Disability insurance for military doctors

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DaveB

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This has been mentioned briefly on this forum before, but never talked about specifically - I never gave it much thought, but as I get ready to graduate from medical school it's a topic that has come up more than a few times....

I seem to remember people droping negative comments about this in the past - how much does the military cover with their disability insurance? Should I look into getting my own coverage? Is this even a possibility while being in the military? What is everyone's experience with this?

Thanks in advance.

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I wondered about this myself. I think everyone should consider investing in a private insurance as well anyways. I know a guy who bought extra disability insurance right after medical school. As he was finishing his residency three years later he began having problems and was quickly diagnosed with some pretty bad Crohn's disease. He really can't work much. I believe he works about two 6 hour work days a week, the extra insurance though has kept him pretty comfortable.....and its pretty cheap.
 
Here is the deal of DI. There are 2 different types. Group policies vs Individual polices.

Individual policies are the ones that you buy for yourself with after tax dollars, which will give you tax free benefits.

Group policies are just that...polices offered by a "group", and the military offers its own, which are before tax dollars where you benefits are usually taxable.

So, once you become active duty, you automatically have Military group disability policy which SUCKS!!! The benefits do not take into account of your bonusus which make up more than half your pay...depending on what your specialty is.

Also, the policy is not "own occupation".....you get whatever percent disability based on a medical board which uses a formula to determine how much benefit you get. So let say you are an opthalmologist and you injure your hands in such a way that you cannot operate anymore......with and "own occupation" policy, you are considered disabled and receive your benefits.....well with a military policy, they will say ....well you can be a GMO and do sick call than....and get no DI benefit...or they kick you out and give you a pittance....


So you say, I'll just buy my own Individual policy, well most companies will not underwrite you for full coverage if you already have a group policy in place, so if you are active duty, you already have a group policy, so you CAN'T buy what you need.
 
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Anyone know of individual DI policies for military physicians?
 
Anyone know of individual DI policies for military physicians?

The only own-occupation policy I'm aware of that's open to members of the military is the one through the AMA. They will not sell more than $2500/month in benefits to people on active duty.

It's dirt cheap though, especially if you choose a long elimination period - which you can, because the military's not going to stop paying you the day after you get hurt.

I spent some time arguing with the other big providers of own-occ policies, trying to explain that unless I'm deployed, I'm at no more risk of injury than any other physician, but they still weren't interested in insuring me. So all I have is my AMA policy - own-occupation, $2500/month benefit, 12 month elimination period, 5 years of total benefits. Was 34 when I got the policy, nonsmoker, healthy. $186 per year. (With a 2-month elimination period I think the premium was around $500/year.)

That's the best I think military doctors can get in own-occupation disability coverage.
 
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Could you give a little perspective as to the kind of numbers a civilian doc would have? those numbers you said sound pretty meager.


This is definitely a valid discussion to have. I'm curious if the other AD docs wouldnt mind weighing in and sharing what kind of coverage they have.
 
It is meager, and it annoys me, since there is no rational reason to deny higher coverage to active duty people. I'd have been absolutely happy to sign a "we don't pay if you get shot in Iraq" clause.

5 years of payments x $2500/month = $150K total benefit. Not much, but the premium is low ... and it's the only thing on the menu for AD physicians AFAIK.


Last time I talked to one of the civilians here, I was led to believe that his group's cost for his own-occ policy that paid $10K/month through age 60 (I think) was around $10K/year in premiums. I can't swear those #s are accurate though.


I'd also like to hear if other military physicians know of other own-occ DI that we can get.
 
I've got a policy I bought as a civilian resident while deferred, it costs me about 3% of the monthly payout as a premium each month. 90 day wait, true own occ etc. A good policy. $3500/month. No one would sell me any more while on active duty. I'm in the market now as I prepare to separate and prices for a good policy are around 4% of the monthly payout as a premium, again, top quality policies.

I do believe the guy I'm working with found a way to buy a policy for active duty folks, but I can't remember exactly how he did it. I meet with him soon and I'll let you know.
 
I got a small policy with Northwestern mutual. I got this at the beginning of my deferred residency. It's a 1000/month policy. The own occ clause doesn't seem that good. If you're gainfully employed, the benefit gets reduced by what you make. So, if I make more than $1000/month at McDonald's, I don't get anything. A bit frustrating.

Good thing we get those sweet VA benefits. . :rolleyes:
 
Berkshire is writing policies for active duty military docs, without a war clause. If I had known this a few years ago I would have gotten one. Now that I'm about to separate, I'm looking at a little less expensive policy (the Berkshire one is the "primo" one).
 
