Disability insurance

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Topic Author
Mbmd
Posts: 6
Joined: Tue Jul 09, 2019 10:11 pm

Disability insurance

Post by Mbmd » Fri Jul 31, 2020 3:32 pm

Thanks in advance for all the wisdom. I think I know the answer but I’m in need of some clarity

I have a disability insurance with guardian that I pay $450/month for a 10K/month benefit of fully disabled.
This is an “own occupation policy”. I am in good health.
I got very sick with covid and was glad I had recently increased my life insurance but was a little nervous about my disability insurance

If disabled, 10 K a month would cover my expenses. It would not cover other savings such as my kids 529s, retirement savings. I would have to definitely adjust and reduce my current expenses.

I can buy an additional 5k for a total of 15k/month for $670 monthly.

I understand that every situation is different.


Does it sound reasonable to spend $670 monthly? That’s like an expensive car payment! I can afford it but I could also readjust my lifestyle and live on 10k

What are your thoughts?


Thanks and stay safe everyone!!!

Just curious on everyone else’s thoughts

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ResearchMed
Posts: 10365
Joined: Fri Dec 26, 2008 11:25 pm

Re: Disability insurance

Post by ResearchMed » Fri Jul 31, 2020 3:40 pm

Mbmd wrote:
Fri Jul 31, 2020 3:32 pm
Thanks in advance for all the wisdom. I think I know the answer but I’m in need of some clarity

I have a disability insurance with guardian that I pay $450/month for a 10K/month benefit of fully disabled.
This is an “own occupation policy”. I am in good health.
I got very sick with covid and was glad I had recently increased my life insurance but was a little nervous about my disability insurance

If disabled, 10 K a month would cover my expenses. It would not cover other savings such as my kids 529s, retirement savings. I would have to definitely adjust and reduce my current expenses.

I can buy an additional 5k for a total of 15k/month for $670 monthly.

I understand that every situation is different.


Does it sound reasonable to spend $670 monthly? That’s like an expensive car payment! I can afford it but I could also readjust my lifestyle and live on 10k

What are your thoughts?


Thanks and stay safe everyone!!!

Just curious on everyone else’s thoughts
Hope you are feeling better!

To answer, it would help (a lot) to know more: what is your age, the children's ages, is there a working spouse, what is your current total income, and... how much do you have saved already in various categories (tax-deferred, taxable, totals in those 529s, and also other assets such as rental property or major fine art, etc.)?

And if that "md" at the end of your UserID means you are a physician, we are among the many who are deeply indebted to you for taking risks to help care for us, especially these days!

RM
This signature is a placebo. You are in the control group.

MedSaver
Posts: 97
Joined: Sun Jul 02, 2017 5:33 pm

Re: Disability insurance

Post by MedSaver » Fri Jul 31, 2020 3:42 pm

These prices are right in line with what I’m paying ($13k monthly benefit for $500/mo). Whether or not it’s “worth it” is highly personal.

TechFI
Posts: 128
Joined: Fri Jun 05, 2020 12:07 am

Re: Disability insurance

Post by TechFI » Fri Jul 31, 2020 3:51 pm

Mbmd wrote:
Fri Jul 31, 2020 3:32 pm
Thanks in advance for all the wisdom. I think I know the answer but I’m in need of some clarity

I have a disability insurance with guardian that I pay $450/month for a 10K/month benefit of fully disabled.
This is an “own occupation policy”. I am in good health.
I got very sick with covid and was glad I had recently increased my life insurance but was a little nervous about my disability insurance

If disabled, 10 K a month would cover my expenses. It would not cover other savings such as my kids 529s, retirement savings. I would have to definitely adjust and reduce my current expenses.

I can buy an additional 5k for a total of 15k/month for $670 monthly.

I understand that every situation is different.


Does it sound reasonable to spend $670 monthly? That’s like an expensive car payment! I can afford it but I could also readjust my lifestyle and live on 10k

What are your thoughts?


Thanks and stay safe everyone!!!

Just curious on everyone else’s thoughts
Jesus Christ! I just posted about my DI woes just below yours. If you can increase your DI policy TAKE IT. What are you waiting for? Have you seen my situation? I earn $250k and only have $50k DI because of all the shenanigans they are throwing at me preventing me from increasing my limit.

