FOR WORD. Get residual that does not require you to have to be totally disabled before being allowed to claim residual. READ def. of total disability. Is it can't perform ALL or SOME of the substantial parts of you job.

The MOST important is you don't want false security. If you purchase a disability policy you are expecting if you need it they are not going to hassle you more then what is reasonable to make sure you are not lying. The companies I have seen with the best reputation of paying out are: Principal Financial, Mass Mutual, Northwestern, Standard, and Guardian. They have solid to great balance sheets and financial standing. DO NOT purchase Provident, Sun, and Unum there is litany of stories/ law suits re: bad faith dealings with them.

If one is in practice already: Add future benefit rider. This allows one to nearly automatically increase their coverage if their salary increases to warrant it in the first three yr. of coverage (i.e. salary bump from attending to partner) NO MATTER what your health is at that time (i.e. no denial based on your current health at that time even if it has worsened since the policy was taken out).

Last important point is make sure you re-read your application before final submission. Easiest low hung fruit for denial is to find false information that you submitted at that the time of application several yrs. LATER when you try to apply for disability. Period of contestability does not cover intentional misrepresentation).

Hope this helps. It isn't as difficult as it sounds.

p.s. always pay for the policy yourself (posttax earnings) as the policy then becomes tax free income (tax rates are only going up on the wealthy so this will narrow your loss of income on a post tax basis when compared to when working)
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Re: Medical Resident: When Should I Get Disability Insurance

Postby staythecourse » Fri May 10, 2013 8:52 am

dhodson wrote:he isnt the one giving misinformation. first he never said that anyone would force surgery on someone. He was just rightly pointing out that such an injury isnt as likely to result in a long term situation where a doctor cant perform their job and the insurance will pay out. Its possible but not as likely.


You can defend whoever you want, but he/she gave an example of insurance not covering your disability because you could have just had a total ankle and gone back to work and that is wrong no matter how you or someone else thinks. There have been MANY lawsuits regarding just this point. I can bet if this situation played out in real life the insurance company would not even attempt such a reason for denial, but instead would try to find another reason to deny. For ex: An internist who sits all day seeing pts. would not need to be prevented from doing all his substantial duties of seeing pts. while sitting and thus is not disabled. They could even argue that surgeon could still see pts. in office the same way even if he couldn't do surgery (inability to stand on the ankle) which would mean he could do SOME, but not ALL of his substantial duties and thus would be only residually disabled instead of totally disabled.

I did not bring this up to prove I am right, but so others don't get confused thinking "boy did not know my carrier can force me to have back surgery", for example. Physicians, like many others, often get screwed because they don't know their rights or more important the rights the other side has or does not have.

Good luck.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby dhodson » Fri May 10, 2013 9:19 am

no it isnt wrong in any sense. to begin with you made up the idea that he was saying some insurance company could force a procedure on a person. He never implied or said that. 2nd off, regardless if its surgery or medical management of whatever, the injury isnt as likely to produce long term disability that would result in a claim. The idea that a physician wouldnt obtain the normal/best care in orderto still receive a claim is the inappropriate suggestion.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby dhodson » Fri May 10, 2013 9:38 am

staythecourse wrote:
dwade1109 wrote:So we get advertisments all the time in the mail about DI. How to know how to choose a good one? What are the most important factors?


Wow the best question asked thus far.

Here is what you want as a physician:

Own occupation (meaning if you can't do the work you are doing at the time of disability then you are disabled and can still make money doing something else not related).

Add the residual disability rider/ recovery benefit rider to the policy (would say likely just as important as the policy itself. This says if you can still do some of the work, but not all or not full time secondary to disability AND have a 20% loss of income then you can get covered that percentage of loss with your policy).

Guaranteed renewable as long as your pay your premiums.

READ the definitions of total disability and residual disability VERY closely WORD FOR WORD. Get residual that does not require you to have to be totally disabled before being allowed to claim residual. READ def. of total disability. Is it can't perform ALL or SOME of the substantial parts of you job.

The MOST important is you don't want false security. If you purchase a disability policy you are expecting if you need it they are not going to hassle you more then what is reasonable to make sure you are not lying. The companies I have seen with the best reputation of paying out are: Principal Financial, Mass Mutual, Northwestern, Standard, and Guardian. They have solid to great balance sheets and financial standing. DO NOT purchase Provident, Sun, and Unum there is litany of stories/ law suits re: bad faith dealings with them.

If one is in practice already: Add future benefit rider. This allows one to nearly automatically increase their coverage if their salary increases to warrant it in the first three yr. of coverage (i.e. salary bump from attending to partner) NO MATTER what your health is at that time (i.e. no denial based on your current health at that time even if it has worsened since the policy was taken out).

Last important point is make sure you re-read your application before final submission. Easiest low hung fruit for denial is to find false information that you submitted at that the time of application several yrs. LATER when you try to apply for disability. Period of contestability does not cover intentional misrepresentation).

