Disability insurance, malpractice insurance, anything I am missing?

[carlosc1dbz]

Out in the real world, I want to make sure that I have all my bases covered. I don't want to be over insured, but I also want to make sure to have all my bases covered. Talking to insurance companies, they want to sell you everything. Did any of you guys get disability insurance? I am not a surgeon, but you never know what could happen? Have any of you had to use your disability insurance? Any pearls of experience that might be helpful for anyone reading this forum?

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[Mad Jack]

Out in the real world, I want to make sure that I have all my bases covered. I don't want to be over insured, but I also want to make sure to have all my bases covered. Talking to insurance companies, they want to sell you everything. Did any of you guys get disability insurance? I am not a surgeon, but you never know what could happen? Have any of you had to use your disability insurance? Any pearls of experience that might be helpful for anyone reading this forum?

You never know. Disability insurance is good to have in case of unforeseen events- what if you were to suffer a traumatic brain injury that left you unable to practice, who would look after your family etc. Life insurance is basically the same deal- I wouldn't want to worry about how my family is going to take care of themselves in the unfortunate event that something were to happen to me.

 

[Shikima]

Unfortunately, disability ins won't ever be enough if disaster hits and you have student loan payments with everything else that needs to be paid.

 

[carlosc1dbz]

Unfortunately, disability ins won't ever be enough if disaster hits and you have student loan payments with everything else that needs to be paid.

yeah if it is only a few $k per month, might be tough to replace my salary and avoid financial doom for my family. One misfolded protein and who knows what can happen.

 

[MD Financial Services Scott]

Unfortunately, disability ins won't ever be enough if disaster hits and you have student loan payments with everything else that needs to be paid.

You can pick a contract that has a student loan rider on it that pays the loan and pays you your benefit.

 

[heysexylady]

Out in the real world, I want to make sure that I have all my bases covered. I don't want to be over insured, but I also want to make sure to have all my bases covered. Talking to insurance companies, they want to sell you everything. Did any of you guys get disability insurance? I am not a surgeon, but you never know what could happen? Have any of you had to use your disability insurance? Any pearls of experience that might be helpful for anyone reading this forum?

I have disability insurance but I didn't get life insurance since I don't have anyone depending on my income.

 

[heysexylady]

You can pick a contract that has a student loan rider on it that pays the loan and pays you your benefit.

Which insurance companies offer this wknd is it possible to get it if you already purchased disability insurance i.e principal .

 

[OldPsychDoc]

If you ever take care of a physician who incurred a brain injury through her "healthy lifestyle" of cycling, you will get disability insurance...

 

[NickNaylor]

You can pick a contract that has a student loan rider on it that pays the loan and pays you your benefit.

Sounds like a potentially expensive rider to add to a policy.

 

[MD Financial Services Scott]

Which insurance companies offer this wknd is it possible to get it if you already purchased disability insurance i.e principal .

Mass Mutual, Guardian, and Standard are the ones in play at the moment, others are looking at the designs to add as optional features down the road.
1. Guardian-Monthly benefit amount: $250-$2500

2. Mass Mutual-Monthly benefit amount: $100-$2500

3. Standard-Monthly Benefit amount: $500-$2000

Let me know if we can help further

 

[MD Financial Services Scott]

Sounds like a potentially expensive rider to add to a policy.

Actually pretty cheap, not bad at all.

 

[TexasPhysician]

I would certainly get disability insurance. I ended up with Guardian, but MetLife was very close in my case.

 

[MD Financial Services Scott]

I would certainly get disability insurance. I ended up with Guardian, but MetLife was very close in my case.

Certainly depending on design Guardian can be very good and a compelling company to use. MetLife no longer is in the individual disability business as they stopped taking new business as of September 1, 2016.

 

[Jules A]

Isn't disability the rare event that can result in student loans being discharged?

 

[PistolPete]

Isn't disability the rare event that can result in student loans being discharged?

I think you may be thinking of death.

 

[WisNeuro]

I think you may be thinking of death.

And, aren't those only the public/federal loans?

 

[FlowRate]

Companies that sell disability insurance put out stats about how 25-33% of people will be disabled before they retire. The catch is in the definition of disabled. Temporary disability while recovering from surgery or a minor-moderate accident etc. is different from permanent disability. Most people will not be disabled long enough for their disability insurance to kick in (usually 6-9 months), contiguously, or disabled such that they will no longer be able to be a psychiatrist (TBI examples notwithstanding.)

That doesn't mean it's a bad idea to get disability insurance, I just like to have my own pseudo-actuarial understanding of what I'm paying for.

 

[MD Financial Services Scott]

Isn't disability the rare event that can result in student loans being discharged?

I think that is for federal loans will suspend the payments due but that may even vary based on program, not positive as that is certainly not my area of expertise.

