Resident Physician Disability Insurance

As a medical student, residency is a critical stage of your career that moves you a step closer to fulfilling your long-term dream of becoming a practicing medical professional. You have invested energy, time, and money to get to this point, and in a few years or months to come, you will become a licensed medical doctor with high prestige and financial freedom.

Unfortunately, due to the many uncertainties of life, a disabling illness or accident can knock your career trajectory off balance, and cause untold hardship and setback. Every 7 seconds, at least one American of working age suffers a disabling injury or illness. The study further showed that 25% of today’s young adults in their 20s will become disabled at some point in their careers. To be on the safe side, you will need to insure yourself with a disability insurance policy.

Resident Physician Disability Insurance
What is Disability Insurance

What is Disability Insurance

Disability insurance is a contract between an insured and an underwriter, which provides you with a regular income if you become disabled. This can protect both you and your family in the event that you are no longer able to practice as a physician due to your disability.

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Why You Should Buy Disability Insurance as a Resident Physician

While many resident physicians understand the need for disability insurance, the question remains: why should I buy now? The reality is that buying disability insurance during your residency has a lot of benefits.

The most important reason is that buying your policy at a young age means you are going to enjoy a less expensive premium rate. As a general rule, the older you get, the more medical history you build up, and medical history is such a significant determinant in the disability insurance world.

Young adults are typically considered to be in good health, which allows them to enjoy a less expensive premium rate compared to older age groups. You will get to save a lot of money on your policy if you buy it now as a resident rather than waiting until you begin your full practice.

Several studies have revealed that today’s fresh medical college graduates are faced with more financial burdens than ever before in American history. With about $190,000 of medical school debt for an average American resident physician, buying a disability insurance coverage at this stage of your career will go a long way in protecting you and your family from a sudden loss of income.

Discounts are availble for disability insurance policies through certain companies when signing up as a group of 3 or more. Disability insurance companies vary with their discounts.

Why You Should Buy Disability Insurance During Residency

Understanding Group vs. Individual Disability Insurance Policy

Many resident physicians prefer to wait until the end of their residency to get disability insurance from their employer, which is known as group disability insurance policy.

Group disability insurance is usually guaranteed issue, meaning you cannot be denied coverage based on pre-existing conditions. Its premium amount is also less expensive and sometimes paid for by employers. The downsides, however, are that it offers limited benefits and it is usually not portable. This means that you may lose the policy the moment you leave the employment through which you bought it.

Individual disability insurance, on the other hand, is bought directly from an insurer or through a licensed broker. It is far more advantageous than group policy for the following reasons:

Portability

An individually-purchased policy is wholly owned and controlled by you. As long as you keep paying the premium, you can hold on to it after your residency and continue to enjoy it during practice. As such, you won’t need to purchase a new policy, which might require another medical exam.

Another advantage of having a portable individual disability insurance coverage is that insurance statutes vary widely among different states. If you buy your policy in a state with low premium rates during your residency, you will be able to continue enjoying coverage should you move to another state that might require a higher premium rate if you’re buying a new policy.

Flexibility

Individual disability insurance has many options that allow you to review your coverage plan periodically. Premium rates and disability monthly coverage are two essential features of disability insurance, a group policy offers quite limited options in that regards.

However, with an individual plan, you will be given many options called riders, which allows you to adjust your policy you get to the peak of your career. Some of the essential riders you will get to enjoy include own-occupation, cost of living, and future increase riders.

Disability Insurance Terms You Should Know About

Many resident physicians prefer to wait until the end of their residency to get disability insurance from their employer, which is known as group disability insurance policy.

Group disability insurance is usually guaranteed issue, meaning you cannot be denied coverage based on pre-existing conditions. Its premium amount is also less expensive and sometimes paid for by employers. The downsides, however, are that it offers limited benefits and it is usually not portable. This means that you may lose the policy the moment you leave the employment through which you bought it.

Individual disability insurance, on the other hand, is bought directly from an insurer or through a licensed broker. It is far more advantageous than group policy for the following reasons:

Short-Term Disability Insurance

A short-term policy, as the name implies, is designed to cover you for a short period of time if you become disabled. The coverage may range from three months to one year. It is usually underwritten with a very short elimination period, which allows you fast access to benefit payments if you become disabled.

Long-Term Disability Insurance

Long-term coverage offers a more robust and longer period of coverage. Depending on the plan you choose, you may get a policy that will keep paying you disability benefits for as long as five years, ten years, or sometimes even until retirement. This is more expensive than short-term, however, if you are looking at the bigger picture (i.e. beyond the residency stage and through to your retirement) long-term policy remains a better option if you can afford it

As a resident physician, your current low income may limit the amount of coverage you’d like to have. However, you can later augment the policy to meet your needs. All you have to do is to ensure you enhance it with a future increase option, which allows you to increase coverage annually as your income steadily rises and more responsibilities are added.

Disability Insurance Terms You Should Know About

Own-Occupation

After your residency, you are likely going to be fully invested in your chosen specialty. This is why you need an own-occupation disability insurance policy. This product means that, if you become disabled and are unable to perform your specialty occupational duties, you’ll be qualified for disability coverage payments regardless of whether you find a job under another medical specialty or another profession.

Cost of Living Adjustment

Cost of Living Adjustment, or COLA, is another optional add-on to your disability insurance policy. It allows a yearly review of your disability insurance benefit payment to ensure it keeps pace with inflation rates. With this option, you receive a higher coverage amount to ensure whatever benefit you receive is in tune with the Consumer Price Index (CPI).

Can A Resident Physician Afford Disability Insurance Premium Payments

This is one of the most frequently asked questions by medical residents when it comes to individual disability insurance. As a resident doctor who is still relatively fresh from college, we understand that you may have a large student loan that you are responsible for.

Due to this, many life insurance providers offer customized disability insurance policies for resident physicians with graded options. A graded disability insurance policy starts with a low premium amount and increases yearly as you get to the peak of your career.

Can A Resident Physician Afford Disability Insurance Premium Payments

How Gold Coast Life Insurance Can Help

At Gold Coast Life Insurance, we know that insurance isn’t a one-size-fits-all situation. We will sit down with you and discuss your medical career stage as well as your income before getting you a disability insurance policy that will be specially underwritten to meet both your short-term and long-term needs.

Regardless of your health status, you can always count on us for a nondiscriminatory service; we accept high-risk clients with any forms of pre-existing conditions. Getting your resident physician disability insurance policy from us today is as simple as filling this free quote.

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