Topic Author
Mbmd
Posts: 6
Joined: Tue Jul 09, 2019 10:11 pm

Re: Disability insurance

Post by Mbmd » Fri Jul 31, 2020 4:47 pm

ResearchMed wrote:
Fri Jul 31, 2020 3:40 pm
Mbmd wrote:
Fri Jul 31, 2020 3:32 pm
Thanks in advance for all the wisdom. I think I know the answer but I’m in need of some clarity

I have a disability insurance with guardian that I pay $450/month for a 10K/month benefit of fully disabled.
This is an “own occupation policy”. I am in good health.
I got very sick with covid and was glad I had recently increased my life insurance but was a little nervous about my disability insurance

If disabled, 10 K a month would cover my expenses. It would not cover other savings such as my kids 529s, retirement savings. I would have to definitely adjust and reduce my current expenses.

I can buy an additional 5k for a total of 15k/month for $670 monthly.

I understand that every situation is different.


Does it sound reasonable to spend $670 monthly? That’s like an expensive car payment! I can afford it but I could also readjust my lifestyle and live on 10k

What are your thoughts?


Thanks and stay safe everyone!!!

Just curious on everyone else’s thoughts
Hope you are feeling better!

To answer, it would help (a lot) to know more: what is your age, the children's ages, is there a working spouse, what is your current total income, and... how much do you have saved already in various categories (tax-deferred, taxable, totals in those 529s, and also other assets such as rental property or major fine art, etc.)?

And if that "md" at the end of your UserID means you are a physician, we are among the many who are deeply indebted to you for taking risks to help care for us, especially these days!

RM
Thanks for your comment.

Yes, I am an MD and got sick taking care of patients with covid despite being paranoid and taking all the precautions.
I am extremely lucky to be recovering without any obvious complication.

I’m 38. Single income (400-500K). 2 kids 7/10. I have about 20k in each 529.
6 month EF in high yield savings at 1%
400k between 401K, 457, Vanguard investment account and HSA. 80/20

Debt:
House 675k (worth 800k)
Car loan 50k at 2%
Student loans: 45K to go!

I do have a work group DI, taxable. Not own occupation. 5k monthly benefit.


Currently spending $450 for 10k monthly benefit (non taxable, own occupation). It kills me to think I’d be spending $670/month but I have to be honest this covid situation got me pretty scared. Also, This increase in my DI is without a new physical exam or labs....

I could always drop it back to what I have now later on?


Let me know your thoughts. Thanks!

SpaghettiMonster
Posts: 49
Joined: Sun Oct 28, 2018 1:24 pm

Re: Disability insurance

Post by SpaghettiMonster » Fri Jul 31, 2020 6:13 pm

I am a very similar age with a similar income. My children are younger and my liabilities are less. I was able to get an own-occupation policy for $550/mo for a $15K monthly benefit. This is in addition to my group's DI plan which is a non-taxable $15K monthly benefit. Your group's policy seems to be on the low side. Are you in a more surgical or medical specialty? This would affect your rates.

In your particular situation, I would go for the increased benefit, especially with the unknowns about the long term effects of COVID. If you have the chance to increase your benefit without a new medical exam or labwork, then go for it. Are you aware whether you'd have to disclose your recent COVID history? Also, do you have recent (<1 year) paramed exam from when you increased your life insurance? If so, maybe you can use the results to get a more favorable DI rate.

I do like to be overinsured rather than underinsured though and I have been unfortunately proven that very unlikely things still do happen.

BruDude
Posts: 3349
Joined: Thu Dec 30, 2010 12:28 am
Location: Las Vegas

Re: Disability insurance

Post by BruDude » Sat Aug 01, 2020 3:48 am

Depending on your specialty I would say that $670/month for $15k/month in benefits is about average and it could be significantly higher. Depends on your benefit period/elimination period/optional riders/etc. I recently had a female neurosurgeon with $20k/month benefit that was quoted at $14-19k per year depending on the insurance company. That was one of the highest DI premiums I have seen though, very few cases are over $10k/year. My average DI client has a premium around $4000 but that's also including a lot of residents and fellows that haven't started practice yet so their benefit amount is only $5k/month.

