TL;DR: You need disability insurance as a resident, and we have access to a high quality and discounted policy listed below. If you’re a female-identifying resident/fellow, make sure to take advantage of the discounted unisex rates before they are eliminated in April 2023 (with a 30 day grace period if you apply before April 1).
What is disability insurance? Why is it important? Do we need to buy it in residency? Where do we buy it? Disability insurance is one of the more complicated kinds of insurance you’ll need to purchase during your life. This introduction will give you an overview of disability insurance, links to additional reading, and information about a high-quality insurance plan we have discounted access to as UW residents and fellows.
You want to make sure you have disability insurance because if you become disabled and can no longer work as a physician in your specialty of training, disability insurance protects against loss of your future earnings. Since it is impossible to know if or when this could happen, and since you’ve invested an immense amount of time, money, and effort into your medical training, it’s better to obtain disability insurance earlier rather than later to protect that investment and your livelihood. It’s important to note that premium prices increase as your age increases, and you may not be insurable if you develop a medical condition or disability before you apply for insurance. Furthermore, disability insurance may provide payments for student loans if you were to become disabled. Since this insurance can be expensive, we recommend buying a small policy as early as possible in residency, which can then be upgraded as you leave residency or fellowship.
Disability insurance should be purchased from an independent agent. These agents have the ability to compare and sell policies from different insurance companies. They won’t have as big of an incentive to sell you a policy from one specific company over another compared to agents who work directly for a given company. The most important aspect of the policy you purchase is that it has a strong definition of disability and covers a very broad range of possible disabilities. It should also be “own occupation” and “specialty specific”. This means that if you were unable to perform the duties of your particular specialty, you would still receive disability benefits even if you were able to make an income in a different specialty/occupation. For example, if you had trained as a neurosurgeon and became disabled such that you could no longer practice as a neurosurgeon but could earn an income as a psychiatrist, you would still receive disability benefits for not being able to make a neurosurgeon’s income.
Importantly, there are only a handful of insurance companies that offer strong “own occupation” disability insurance. These include The Standard, Guardian/Berkshire, Principal, Ameritas/Union Central, Mass Mutual, and Ohio National. Disability insurance policies from other companies will have weaker definitions of disability, and we do not recommend purchasing them.
We want to make sure that everyone is aware of a high-quality insurance plan we have discounted access to as UW residents and fellows. This is a GSI (Guaranteed Standard Issue) plan through Ameritas, and we receive a 20% discount on our premiums. This insurance plan is own-occupation, specialty-specific, and has a very strong/broad definition of disability. It also offers unisex rates, which is particularly beneficial for female-identifying residents and fellows as they may be charged up to 40% more than their male-identifying counterparts for similar disability insurance. We want to make sure all female-identifying residents/fellows are aware that these unisex rates will be going away in April 2023, so make sure to purchase your policy before then. As residents, we can purchase a policy for up to $10,000 in monthly benefits, and increase this to $10,000/mo (soon to be 15k/mo) in our graduating year. As an FYI, if you’re shopping around for different plans, be sure to look into this GSI plan before undergoing medical underwriting (i.e. releasing your medical records to an insurance company) for a different insurance policy, as that process may preclude your eligibility for the GSI plan. Bill Conroy is the independent agent to reach out to regarding this plan – he can be called at 206.949.1045 or emailed at email@example.com.
Here is a list of some changes to expect in the new policy if not applying/renewing before April 1, 2023:
- GSI Maximum monthly benefits increase from $10,000 to $15,000 regardless of PGY (exiting or non-exiting)
- Sex-distinct premiums (decreasing for male-identifying, increasing for female-identifying)
- COLA rider will now calculate change of benefit on a compound basis (vs simple basis) at 3%
We hope this overview helps you navigate the unintuitive landscape of disability insurance. To read more about the specifics of disability insurance, which riders/components are important, and a list of other reputable, independent disability insurance agents, check out the links below:
- https://www.whitecoatinvestor.com/what-you-need-to-know-about-disability-insurance/ (some of our board members have had positive experiences working with Larry Keller, one of the recommended independent agents)