Purchasing disability insurance during medical residency is a smart idea for young physicians. Obtaining coverage during training allows one to benefit from better health, lower premiums and less financial documentation. Most of the top insurers providing high quality coverage for physicians today have special limit programs that allow residents and fellows to obtain disability insurance KY based on their level of training rather than their current income. This is advantageous for young physicians but only if the planning is done properly.
As a medical resident or fellow, you are likely to be in practice for over 30+ years, and likely will also maintain your dis-ability income coverage that long as well. It is therefore critical to be certain that the policy you purchase provides high quality income protection. Below are three questions that young physicians should ask before purchasing a Disability insurance policy.
The factor of age is simple - every year you delay purchasing Dis-ability insurance will cost you about a 4% increase in premiums. In other words, the cost of coverage will increase by about 3-4% each year you wait. If a Dis-ability policy will cost $1,000 per year today, in three years your premium will likely be about $1,125. Since Dis-ability insurance can be designed to maintain a level premium for the duration of the policy life, it is beneficial to purchase coverage at a young age in order to secure a lower premium, for your entire professional career.
The factor of health is a bit more complex than the average person would believe. The biggest risk a medical resident will run in not purchasing coverage today, is the discovery of an illness that may prevent him/her from qualifying for it in the future. However, there is also the risk of simply discovering a smaller medical condition that still allows one to purchase a Disability policy, but requires an exclusion.
Often referred to as modified own-occupation, this definition refers to a person totally dis-abled if he/she is unable to perform the material duties of his occupation solely because of illness or injury and must not be gainfully employed. The second and more reputable definition, known as true own-occupation, considers an individual totally dis-abled if solely as a result illness or injury, he/she is not able to perform the material duties of his/her occupation, even if he/she is employed in a different occupation.
Inflation can work against the value of your disability insurance payment. A cost-of-living adjustment, or COLA, added to your disability cover policy will adjust your benefits annually in order to keep pace with inflation.
In reviewing this provision, young physicians should be sure to also inquire as to the period for which this definition is applicable. Few insurers will offer a true own-occupation definition of total dis-ability with medical specialty language for the full benefit period. For medical residents and young physicians, it is advisable to obtain only a policy that will provide this definition for the full benefit period.
Does this policy include the necessary riders for my circumstances and future? There are many optional policy riders that can be included in one's dis-ability insurance contract. Policy riders are enhancements that aid in protecting against some additional level of risk associated with experiencing a long-term dis-ability. Young physicians that consider purchasing coverage during medical residency should be aware of three specific riders to include in their policy.
As a medical resident or fellow, you are likely to be in practice for over 30+ years, and likely will also maintain your dis-ability income coverage that long as well. It is therefore critical to be certain that the policy you purchase provides high quality income protection. Below are three questions that young physicians should ask before purchasing a Disability insurance policy.
The factor of age is simple - every year you delay purchasing Dis-ability insurance will cost you about a 4% increase in premiums. In other words, the cost of coverage will increase by about 3-4% each year you wait. If a Dis-ability policy will cost $1,000 per year today, in three years your premium will likely be about $1,125. Since Dis-ability insurance can be designed to maintain a level premium for the duration of the policy life, it is beneficial to purchase coverage at a young age in order to secure a lower premium, for your entire professional career.
The factor of health is a bit more complex than the average person would believe. The biggest risk a medical resident will run in not purchasing coverage today, is the discovery of an illness that may prevent him/her from qualifying for it in the future. However, there is also the risk of simply discovering a smaller medical condition that still allows one to purchase a Disability policy, but requires an exclusion.
Often referred to as modified own-occupation, this definition refers to a person totally dis-abled if he/she is unable to perform the material duties of his occupation solely because of illness or injury and must not be gainfully employed. The second and more reputable definition, known as true own-occupation, considers an individual totally dis-abled if solely as a result illness or injury, he/she is not able to perform the material duties of his/her occupation, even if he/she is employed in a different occupation.
Inflation can work against the value of your disability insurance payment. A cost-of-living adjustment, or COLA, added to your disability cover policy will adjust your benefits annually in order to keep pace with inflation.
In reviewing this provision, young physicians should be sure to also inquire as to the period for which this definition is applicable. Few insurers will offer a true own-occupation definition of total dis-ability with medical specialty language for the full benefit period. For medical residents and young physicians, it is advisable to obtain only a policy that will provide this definition for the full benefit period.
Does this policy include the necessary riders for my circumstances and future? There are many optional policy riders that can be included in one's dis-ability insurance contract. Policy riders are enhancements that aid in protecting against some additional level of risk associated with experiencing a long-term dis-ability. Young physicians that consider purchasing coverage during medical residency should be aware of three specific riders to include in their policy.
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