Hope this helps. It isn't as difficult as it sounds.

p.s. always pay for the policy yourself (posttax earnings) as the policy then becomes tax free income (tax rates are only going up on the wealthy so this will narrow your loss of income on a post tax basis when compared to when working)



id read the disability articles from this site
http://whitecoatinvestor.com/medical-records-3/
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Re: Medical Resident: When Should I Get Disability Insurance

Postby lightheir » Fri May 10, 2013 10:33 am

Bobbybell wrote:
lightheir wrote:FWIW, I had very few funds to work with as a resident, and ended up not getting the disability insurance then because I simply couldn't afford it.

I got it as a new attending 2 years after graduating, and it was MUCH, MUCH more affordable with the increase in income that comes with becoming an attending.

I do understand that it makes sense healthwise to get it as early as possible, since you're locking in your premiums at your best health if you do it early, but honestly, I felt the 2-year wait was completely worth it given how much easier (nearly trivial) it was to pay for the insurance as an attending as compared to doing it as a resident.

I'm actually surprised that the salespeople come out so hard in residency (they come out HARD.) It's so much of an easier sell as a new attending with the income - nearly a no-brainer at that point, whereas it can be a major financial strain in residency.


There is a very good reason why they come out so hard in residency. It is a very smart long term business decision for the agents who specialize in the medical market. They don't care about getting your business as a resident. They don't make that much money on it. They want your business when you go from making $50,000 to making $300,000. The best way to get your business when you are making $300,000 is to get you as a client when you are making $50,000.

Use yourself as an example. If an agent came after you as a resident and presented himself in a professional manner and you chose not to buy coverage because of the finances, don't you think that he would have a very good shot of getting your business when you became an attending? If he didn't come after you as a resident, he would have virtually no chance to get your business as an intending.

I have friends who make 7 figures who have built their entire practice on going after residents. Their income from getting the new residents doesn't come close to covering their expenses. However, if they get 50 new residents as clients, it means that they have 50 new clients who will have 6 figure incomes in the future.


True, that's likely the case. Although I will say that in my particular situation, the poor agent in residency went through a lot of the policy details with me, but I ended up not being able to afford it.

Moved away to attending job and promptly took up a the policy with a new person who did much less work.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby lightheir » Fri May 10, 2013 10:35 am

dhodson wrote:
staythecourse wrote:
lightheir wrote:ALthough you do have to consider that it's highly unlikely that a disability policy for a doctor will pay out for that ankle injury long-term. Most MDs can get by just fine with a complete ankle replacement to do their job amply, which is the main criteria at which point disability pays in. You'd have better luck with a disabling back injury getting it to pay out.


No offense, but it is not right giving misinformation. A disability carrier can not make you get surgery only reasonable medical treatment from a specialist in that field. There was even recently a law suit of one denying a claim to surgeon or OB stating they wanted him/ her to have a carpal tunnel release and he refused. ALL surgeries have possible complications and that is one reason they can't force you.

Not sure what happened in that case, but that was just for a 20 min. carpal tunnel release. Imagine them trying to force a total ankle replacement on someone.

Good luck.


he isnt the one giving misinformation. first he never said that anyone would force surgery on someone. He was just rightly pointing out that such an injury isnt as likely to result in a long term situation where a doctor cant perform their job and the insurance will pay out. Its possible but not as likely.


Exactly right. The disability insurance isn't a replacement for health insurance and isn't meant to mainly cover medical expenses. It' smeant to provide income replacement in the case of a medical disability that prevents you from doing your work on a long-term basis without significant handicap.

An ankle injury is unlikely to prevent a doctor, even a surgeon, from practicing medicine. Where as a debilitating back injury could.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Valuethinker » Fri May 10, 2013 10:48 am

matjen wrote:I have sort of the opposite scenario that I have been struggling with. Married an ER Physician about 1.5 years ago and spent the first 6 months straightening out her finances (typical Dr. abuse from insurance salesman).

Amazingly, she got the whole life and the loaded crappy mutual funds but didn't get the disability insurance. I was all set to remedy that right after the finances but have put it on the back burner. Between the two of us we have already won the game but we are still kind of young. I am 47 and she is 41. Worth mid-7 figures and have no children though one is a possibility. Moving forward she will be the main breadwinner but my portfolio is much larger.

Can someone set me straight? What would you do? I think it is a closer call once you already have substantial assets.


The next 10 years is probably your risky bit. I would consider a policy covering her until, on your financial plan, you have enough savings to live from that point in retirement. At 41 it will not be cheap but a policy to 55, say, should be doable.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Valuethinker » Fri May 10, 2013 10:51 am

dwade1109 wrote:Wow, as a resident I had not even thought about disability insurance.