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Berkshire is writing policies for active duty military docs, without a war clause. If I had known this a few years ago I would have gotten one. Now that I'm about to separate, I'm looking at a little less expensive policy (the Berkshire one is the "primo" one).

i got one thru axa (actually met life is the insurer). i pay a little more than normal, but they dont care that im deferred and will be AD in 18 months. northwestern sucks. they were willing to insure me but only to a benefit fo 1000/month b/c i was going to be AD and i would've paid 900/yr for that thousand. I pay more with axa, but i get my full benefit of 4500/month.
 
the Standard insurance company is writing policies. I'm in the works to get a 5000/month policy. That's the most they'll offer.
 
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I remember getting disability insurance for a year after med school after I got paranoid from the insurer who gave us a lecture on it. There were a ton of stipulations though since I was military about how I could collect benefits if something happened to me, for example: I would not be able to get benefits if I was on a ship and something fell on me cause that would be considered a military cause but if I got run over by a car on the street then I would get benefits. It got too complicated and the next year my premiums went up so I said screw it......I'll probably get it once I get out though.
 
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guardian/berkshire has the best policy for docs, if you need help getting more info just let me know.

So do you just go around advertising for guardian/berksire? Three of your four posts so far have used almost the exact same sentence. Not to mention your username. I'm pretty sure it is against the ToS to use SDN for commercial purposes.
 
bobbyseal - i'm shocked that Standard would offer an individual di policy to an active military doctor. are they aware of your status?
 
bobbyseal - i'm shocked that Standard would offer an individual di policy to an active military doctor. are they aware of your status?
So DIEXPERT, other than advertising on the site you want to give some real info?

How about sharing the reality that you cannot fully replace your income with disability insurance (Federal Govt move to discourage insurance fraud) and any disability pay outs first have to take in to account what disability income you are receiving.

Example lets say you have $5000/month of disability insurance but are 100% disabled in the eyes of the military (meaning you get 100% of your base pay tax free), eventhough you paid premiums for $5000/mo in insurance you won't receive the full amount if any. Maybe you can help since I can't quote the specifics of the law but many people are paying for policies that likely would not be able to pay out.

Do your homework. I'm not discouraging disasbility insurance, I'm just pointing out there are some regulatory issues to know about.
 
Well a1qwerty55.. Most of what you just questioned serves as great reasoning for why someone should purchase Disability insurance from an agent who actually knows DI, not just Joe Smith Agent who sold 1 policy in his life.

You touched on some good points and here are your explanations.

1) "You cannot fully replace your income with Disability insurance." There are certain arguments I can make against this statement, but in general it is true. Most insurance companies are only willing to provide about 80% of your take home (after tax) income. Someone earning $50K pays much less tax than someone earning $350K, which is why sometimes the benefit amounts seem disproportionate. However I assure you that they are fairly close to 80% of after tax income.

Regardless of these specifics, I think most would agree that it only seems natural for an insurance company to have interest in maintaining some sort of incentive for a claimant to go back to work. The thought process is: if you are making as much or more money at home, on disability claim, you wouldn't have any reason to get better and return to work. Hence, insurance companies do not want you to insure your total income.

2) Disability insurance for active military is different than what most professionals will ever deal with. Sometimes DI is purchased on the basis that it is best to purchase individual coverage prior to having group coverage. This is true, but in a different way for military physicians. There is a clause in most Disability contracts out there titled: "Suspension During Military Services".
Most insurance companies do not want to insure active military physicians, so instead they put a clause in the policy stating that a person must suspend the individual policy while on active duty and reinstate the policy within 90 days of coming off active duty. This eliminates any need for proof of insurability and allows military docs to maintain individual DI before and after service.

Therefore, you are correct that some people may be paying for coverage that will not pay. BUT, this is because it should not be in force during that time.

3) You'd hope that people selling Disability insurance have done their homework and do understand the details.

By the way, I don't believe DIExpert was advertising anything by the post he made. Rather than starting your post in that manner, why not try to benefit from what he has to offer - without offending him.
 
By the way, I don't believe DIExpert was advertising anything by the post he made. Rather than starting your post in that manner, why not try to benefit from what he has to offer - without offending him.

So neither of you are advertising your services by posting here? Mmm Kay.

If you found that comment offensive enough to get bent out of shape, this probably isn't the right forum for your sensibilities.
 
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so neither of you are advertising your services by posting here? Mmm kay.

If you found that comment offensive enough to get bent out of shape, this probably isn't the right forum for your sensibilities.
+1
 
So neither of you are advertising your services by posting here? Mmm Kay.

