When you’re a busy doctor-in-training with a demanding schedule, shopping for resident disability insurance may not be at the top of your priority list. But now is actually the best time to do it!
In my conversations with residents and fellows, I hear three main reasons for not buying resident disability insurance:
I can’t stress enough that there are major advantages to taking the time to secure your disability insurance policy now. In fact, your goal should be to get as much coverage as you can afford today.
1. You’ll likely get much better disability insurance coverage now than later.
If you’re thinking of waiting to get insurance through your job, be aware that employer-provided group policies are often far inferior to plans you can purchase on your own.
Their main drawback is the limitations they place on coverage. Since employers have to offer them to everyone, they need to find ways to cut costs.
Additionally, the policy language is not standardized and is often confusing. You can easily end up in a tragic situation where you don’t get the benefit you were counting on, or your benefits are reduced.
Back when I became an attending, I made the mistake of not reading the fine print in my group insurance policy. I was shocked to learn that it did not cover work-related injuries, like the one that left me unable to do my job as an OB/GYN. Sadly, I continue to see this language in many group policies today.
2. Unlike group plans, you can take an individual disability insurance policy with you.
Most group benefits are employment-dependent. So if you leave your job, you can’t take your insurance with you. On the contrary, individual plans stay with you no matter your current employment situation, providing both coverage and peace of mind.
3. Age and health factor into the cost of your disability insurance coverage.
As you get older, your insurance costs go up. And none of us are getting any younger, right? Plus, the healthier you are, the fewer policy exclusions you should have.
So if you’re able to secure a strong policy when you’re young and healthy, go ahead and lock in that rate! You’ll reap the savings over the long run.
4. Most residents and fellows qualify for about the same amount of disability insurance coverage.
When you’re in training, the application process is more generalized. Insurance carriers typically don’t look at how much money you make, and they don’t worry about what group benefits you already have. Everybody qualifies for about the same amount of coverage. It’s the carriers’ way of getting and keeping you as a long-term customer.
You also may qualify for more coverage when you’re in training than you would out of training. When you become an attending, the game changes. How much you qualify for is determined by internal algorithms that look at how much money you make, what benefits you receive from your employer, and who pays for those benefits.
When I was a resident, I didn’t know any of this. So I waited to get insurance as a first-year attending. I didn’t qualify for as much coverage as I would have as a resident, and it was more expensive. Some things have changed since I became an attending. Now, the carriers offer a special starting practice limit if you have recently graduated or are within 1 or 2 years of your first position, which is similar in design to the trainee packages.
5. There are big tax benefits to having an individual disability insurance policy.
In general, if your employer pays for your group benefits, the proceeds are considered taxable income. If you’re paying for the insurance yourself, the money comes to you tax-free. This is reason alone to look into an individual plan.
6. Carriers offer special discounts on disability insurance to residents and fellows.
If you wait until you’re an attending, you won’t get the discounts that residents and fellows often have available to them.
The discounts depend on the carrier, but they can make a difference of anywhere from 10% to 40% in the amount you pay!
At PearsonRavitz, we understand the demands of residency, and the risks involved. Disability insurance is one of the ways to protect yourself from unexpected injuries. Start the process of getting resident disability insurance now by clicking below.