Right now according to my hospital's website I have "at no cost to employee while in training 60% of monthly basic earnings, to a maximum of $3,500/month." I make like 50k a year, so pretax like 4.1k a month, meaning 60% is 2.4k. Seems pretty low. Should I be looking for my own individual plan?


Ok there may be special programmes for residents that allow more coverage, or a future guarantee of increase in cover (the terminology is in a staythecourse post here).

Generally you cannot insure (both employer and individual plan benefits taken together) more than 65% of your pre disability income.

The advantage of insurance paid with after tax dollars (ie not provided by employer) is that the benefit is itself, then, not taxable, as I understand it.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Kiloaxe » Fri May 10, 2013 11:06 am

I am a pgy2 EM resident. I ended up buying a DI policy early in intern year, to essentially insure my insurability. Everything that Staythecourse said is key. I have the bare minimum coverage now, and once I become an attending I can increase it due to the future benefit rider without having to go through another health screen etc. it's best to go through an agent who deals primarily with physicians as he/she will know exactly what to look for in a policy.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby BruDude » Fri May 10, 2013 12:42 pm

Bobbybell wrote:
BruDude wrote:
Bobbybell wrote:The savings are less for men, but I have never seen a situation when the discount resulted in no savings. Also, most of what I have seen in the resident market has been at a 25% sex neutral rating resulting in about a 40% savings for females and 15% for men.


I just ran a sample quote with Guardian for a 30-year old male with a 4M occupation class, 90-day elimination period, age-65 benefit period, $5k/mo total disability benefit, $12k/mo FIO, 3% COLA, Residual rider. The premium for gender-distinct rates with 10% discount was $2191 and the premium for unisex rates with 10% discount was $2773. For a female with the same figures the premium with gender-distinct rates is $3484 and with the unisex rates is $2773. Without a discount the gender-distinct rates are $2434 for male and $3871 for female.


Like I said, most of what I have seen in the resident market has been at a 25% sex neutral discount. If someone is truly selling in this market, they should have enough business where they are able to get a discount that is larger than 10%.


The only company I know of that offers a discount bigger than 10% is Principal, and they do not have a specialty definition of disability. Individual agents can't negotiate the discounts for the residency programs and associations as the same discount percentage is offered to all of them.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby nonnie » Fri May 10, 2013 1:07 pm

lightheir wrote:
nonnie wrote:
newdoc wrote:Fair enough. But should I get it right this second or can I afford to wait a year?


I don't know-- is the unexpected car crash or degenerative disease you don't expect going to happen in six months, a year, three years or never? You keep asking the question and you keep getting the same answer-- do it now. I speak from the experience of going on total disability at age 47 and collecting for 18 years--totally unexpected spinal degeneration. Before I met him, my partner had started collecting disability--totally unexpected illness/condition. A couple years ago a car ran into his 21 year old son while he was riding his bike-- smashed his ankle. He's mostly OK with slight impairment in that leg-- he can't get disability insurance. This kid's hobby was stunt bike riding (accident happened on city street). He didn't think it could happen to him...


ALthough you do have to consider that it's highly unlikely that a disability policy for a doctor will pay out for that ankle injury long-term. Most MDs can get by just fine with a complete ankle replacement to do their job amply, which is the main criteria at which point disability pays in. You'd have better luck with a disabling back injury getting it to pay out.


It was just an example! Let me spell it out-- what if the OP had an accident of some sort next week that involved his hand or arm(s)?
This post may be monitored for quality assurance purposes.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby staythecourse » Fri May 10, 2013 1:10 pm

lightheir wrote:
dhodson wrote:
staythecourse wrote:
lightheir wrote:ALthough you do have to consider that it's highly unlikely that a disability policy for a doctor will pay out for that ankle injury long-term. Most MDs can get by just fine with a complete ankle replacement to do their job amply, which is the main criteria at which point disability pays in. You'd have better luck with a disabling back injury getting it to pay out.


No offense, but it is not right giving misinformation. A disability carrier can not make you get surgery only reasonable medical treatment from a specialist in that field. There was even recently a law suit of one denying a claim to surgeon or OB stating they wanted him/ her to have a carpal tunnel release and he refused. ALL surgeries have possible complications and that is one reason they can't force you.

Not sure what happened in that case, but that was just for a 20 min. carpal tunnel release. Imagine them trying to force a total ankle replacement on someone.

Good luck.


he isnt the one giving misinformation. first he never said that anyone would force surgery on someone. He was just rightly pointing out that such an injury isnt as likely to result in a long term situation where a doctor cant perform their job and the insurance will pay out. Its possible but not as likely.


Exactly right. The disability insurance isn't a replacement for health insurance and isn't meant to mainly cover medical expenses. It' smeant to provide income replacement in the case of a medical disability that prevents you from doing your work on a long-term basis without significant handicap.