 

[thoffen]

Good disability insurance is probably the most useful thing you can have. Of course, there are lots of ways to polish a turd. I'm no expert so others will have to add on, but here are the things to look out for:

1. You need same specialty disability insurance. Many policies define disabled as unable to work any job at all, including burger flipper.

2. Your policy should cover partial disability. In effect, if you can still be a part time psychiatrist it needs to compensate for the reduction in hours.

3. You need to look at any exclusions. Many will not pay for dementia or mental illness. Particularly important in psychiatry because it doesn't require hands on work.

 

[On Walden Pond]

Disabled, for more than 9 months, before age 65 or 67 (most disability insurance policies only pay to age 65 or 67), to the point of not being able to think, hear, or speak, which is what must happen in order to prevent my practicing psychiatry... I'm willing to impute a 1 in 10,000 chance of this happening between my current age and 65. Total net cost for this coverage is in the ballpark of $35K.

What sounds better:
A) betting $35,000 that your lottery number will be the 1 in 10,000 in order to win $100,000?
or B) betting on a 9,999/10,000 game that you can have $35,000?

You must pick one. Most pick A, because of fear, but you're crazy if you pick A.

 

[Jules A]

Disabled, for more than 9 months, before age 65 or 67 (most disability insurance policies only pay to age 65 or 67), to the point of not being able to think, hear, or speak, which is what must happen in order to prevent my practicing psychiatry... I'm willing to impute a 1 in 10,000 chance of this happening between my current age and 65. Total net cost for this coverage is in the ballpark of $35K.

What sounds better:
A) betting $35,000 that your lottery number will be the 1 in 10,000 in order to win $100,000?
or B) betting on a 9,999/10,000 game that you can have $35,000?

You must pick one. Most pick A, because of fear, but you're crazy if you pick A.

Ahhh your post sounds like someone relatively young who can't imagine the toll life and aging might have on an otherwise healthy, active person and a few decades ago I would have agreed. Disability policies have the potential to pay off far more than $100,000 if permanently disabled and since it takes me less than 2 months to gross the $35,000 you mentioned I'm in favor of having the peace of mind if nothing else. I'd happily toss that money in the fireplace if I am blessed to work until my 62 year old retirement goal.

 

[TexasPhysician]

Disabled, for more than 9 months, before age 65 or 67 (most disability insurance policies only pay to age 65 or 67), to the point of not being able to think, hear, or speak, which is what must happen in order to prevent my practicing psychiatry... I'm willing to impute a 1 in 10,000 chance of this happening between my current age and 65. Total net cost for this coverage is in the ballpark of $35K.

What sounds better:
A) betting $35,000 that your lottery number will be the 1 in 10,000 in order to win $100,000?
or B) betting on a 9,999/10,000 game that you can have $35,000?

You must pick one. Most pick A, because of fear, but you're crazy if you pick A.

I agree that the odds of disability are quite low, but if it happens, the worth is there.

My policy involves me paying out approx $75,000 over the next 30 years (hopefully I will be retired by 65 and discontinue it earlier). If I become disabled in the next few years for life, my policy pays about $3 million through 65.

To ensure my family's future, $75,000 over 30 years is worth it.

 

[digitlnoize]

Unfortunately, disability ins won't ever be enough if disaster hits and you have student loan payments with everything else that needs to be paid.

Federal student loans are typically forgiven in the event of the borrower's death.

 

[Shikima]

Federal student loans are typically forgiven in the event of the borrower's death.

What about stroke or car wreck?

 

[digitlnoize]

What about stroke or car wreck?

Oh well, yeah, you'll need disability for that.

 

[MD Financial Services Scott]

What about stroke or car wreck?

Here is what I found:
Total and Permanent Disability Discharge is only available for federal student loans. Private student loan borrowers who face long-term disability may not be eligible for a complete discharge. It really depends on the lender, but there is not a standard set like there is for federal student loans.

 

[carlosc1dbz]

What about stroke or car wreck?

That is a good question. The point made earlier "brain injury through her "healthy lifestyle" of cycling" really got me thinking.

 

[MD Financial Services Scott]

That is a good question. The point made earlier "brain injury through her "healthy lifestyle" of cycling" really got me thinking.

In the last few years I have had 3 physicians get disabled due to TBI from cycling....makes sense due to the increase in popularity of that sport and the fact there is a good deal of interaction with autos.

 

[Shikima]

One option is then to pay off loans as quickly as possible.

 

[Psychotic]

Or buy a life insurance policy to cover student loans...

 

[Shikima]

I think we can agree that education is a racket.

Be like Mike Rowe, advocate for trades!

 

[MD Financial Services Scott]

Or buy a life insurance policy to cover student loans...

You can typically get $500k of life death benefit for about $12 when you get out of residency....it is cheap to acquire.

