Medical Residents & Fellows
Considering Coverage During Training
Important Protection
Generally Better Health
With the exception of guaranteed standard issue programs, private disability insurance policies are generally medically underwritten, and an individual must be in fair health to qualify for coverage. Few medical conditions will exclude applicants from qualifying outright but many could warrant medical exclusions, a provision used by insurers to limit their exposure to specific pre-existing conditions in an insured’s medical history. Having coverage with an exclusion is better than not having coverage at all, but it is ideal to apply for coverage when one’s health doesn’t yet include any pre-existing conditions.
Lower Premiums
Easier Underwriting
Applying for disability insurance generally requires full medical and financial underwriting, which for many means providing tax returns, a medical history questionnaire and an in-person insurance medical exam. Although most applicants will still undergo full medical underwriting, medical residents and fellows can secure certain levels of coverage without any financial underwriting or in-person insurance medical exams. Applying during residency or fellowship can make it easier to qualify for coverage.
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Three Mistakes to Try Avoiding
Overlooking Guaranteed Standard Issue (GSI) Offers
Applying for disability insurance typically requires applicants to undergo medical underwriting, a process in which the insurance company reviews your entire medical history to evaluate the risk of insuring you and determine the policy terms and pricing they are willing to offer you.
Guaranteed Standard Issue (GSI) Offers simplify the application process and reduce the risk of being denied or offered modified coverage by allowing medical residents and fellows at select institutions to apply for disability insurance without having to share past health-related information.
Best of all, GSI Offers still allow eligible medical residents and fellows to secure competitively priced and comprehensive policies including the same discounts and policy features and riders offered with non-GSI policies.
Assuming Disability Insurance is Too Expensive
It’s easy for medical residents and fellows to discount the benefit of securing disability insurance because they feel it will be unaffordable. Budgeting can be challenging for medical residents and fellows, and we understand that finding affordable disability insurance is crucial to protecting your future without breaking the bank.
Having some coverage is better than not having any coverage at all. Although insurance companies offer medical residents up to $5,000 in monthly benefit and medical fellows up to $7,500 in monthly benefit, many insurance companies also allow policies to be initiated with as little as $2,500 in monthly benefit, while still including benefit increase riders that allow for benefit increases in future years.
Securing a policy under Graded premiums (start out low but increase yearly), opposed to Level premiums (remain level until age 65), can reduce the initial cost of securing a policy by as much as 50-60% in some cases. This can provide significant cost savings during the initial stages of a physician’s career when income is generally lower and then allow you to switch to level premiums in later years, once attending-level earnings are reached.
Initiating a policy with lower benefits and a graded premium is much better than not being protected at all.
Choosing a Policy Without Understanding Your Options
Not all disability insurance policies are created equally and we feel that the process of purchasing one deserves some due diligence. A thoughtful conversation with a knowledgeable broker who’s willing to serve as an educator can help ensure you make the best decision for you.
While these policies do contain technical language and multiple moving parts, a clear explanation with context can make the important factors and differences easy to grasp, allowing consumers to make informed decisions. Focusing exclusively on pricing or relying on overly simplified spreadsheets that some brokers use can be misleading.
Important Features
Benefit Period Payable to Age 65
The benefit period is the longest period of time benefits will be paid for a continuous disability, and should be “to age 65”. Longer benefit periods exist, but may not be best for those who are price sensitive.
Non-Cancelable & Guaranteed Renewable
The insurance company cannot cancel your policy, increase your premiums or change your policy provisions until policy expiry, except for nonpayment of premiums.
True Own-Occupation Definition of Total Disability
When an injury or sickness prevents you from performing the material and substantial duties of your occupation, even if you are gainfully employed in another occupation.
Partial / Residual Disability Benefits
When an injury or sickness causes you to experience a 15% (20% with some companies) or greater loss of income while you are still working in your occupation.
Benefit Increase Options
An optional rider that allows the insured to increase their monthly benefit as their income increases, without being required to disclose updated health information to the insurance company.
Cost of Living Adjustments
An optional rider that adjusts your monthly benefit throughout a long-term disability claim to help keep pace with inflation. This rider is generally recommended for young professionals.