An ankle injury is unlikely to prevent a doctor, even a surgeon, from practicing medicine. Where as a debilitating back injury could.


Boy I am glad I did not learn from either one of you as both of you are wrong. I know personally one surgeon who is on disability for exactly a severe OA right ankle (and yes he did not opt for sx.) and an internist who is on for b/l knee OA.

Guess the claims adjusters from their two different insurers knew less then you.

It is common sense for me, but not for you two I guess. If you can't stand on feet for 2+ hours to do sx. then how would a surgeon make a living?? He would not be able to attract pt's to see him in the office for visits if he could not offer sx. He spent more time in clinic then the OR, but his CPT codes doing sx.(which he was no longer able to do because of the inability to stand for long periods) was the vast majority of his income. Those were two of the reasons he used and easily got coverage. Don't know how the internist approached it so can't comment.

The problems with doctors are we think of illness. That is not what disability is. It due to injury or sickness that one cannot do the substantial and material parts of their job. What one illness is may not be disabling for one occupation may be for another.

Again I am not mentioning this to be right as I am more concerned about others getting wrong info. Those are two examples (similar to the presented) which shows you guys are just flat wrong. I can ask if the guy I know if he is willing to talk about it if you guys still are not clear.

Good luck.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby dhodson » Fri May 10, 2013 2:14 pm

i have no confusion....im not sure why you keep attributing anyone but yourself the idea that disability insurance carriers might try to force a procedure or treatment on a person. Nobody but you has mentioned that.

The issue you brought up was does that particular injury usually result in a disability that would make one unable to do their prinicipal parts of their job and in todays world of txt options, it isnt as likely but the devil is in the details. It is possible which ive now mentioned at least twice. Im sure the more comorbidities one has and the greater the injury, the greater then chance and that if one has more of these factors that at some point the risk/benefits of whatever txt become such that a reasonable person wouldnt do it. But yes if a person cant do the material parts of the job then own occ polices will pay bc payment isnt directly linked to your icd9 but what you can and cant do. You actually know how this would or would not apply to other specialties like internal medicine so im not sure why you said you dont know how it would apply. If they are some sort of internist where their job cant be done with their limitations then they collect disability. Likely unless they are very procedurally oriented and have a record of that being the case then they likely could sit and do their job. This assumes they dont some chronic pain and its just standing is the issue. You keep on putting words in peoples mouths that they didnt say.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby freebeer » Fri May 10, 2013 2:59 pm

I'm confused on one point, which is why this is a special issue for M.D.s. I'm in the software industry, and while larger companies may offer disability insurance as a fringe benefit, smaller companies don't bother and I expect very very few software engineers think about purchasing disability insurance on an individual basis or make it a major factor in choosing employers. But the same head, back, carpal tunnel, etc. injuries that have been cited here could certainly keep one from doing programming. So is it something about practicing medicine that makes injuries more likely or is it something about the larger sunk cost in training, or is it just that doctors are a juicy target for offers that are profitable for insurers but don't really pay off on average for policy holders? Or a transference effect of seeing injured people day after day?
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Re: Medical Resident: When Should I Get Disability Insurance

Postby newdoc » Fri May 10, 2013 5:59 pm

freebeer wrote:I'm confused on one point, which is why this is a special issue for M.D.s. I'm in the software industry, and while larger companies may offer disability insurance as a fringe benefit, smaller companies don't bother and I expect very very few software engineers think about purchasing disability insurance on an individual basis or make it a major factor in choosing employers. But the same head, back, carpal tunnel, etc. injuries that have been cited here could certainly keep one from doing programming. So is it something about practicing medicine that makes injuries more likely or is it something about the larger sunk cost in training, or is it just that doctors are a juicy target for offers that are profitable for insurers but don't really pay off on average for policy holders? Or a transference effect of seeing injured people day after day?


Good question. You can easily make the argument that indeed doctors have more potential to sustain a "disability" and more to lose in doing so. We work more hours, we perform strenuous labor (e.g. surgery), we deal with violent/abusive patients (and coworkers), and given the expensive lifestyles of many doctors, a break in our income streams could be absolutely catastrophic. I suppose this is so in any profession, but indeed it is much more so amongst physicians who, I should add, are notorious for being financially irresponsible. I see the incentive to have disability insurance in that regard, especially if you don't have a substantial nest egg saved up and you're using each 5-figure paycheck to finance your 2 new Hummers and your two-million-dollar mortgage, bankroll each of your divorced parents' early retirements and send your kindergarten-aged kids to that private school with the Obama children.