If you found that comment offensive enough to get bent out of shape, this probably isn't the right forum for your sensibilities.

There was certainly no getting bent out of shape. Just a simple point.

It can be taken as advertising, but isn't all that simple. I do a lot of work with Disability insurance and the medical market is fairly big for me. I did not join the forum to sell a product, I did it to learn more about the health care world.

Posting responses that are only informational (check all of my posts) does not seem like a harmful thing to do. Certainly not advertising and most likely even helpful for some members.
 
Thanks for the bump; I had not seen this thread before today...

My FA checked into this about 18 months ago, and the only company willing to provide disability insurance was Lloyd's of London at a ridiculously high premium. However, it sounds like - at least as of 2010 - that there were other policies out there???

Also, an FYI - I learned recently that - for those with group policies or home businesses - it's generally a good idea to pay your premiums with post-tax dollars. That way, any benefit you receive will come to you tax-free.
 
Yup, it's really hard to get disability insurance while on active duty, if not impossible. It's best to do it while on the civilian side before you go active duty.
 
I contacted the poster above "MR Insurance" who has been very helpful in obtaining coverage prior to going active duty. It's not easy, but he will do his best to help you.
 
Bump

Any experience with private DI and the national guard? From my understanding, my policy will pay out as long as I'm on AD for less than 30 days. Thanks
 
Wow this is an old thread.

A few years ago Mass Mutual started offering own occ disability policies to physicians on active duty. I still have the small AMA policy (still cheap) but also have one with Mass Mutual now.
 
Wow this is an old thread.

A few years ago Mass Mutual started offering own occ disability policies to physicians on active duty. I still have the small AMA policy (still cheap) but also have one with Mass Mutual now.

I purchased the Mass Mutual Own Occ policy with a partial disability and future purchase rider as an Active Duty member. But it's my understanding Mass Mutual is out of the individual disability insurance game now. They are only honoring old active policies at this time. If I'm wrong, please correct me.
 
I purchased the Mass Mutual Own Occ policy with a partial disability and future purchase rider as an Active Duty member. But it's my understanding Mass Mutual is out of the individual disability insurance game now. They are only honoring old active policies at this time. If I'm wrong, please correct me.
Didn't know that. I got my policy a couple years ago. Early 2015 I think.
 
Came across this a great article on
White coat investor website today discussing this issue but wasn’t allowed to post a link on here for some reason.
 
Depending on your status (active duty, deployed, stationed overseas, residency active duty, and etc) there are several companies to look at, Mass, Standard, Ameritas, and AMA are a good place to start.
 
I purchased the Mass Mutual Own Occ policy with a partial disability and future purchase rider as an Active Duty member. But it's my understanding Mass Mutual is out of the individual disability insurance game now. They are only honoring old active policies at this time. If I'm wrong, please correct me.
I asked my agent yesterday and he said Mass Mutual is still underwriting new policies.
 
Yes they are, $2k is what they will do.
Is that a hard cap on the benefit (monthly I assume)?

My policy is larger than that - it was just limited by the income I could document. As I recall, since a military medical discharge/retirement is sort of disability insurance in and of itself, a policy is limited to income above and beyond a 100% disability military benefit ... which is to say, only income OTHER than base pay (i.e. medical special pays, moonlighting income) can be use to justify the policy size. But that certainly exceeds $2K/month for every residency trained active duty physician.
 
I asked my agent yesterday and he said Mass Mutual is still underwriting new policies.

I stand corrected. My policy was initiated ~2015 as well and is greater than the $2K/month.

Of note, during my application, I submitted my LES with ISP/ASP (pre-CSP days) bonus and they made me submitted 2 additional LES (I don't think they wanted to insure 40+k/month military physician)
 
Is that a hard cap on the benefit (monthly I assume)?

My policy is larger than that - it was just limited by the income I could document. As I recall, since a military medical discharge/retirement is sort of disability insurance in and of itself, a policy is limited to income above and beyond a 100% disability military benefit ... which is to say, only income OTHER than base pay (i.e. medical special pays, moonlighting income) can be use to justify the policy size. But that certainly exceeds $2K/month for every residency trained active duty physician.
If you are active duty when taken out then Mass is pretty limited, currently their stated # is about $2k monthly, there are always exceptions that can be made. Ameritas will issue a policy if you are an active duty resident to $5k. It really depends on the situation, active, reserves, US based, overseas based, deployed, resident, etc. every situation has variations and different carriers respond differently to them.
 
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