As a resident physician, you’re helping to ensure that patients continue to have access to the medical care they need. You’re also creating a rewarding career for yourself. Unfortunately, life doesn’t always go as planned. There’s a possibility that an illness or injury will cut your promising career short. Disability insurance for resident physicians provides important protection.
If you’re anything like the typical resident doctor, you probably have a lot of student loan debt. The Education Data Initiative says that the average medical school graduate owes $241,600.
You’re also working hard. The Accreditation Council for Graduate Medical Education (ACGME) uses duty hour standards that include an 80-hour weekly limit average over a four-week period. That’s the equivalent of two regular full-time jobs.
You do all of this for a fairly modest salary. The 2021 AAMC Survey of Resident/Fellow Stipends and Benefits shows that the average annual stipend for residents in their first program year is $59,279.
Because you’re not earning much yet, you might think that there are better uses for your hard-earned cash than disability insurance premiums. However, for most resident physicians, it makes sense to purchase disability insurance as a resident doctor.
You haven’t realized your full income potential yet, but you still have a decent salary that’s worthy of disability income protection. If you could no longer work as a doctor because of a disability, you’d still have medical student loans and other bills to pay. A disability policy can help you achieve financial security.
If you’re young and healthy, you can lock in good disability rates now, and as a resident, you may qualify for discounts. If you wait, you might end up with higher monthly premiums, and you could even be denied coverage based on pre-existing conditions.
Your income will increase dramatically after you finish your residency program and start a new job as a fully licensed doctor. With a future increase option rider, you can increase your disability benefits without undergoing additional medical underwriting.
You might think that you don’t need to worry about disability yet, but even promising young doctors aren’t immune to things like cancer and car accidents. Consider these stats. Purchasing disability insurance as soon as possible means you’ll be protected no matter what.
When people talk about disability insurance, they can be referring to a number of different programs and policy types. The differences can be substantial.
This might seem confusing, but you don’t have to choose between these options. You can purchase individual disability insurance to make sure you’re covered. If you’re offered long term disability insurance and/or short term disability insurance through your work, you can sign up for that, too.
Social Security Disability Insurance is a federal program. It’s funded via payroll taxes, and many people assume that because they’re paying into the program with every paycheck, they’ll be covered if they are ever unable to work because of a disability. Unfortunately, this isn’t always the case. SSDI has very strict eligibility requirements, and most applications are rejected. The benefits also tend to be modest.
Short term disability insurance is sometimes provided by employers. It’s usually not portable, meaning that if you leave your job, you’ll also lose your benefits. It’s designed to cover temporary disabilities, and the disability benefit period might only last for three to six months.
Long term disability insurance is sometimes provided by employers as well. It has a longer benefit period and may offer group rates. However, these policies aren’t typically portable, and you might not be able to customize the disability insurance terms to meet your needs.
Individual disability insurance is long term disability coverage that’s purchased by the individual. It’s fully portable, so you can keep your coverage when you leave your residency program, change healthcare facilities or open your own practice. You can also customize the coverage terms to meet your needs.
Individual disability insurance policies can be customized to your needs. This is a good thing, but it means that there are a lot of different policy terms that you need to consider. Different disability insurance companies will offer different terms, so you need to find the right match for your specific needs.
Here are the things you should ask when you’re comparing the features of disability insurance policies:
Some policies use what’s known as an any occupation definition of disability. These policies can be less expensive, but they only pay disability benefits if you can’t work in any occupation that is reasonably suitable for you. The alternative is an own occupation definition, which provides a payout if you can no longer work in your regular occupation. With a true own occupation definition, you can continue to receive benefits even if you take a job in another profession. This is important when looking at disability insurance for physicians because some disabilities might prevent you from working in the demanding medical field even if you can still work in other jobs that don’t pay nearly as well.
Disability insurance policies replace a percentage of your income, but some policies provide a higher percentage than others. Also pay attention to monthly benefit caps that can limit the amount you receive.
This is important for resident doctors. With a benefit increase rider or future purchase option, you retain the right to raise your monthly benefit amount based on increases in your income.
The elimination period, also called the waiting period, is how long you need to wait after a disability before you can start receiving benefits. A shorter elimination period means you’ll start receiving benefits faster but selecting a longer elimination period can reduce your monthly premium, so this can be a good way to adjust your costs.
This is how long you can receive benefits. Some policies have benefit periods of a set number of years, but others provide benefits until you reach retirement age. Some disabilities are permanent, so this is a very important issue to consider.
A non-cancelable policy gives you the most protection because it means the insurance company cannot cancel your policy or raise your disability insurance premiums.
Riders can add additional benefits. Although riders can also raise the cost of disability insurance, the increased premium might be worthwhile if the added benefits fit your needs. Riders to consider include benefits that cover student loan payments, survivor benefits and cost of living adjustments.