But, for me, your last point really hits the mark and is precisely the reason why I'm having such a hard time with this. When I tell you that there are financial advisors visiting medical schools across the country trying to recruit us as clients, it's no joke! They do want our business precisely for the reasons mentioned in a previous post, and they are aggressive about snagging us up while we still know little to nothing about personal finances and are unable to tell what's what. Our high earning potential coupled with naivete makes us prime pickings for the finance firms. I'm just trying to eliminate my own ignorance in all this so I can figure out when I'm getting a good deal and when I'm being manipulated.
Last edited by newdoc on Fri May 10, 2013 6:34 pm, edited 1 time in total.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby dhodson » Fri May 10, 2013 6:14 pm

you are wise to try and understand what they are doing and why? Its unfortunate that many med schools and residency programs have not provided better information so people can make an informed choice.

the big problem is allowing them to talk you into permanent insurance. The number of us docs who have been fooled into this is amazing. Most of us are too ashamed to admit how much money we have wasted on that "investment". Disability insurance is very often appropriate and then we accidently believe their other advice will also be appropriate.

The agents would sell to anyone who would purchase. Thing is that its an expensive product with very high comissions. Pricing is also dictated by risk of the person and their job. If you are of lesser means, although it might be nice to purchase this product, you just cant easily afford it so that would be a lot of time for little fruit on the agents part. They pick docs bc for the most part we can afford it and not just any policy but larger polices which have larger comissions. Why do people rob banks bc that is where the money is located.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Bobbybell » Fri May 10, 2013 8:06 pm

lightheir wrote:
Bobbybell wrote:
lightheir wrote:FWIW, I had very few funds to work with as a resident, and ended up not getting the disability insurance then because I simply couldn't afford it.

I got it as a new attending 2 years after graduating, and it was MUCH, MUCH more affordable with the increase in income that comes with becoming an attending.

I do understand that it makes sense healthwise to get it as early as possible, since you're locking in your premiums at your best health if you do it early, but honestly, I felt the 2-year wait was completely worth it given how much easier (nearly trivial) it was to pay for the insurance as an attending as compared to doing it as a resident.

I'm actually surprised that the salespeople come out so hard in residency (they come out HARD.) It's so much of an easier sell as a new attending with the income - nearly a no-brainer at that point, whereas it can be a major financial strain in residency.


There is a very good reason why they come out so hard in residency. It is a very smart long term business decision for the agents who specialize in the medical market. They don't care about getting your business as a resident. They don't make that much money on it. They want your business when you go from making $50,000 to making $300,000. The best way to get your business when you are making $300,000 is to get you as a client when you are making $50,000.

Use yourself as an example. If an agent came after you as a resident and presented himself in a professional manner and you chose not to buy coverage because of the finances, don't you think that he would have a very good shot of getting your business when you became an attending? If he didn't come after you as a resident, he would have virtually no chance to get your business as an intending.

I have friends who make 7 figures who have built their entire practice on going after residents. Their income from getting the new residents doesn't come close to covering their expenses. However, if they get 50 new residents as clients, it means that they have 50 new clients who will have 6 figure incomes in the future.


True, that's likely the case. Although I will say that in my particular situation, the poor agent in residency went through a lot of the policy details with me, but I ended up not being able to afford it.

Moved away to attending job and promptly took up a the policy with a new person who did much less work.


That's typical. It is the reason why it is so critical of those who work this market to have excellent systems in place to stay in front of people and the ability to easily work with them regardless of where they go.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Bobbybell » Fri May 10, 2013 8:09 pm

newdoc wrote:
freebeer wrote:I'm confused on one point, which is why this is a special issue for M.D.s. I'm in the software industry, and while larger companies may offer disability insurance as a fringe benefit, smaller companies don't bother and I expect very very few software engineers think about purchasing disability insurance on an individual basis or make it a major factor in choosing employers. But the same head, back, carpal tunnel, etc. injuries that have been cited here could certainly keep one from doing programming. So is it something about practicing medicine that makes injuries more likely or is it something about the larger sunk cost in training, or is it just that doctors are a juicy target for offers that are profitable for insurers but don't really pay off on average for policy holders? Or a transference effect of seeing injured people day after day?


Good question. You can easily make the argument that indeed doctors have more potential to sustain a "disability" and more to lose in doing so. We work more hours, we perform strenuous labor (e.g. surgery), we deal with violent/abusive patients (and coworkers), and given the expensive lifestyles of many doctors, a break in our income streams could be absolutely catastrophic. I suppose this is so in any profession, but indeed it is much more so amongst physicians who, I should add, are notorious for being financially irresponsible. I see the incentive to have disability insurance in that regard, especially if you don't have a substantial nest egg saved up and you're using each 5-figure paycheck to finance your 2 new Hummers and your two-million-dollar mortgage, bankroll each of your divorced parents' early retirements and send your kindergarten-aged kids to that private school with the Obama children.

