By Jamie K. Fleischner, CLU, ChFC
President, Set for Life Insurance
The countdown is on! In addition to your other responsibilities (signing contracts, preparing to move, studying for boards, etc…), taking care of purchasing your disability insurance should also be on your list.
By now you already know the importance of protecting your future income and know that sooner or later you will need to purchase your own individual policy. But when is the ideal time to buy?
The final 180 days of training opens a window of opportunity when it comes to purchasing your disability insurance policy. Here is a guide to help you.
If you are in a surgical specialty, you may purchase between $5000/month and $7500/month benefit regardless of income or group benefits in force (depending on the company). Purchasing a larger amount may allow you to lock in more at a discounted rate. Carrying a larger amount is beneficial if you don’t yet have a job or if you do have a job that has a large group disability benefit. You can essentially over insure yourself before your income increases.
If you are a woman and have access to discounts, you may save up to 55% on your disability insurance not just now, but on future increases as well.
If you are concerned about taking on a lot extra premium at this time, you may consider purchasing a smaller policy such as $1000/month. Make sure it is the type of policy that will allow you to increase it substantially, up to $15,000/month. Some companies only allow you to increase up to $4000/month if your base policy is $1000. The advantage of locking in a smaller policy is to protect your insurability (ability to purchase future benefits without more medical questions) and to lock in discounts.
If you think your income will be greater than $15,000/month benefit, you may want to consider purchasing benefits from more than one company. This will allow you to be pre-approved for up to $25,000/month benefit in the future. Blending benefits is also beneficial as you may coordinate your underwriting and only conduct one paramedical exam.
If you are unsure of your future job or think you may be doing locum tenens work, obtaining your policy ahead of time is ideal since the companies do not require financial verification. If you wait to apply after you graduate, you may have difficulty being approved without proof of income.
For more information about medical resident disability insurance, contact Set for Life Insurance today!