If you can easily afford it which it sounds like you can, I would take it. Delaying the increase will only cost you more long-term. The $670 rate would be locked in through at least age 65, and waiting another few years will only increase that number since the cost of the increase is based at the age it is done.

Also keep in mind that when you exercise the rest of the FIO rider, the cost of the FIO rider will be eliminated, reducing the total cost of your base policy. That may reduce the overall cost to lower than $670/month, wasn't sure if you had factored that in already.

fasteddie911
Posts: 337
Joined: Fri May 16, 2008 3:13 pm

Re: Disability insurance

Post by fasteddie911 » Sat Aug 01, 2020 11:10 am

You could also consider shopping around for another carrier. When I shopped for DI guardian was far and away the most expensive carrier and they had a lot of bells and whistles on their plan that I didn't feel was worth the price difference.

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Stinky
Posts: 4734
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Disability insurance

Post by Stinky » Sat Aug 01, 2020 11:17 am

Just to be clear - the $670 per month would be your total premium? Not the increase from the additional $5k monthly benefit?

Right?
It's a GREAT day to be alive - Travis Tritt

Topic Author
Mbmd
Posts: 6
Joined: Tue Jul 09, 2019 10:11 pm

Re: Disability insurance

Post by Mbmd » Sat Aug 01, 2020 3:00 pm

Stinky wrote:
Sat Aug 01, 2020 11:17 am
Just to be clear - the $670 per month would be your total premium? Not the increase from the additional $5k monthly benefit?

Right?
Correct. That would be $670 total for a 15K monthly benefit

User avatar
Stinky
Posts: 4734
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Disability insurance

Post by Stinky » Sat Aug 01, 2020 3:20 pm

Mbmd wrote:
Sat Aug 01, 2020 3:00 pm
Stinky wrote:
Sat Aug 01, 2020 11:17 am
Just to be clear - the $670 per month would be your total premium? Not the increase from the additional $5k monthly benefit?

Right?
Correct. That would be $670 total for a 15K monthly benefit
Then I’m with the others who have responded. Your offer sounds good to me.
It's a GREAT day to be alive - Travis Tritt

NYCaviator
Posts: 104
Joined: Sat Apr 09, 2016 5:06 pm
Location: NYC

Re: Disability insurance

Post by NYCaviator » Sat Aug 01, 2020 5:36 pm

The group disability insurance for your practice isn’t own occupation? How much does it cover of your salary? If I recall correctly when we did this I could only purchase enough to cover 75% of salary. Is that guardian policy above and beyond your group policy?

If you are a single income household, I wouldn’t hesitate to do it. Worth the peace of mind.

tj
Posts: 3060
Joined: Thu Dec 24, 2009 12:10 am

Re: Disability insurance

Post by tj » Sun Aug 02, 2020 1:45 pm

fasteddie911 wrote:
Sat Aug 01, 2020 11:10 am
You could also consider shopping around for another carrier. When I shopped for DI guardian was far and away the most expensive carrier and they had a lot of bells and whistles on their plan that I didn't feel was worth the price difference.
What carrier did you end up with?

SpaghettiMonster
Posts: 49
Joined: Sun Oct 28, 2018 1:24 pm

Re: Disability insurance

Post by SpaghettiMonster » Sun Aug 02, 2020 2:02 pm

I had a MassMutual policy which I recently discovered after really reading the documents, was not an own occupation policy. It was sold to us by our advisor (who we no longer use). I switched to an Ameritas policy. I received quotes from the Big 5. Comparing MassMutual to Ameritas apples to apples, I wound up saving >$200/mo.

fasteddie911
Posts: 337
Joined: Fri May 16, 2008 3:13 pm

Re: Disability insurance

Post by fasteddie911 » Mon Aug 03, 2020 10:30 am

tj wrote:
Sun Aug 02, 2020 1:45 pm
fasteddie911 wrote:
Sat Aug 01, 2020 11:10 am
You could also consider shopping around for another carrier. When I shopped for DI guardian was far and away the most expensive carrier and they had a lot of bells and whistles on their plan that I didn't feel was worth the price difference.
What carrier did you end up with?
Principal.

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