But, for me, your last point really hits the mark and is precisely the reason why I'm having such a hard time with this. When I tell you that there are financial advisors visiting medical schools across the country trying to recruit us as clients, it's no joke! They do want our business precisely for the reasons mentioned in a previous post, and they are aggressive about snagging us up while we still know little to nothing about personal finances and are unable to tell what's what. Our high earning potential coupled with naivete makes us prime pickings for the finance firms. I'm just trying to eliminate my own ignorance in all this so I can figure out when I'm getting a good deal and when I'm being manipulated.


There is nothing about this product that makes it more appropriate for doctors as compared to other professions. I think that the major difference is that doctors are an easier sale simply because they, more than any other profession, have had it drilled into their heads that DI is important.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby nonnie » Fri May 10, 2013 8:16 pm

newdoc wrote:. I suppose this is so in any profession, but indeed it is much more so amongst physicians who, I should add, are notorious for being financially irresponsible.


Can you speculate why this is? My ex-brother in law wasn't exactly financially irresponsible--he just bought time shares, took flyers on stocks and didn't manage his investments well. He was head of a department at a large university hospital and had written a textbook and if he had wanted to he probably could have gone on a free 3-day weekend sponsored by either a drug, pharmaceutical or financial company ever weekend of his life. He also had week-long free vacation offers and more ...
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Bobbybell » Fri May 10, 2013 8:22 pm

BruDude wrote:
Bobbybell wrote:
BruDude wrote:
Bobbybell wrote:The savings are less for men, but I have never seen a situation when the discount resulted in no savings. Also, most of what I have seen in the resident market has been at a 25% sex neutral rating resulting in about a 40% savings for females and 15% for men.


I just ran a sample quote with Guardian for a 30-year old male with a 4M occupation class, 90-day elimination period, age-65 benefit period, $5k/mo total disability benefit, $12k/mo FIO, 3% COLA, Residual rider. The premium for gender-distinct rates with 10% discount was $2191 and the premium for unisex rates with 10% discount was $2773. For a female with the same figures the premium with gender-distinct rates is $3484 and with the unisex rates is $2773. Without a discount the gender-distinct rates are $2434 for male and $3871 for female.


Like I said, most of what I have seen in the resident market has been at a 25% sex neutral discount. If someone is truly selling in this market, they should have enough business where they are able to get a discount that is larger than 10%.


The only company I know of that offers a discount bigger than 10% is Principal, and they do not have a specialty definition of disability. Individual agents can't negotiate the discounts for the residency programs and associations as the same discount percentage is offered to all of them.


You sound like you are a career Guardian agent. I believe that NML, MassMutual, MetLife,Principal, Standard, and
Union Central will all go beyond 10%. I know that MassMutual will go up to 35% off and will give underwriting concessions.

Where I live, and it is a place with lots of hospitals, MassMutual has the lion share of residents. In fact, Guardian has virtually no presence in that market. I assume that it is because of the discount or lack of one. For the record, I have no horse in this. I have zero clients who are medical residents.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby lightheir » Fri May 10, 2013 8:30 pm

Just to be clear as well - the payouts for long-term disability are surprisingly high, in terms of both both dollars paid out and in terms of % likelihood you'll need to have the insurance kick in. Most stats when I was purchasing not long ago was over a 30% chance you'd be disabled for 3+months to require the disability to kick in at some point in your career, and I think Guardian pays out nearly 50% of their dollars collected to policyholders on disability. At least for this type of disability insurance, it doesn't seem like a scam in terms of a policy covering something so unlikely to happen than it's negigible.

I actually also don't know why it's particularly sold to doctors and would be interested in hearing if anyone had inside info why it's so. Amongst speculative reason I could think of is 1) Steady income stream, as opposed to say a businessperson with high-debt type businesses, 2) Guaranteed entry to that income stream upon residency graduation, which is more than you can say for most professions including law, and 3) High enough income stream as an attending such that it's not onerous to take on the insurance. But those are just guesses, and I do wonder why software engineers don't have similar policies in general.

At least for me, it wasn't a big deal at all to defer the 2-3 years from residency to attendinghood to buy the insurance. The salespeople made a big deal about "but something with your health could HAPPEN in that period and you could be excluded from future benefits!" but honestly, you're still young enough usually ages 28-32 at that point so that another 2-3 years is unlikely going to cause a big change in your overall health. I do think however, it's wise to lock in those guaranteed benefits before your health issues do start cropping up at which point even something like mild hypertension can completely exclude you from the policy (happened to my buddy, who seems like he's in perfect young health, but just happened to measure a tad high on the BP.Insurers refused to insure him, period.)
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Re: Medical Resident: When Should I Get Disability Insurance

Postby BruDude » Fri May 10, 2013 8:42 pm

Bobbybell wrote:You sound like you are a career Guardian agent. I believe that NML, MassMutual, MetLife,Principal, Standard, and
Union Central will all go beyond 10%. I know that MassMutual will go up to 35% off and will give underwriting concessions.

Where I live, and it is a place with lots of hospitals, MassMutual has the lion share of residents. In fact, Guardian has virtually no presence in that market. I assume that it is because of the discount or lack of one. For the record, I have no horse in this. I have zero clients who are medical residents.


I'm an independent agent, Guardian makes up about 80% of my DI sales because they have the best product and most of my DI clients are physicians. The discounts larger than 10% are for multi-life sales, not association or student/resident discounts. The larger multi-life discounts are only available when a hospital has agreed to endorse a specific insurance company and they have to use the specific agent or agency that holds that agreement. Agents that hold these agreements usually have a large production requirement so they are only selling one company most of the time.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Bobbybell » Fri May 10, 2013 9:02 pm

BruDude wrote:
Bobbybell wrote:You sound like you are a career Guardian agent. I believe that NML, MassMutual, MetLife,Principal, Standard, and
Union Central will all go beyond 10%. I know that MassMutual will go up to 35% off and will give underwriting concessions.

Where I live, and it is a place with lots of hospitals, MassMutual has the lion share of residents. In fact, Guardian has virtually no presence in that market. I assume that it is because of the discount or lack of one. For the record, I have no horse in this. I have zero clients who are medical residents.


I'm an independent agent, Guardian makes up about 80% of my DI sales because they have the best product and most of my DI clients are physicians. The discounts larger than 10% are for multi-life sales, not association or student/resident discounts. The larger multi-life discounts are only available when a hospital has agreed to endorse a specific insurance company and they have to use the specific agent or agency that holds that agreement. Agents that hold these agreements usually have a large production requirement so they are only selling one company most of the time.


Yes, it is a multi-life discount. As I originally said, residents can often get their coverage at greatly reduced cost because of these discounts.

If you do 80% of your business with Guardian, why don't you hold a career contract with them? With pension, health insurance, 401(k) match, getting paid w-2 instead of 1099, etc, it seems like you would be leaving a lot of money on the table.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby BruDude » Fri May 10, 2013 9:13 pm

Bobbybell wrote:
BruDude wrote:
Bobbybell wrote:You sound like you are a career Guardian agent. I believe that NML, MassMutual, MetLife,Principal, Standard, and
Union Central will all go beyond 10%. I know that MassMutual will go up to 35% off and will give underwriting concessions.

Where I live, and it is a place with lots of hospitals, MassMutual has the lion share of residents. In fact, Guardian has virtually no presence in that market. I assume that it is because of the discount or lack of one. For the record, I have no horse in this. I have zero clients who are medical residents.


I'm an independent agent, Guardian makes up about 80% of my DI sales because they have the best product and most of my DI clients are physicians. The discounts larger than 10% are for multi-life sales, not association or student/resident discounts. The larger multi-life discounts are only available when a hospital has agreed to endorse a specific insurance company and they have to use the specific agent or agency that holds that agreement. Agents that hold these agreements usually have a large production requirement so they are only selling one company most of the time.


Yes, it is a multi-life discount. As I originally said, residents can often get their coverage at greatly reduced cost because of these discounts.

If you do 80% of your business with Guardian, why don't you hold a career contract with them? With pension, health insurance, 401(k) match, getting paid w-2 instead of 1099, etc, it seems like you would be leaving a lot of money on the table.


Because I also sell health, life, and LTC, and being independent lets me be competitive in all facets of the business. They have the best DI product but I never used them for LTC due to high price and rarely use them for life insurance sales because their term rates are not that competitive and their underwriting is very conservative compared to the other companies I use. Getting a bit off topic though so I'll just leave it at that.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby bayview » Fri May 10, 2013 10:29 pm

Valuethinker wrote:
newdoc wrote:I wish you and and your wife good luck in all this.

I see what you're saying and it's perfectly logical. But bringing up highly unlikely catastrophic events is what the insurance sellers have done with me as well: Of course it's possible that something bad might happen. But statistically, it's almost certainly not going to, especially at this time in my life. The scenarios you describe occur in maybe <1% of people in their mid-20s. I fully understand that I am assuming some risk in doing so, but why can't I, given my health history, spend perhaps just an extra year coasting on that other 99% and save myself $1,000? Is it irrational to propose doing so?


I think that you do not understand statistics, fully.

Statistics says over a population of millions you have 1/100 chance of being disabled. Statistically, your expected value of premiums paid in is ALWAYS less than your expected returns (chance of disability x amount of average payout). That's how insurance works, and is just as true of car, house insurance etc. (the insurance company also takes out a profit, sales commission, but they may make some investment return-- right now investment returns are pretty awful).

But if it happens to you, you cease to be a statistic. Suddenly you become Probability = 1.0.

You have to look at the expected utility of a loss vs. the expected utility of $1000 pa on something else for 1-5 years.

I think you'll find the loss to your life of being fully or partially disabled far exceeds any possible gain from that $1000 or $5k.

(emphasis mine)

Bumping this, because I think it is such an excellent and important summary of the whole discussion.

Just as no one ever expects the Spanish Inquisition in Monty Python skits, no one ever thinks that they will be mugged, or hit by a drunk driver, or develop a new spot on a cxr.

And it's not so much protecting what you're making now, that some combo of help from your family + Medicaid + something something could cover. It's what might happen 20 years down the road that you can't get covered for.

It's somewhat similar to cramming as much as you can into traditional and Roth IRA's now, even if it means a bit more mac and cheese and tuna salad for dinner than you'd like, in order to have that tax-advantaged space available in the future when your income is too high. Your future self will be happy that your current self did this now.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby nonnie » Sat May 11, 2013 12:45 pm

We found this website incredibly helpful when dealing with filing a disability claim and hiring a lawyer to successfuly pursue this claim. It's run my insurance agents but there's a wealth of knowledge and they don't always agree with each other plus there are consumers also.

http://www.disabilityinsuranceforums.com/
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Re: Medical Resident: When Should I Get Disability Insurance

Postby stjoe56 » Sat May 11, 2013 1:12 pm

I am shocked and amazed that some people think bad things cannot happen to them. I am a walking example of how life can go to sh*t quickly. I am NOT a doctor, but a legal writer. I wrote those boring technical books that are worthless unless you need them. But if you need them they are priceless.

I somehow got long term disability insurance. Due to illness, I had to quit working and lost my $XXX,XXX income. Luckily I had the long term disability insurance. I was one of those slam dunk cases (of course it helped I hired an expert to help me draft my claim) that was approved of in 30 days.

Would I have survived with the insurance? Yes, I would have. But having $XX,XXX tax free income (paid the insurance with after tax dollars so it was tax free) sure makes life easier. Between social security for my wife, myself, and the disability income, we have a large $XX,XXX income. That means we do not have to draw done on our IRA's, annuities, and savings as soon.

For the past five years, I have been a pest to doctors, lawyers, and other business people. I have encouraged them to buy long term disability insurance. And if they have the time, I tell them my story.

So to any medical resident, the answer is a resounding yes: GET THE LONG TERM DISABILITY INSURANCE ASAP.

SJ
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Re: Medical Resident: When Should I Get Disability Insurance

Postby freebeer » Sat May 11, 2013 3:15 pm

Bobbybell wrote:...There is nothing about this product that makes it more appropriate for doctors as compared to other professions. I think that the major difference is that doctors are an easier sale simply because they, more than any other profession, have had it drilled into their heads that DI is important.


Right, but this begs two questions: WHY doctors get it drilled into their heads that DI is important, and WHETHER it's true that it is. Clearly it's not all just about sales people, many doctors and educators, including posters on this thread, strongly advise to get it. So there seems to be at least some level of cultural belief in the professional that DI is important. But it's not clear why that perception is held in medial and not in other similarly-situation skilled professions like law and engineering. And it's not clear whether it's an entirely rational perception, given that DI seems to be the exception rather than the rule in these other skilled professions.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby dhodson » Sat May 11, 2013 3:34 pm

Again the reason they go after doctors is bc doctors can afford to pay for it. It is a product with very high comissions and it typically pays comisssions for extended periods of time. If im going to make 50% comission on something do i want to make that 50% on a product for someone who makes 80k or 300k? Assuming the same amount of work, the 300k person. At some point, we all have certain costs that cant be reduced and the 80k person just is going to have a harder time budgeting this product. In regards to the stats, the odds arent high that you would receive benefits long term since frankly you dont really care that much about a short term disability like 6 months to a year (you will pay more than this amount anyway over the life of the contract). If you look at how much the premiums are in regards to the amount of protection offered and the comissions generated let alone other costs, then they probably arent paying out more than 2% of the time (very rough estimate and these companies dont publish data that allows a real interpretation). Factor in that many/most of these arent likely permanent situations and you realize its not a high probability event.

Of course if you happen to be in whatever percent it is, you would prefer to have coverage in force. There isnt enough competition in this space to drive down costs. Group insurance is much cheaper but has too many holes in it. Individual still has tons of gray to it but better then group.
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Re: Medical Resident: When Should I Get Disability Insurance

Postby Deepsea » Sat May 11, 2013 8:49 pm

Please delete...changed my mind
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Re: Medical Resident: When Should I Get Disability Insurance

Postby TroutMD » Sun May 12, 2013 5:40 am

I bought it at the start of my final year of residency. I was moonlighting so my income had increased and I could easily afford it.

I have 10K DI/Month with own onc; it costs about $4400 per year with Mass Mutual.

I am not very pro insurance, but I do think this makes sense. If I can no longer be a doctor tomorrow, I am not sure what I would do. My goal is to carry this until we have 2-3+ million in retirement accounts and at that number I would likely drop it.
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