 

[Shikima]

You can typically get $500k of life death benefit for about $12 when you get out of residency....it is cheap to acquire.

Is it payable to the loans only or does the loved one get the sum as a bulk?

 

[MD Financial Services Scott]

Is it payable to the loans only or does the loved one get the sum as a bulk?

Whoever you name as beneficiary gets the money and can use it as they choose.

 

[thoffen]

Disabled, for more than 9 months, before age 65 or 67 (most disability insurance policies only pay to age 65 or 67), to the point of not being able to think, hear, or speak, which is what must happen in order to prevent my practicing psychiatry... I'm willing to impute a 1 in 10,000 chance of this happening between my current age and 65. Total net cost for this coverage is in the ballpark of $35K.

What sounds better:
A) betting $35,000 that your lottery number will be the 1 in 10,000 in order to win $100,000?
or B) betting on a 9,999/10,000 game that you can have $35,000?

You must pick one. Most pick A, because of fear, but you're crazy if you pick A.

1. Your numbers are terrible
2. The definition of insurance is one where the expected return is less than what you pay in. Otherwise, insurance companies would become bankrupt. You get insurance for something when the impact of an unlikely event is devastating. A billionaire has no need for disability insurance, but someone early in their career without sizable investments and especially with debt would be devastated if they could no longer work.

 

[On Walden Pond]

1. Your numbers are terrible
2. The definition of insurance is one where the expected return is less than what you pay in. Otherwise, insurance companies would become bankrupt. You get insurance for something when the impact of an unlikely event is devastating. A billionaire has no need for disability insurance, but someone early in their career without sizable investments and especially with debt would be devastated if they could no longer work.

You've got it backwards my friend. The definition of insurance is one where the expected return is more than what you pay in, or else nobody would buy into it. Its aggregate contributions to defray individual tiny but present risk.

I'm standing by the 1 in 10,000 chance of suffering such a devastating accident that I can't think or speak between now and age 65. It's probably more like 1 in 100,000 now that you made me re-consider it. Car crashes are one of the most common ways of becoming severely disabled in this country. Take Massachusettes, the odds of dying in a car crash there is 1 in 20,000. But I'm glad to hear the payouts are typically more than $100,000 for those who buy into disability insurance.

 

[clausewitz2]

You've got it backwards my friend. The definition of insurance is one where the expected return is more than what you pay in, or else nobody would buy into it. Its aggregate contributions to defray individual tiny but present risk.

I'm standing by the 1 in 10,000 chance of suffering such a devastating accident that I can't think or speak between now and age 65. It's probably more like 1 in 100,000 now that you made me re-consider it. Car crashes are one of the most common ways of becoming severely disabled in this country. Take Massachusettes, the odds of dying in a car crash there is 1 in 20,000. But I'm glad to hear the payouts are typically more than $100,000 for those who buy into disability insurance.

Yeah, no, @thoffen was definitely right. If each individual is not paying in more than what is paid out on average taken across the entire pool of insured individuals, the insurance company fails. Insurance is absolutely a matter of hedging against catastrophic risks, but critically, you get nothing if those risks do not transpire and those risks need to not transpire for the vast majority of individuals covered.

Does sort of call into question the insurance model of healthcare financing, but that is sort of orthogonal.

 

[thoffen]

Yeah, no, @thoffen was definitely right. If each individual is not paying in more than what is paid out on average taken across the entire pool of insured individuals, the insurance company fails. Insurance is absolutely a matter of hedging against catastrophic risks, but critically, you get nothing if those risks do not transpire and those risks need to not transpire for the vast majority of individuals covered.

Does sort of call into question the insurance model of healthcare financing, but that is sort of orthogonal.

Thanks. I was going to reply but didn't know how not to be mean about it.

For some reference on payout, my disability policy pays 2/3rd of my monthly income (Max 12000) less my earnings until I reach normal social security retirement age. It's employer provided, so I don't know the premium cost if I had to pay it.

Suffice it to say, that income would be substantial if I needed it and make enormous impact on my quality of life (and family's) if I were disabled.

 

[Jules A]

Thanks. I was going to reply but didn't know how not to be mean about it.

For some reference on payout, my disability policy pays 2/3rd of my monthly income (Max 12000) less my earnings until I reach normal social security retirement age. It's employer provided, so I don't know the premium cost if I had to pay it.

Suffice it to say, that income would be substantial if I needed it and make enormous impact on my quality of life (and family's) if I were disabled.

My employer long term disability also pays about 2/3 of my monthly income. They report it costs them $1,200 a year for that coverage. I wasn't mature enough or financially sound enough to get additional coverage until I was older so my personal policy is expensive and not especially good but still adds a couple of thousand dollars a month to the pot in the case its needed. Hopefully its money I have completely wasted on my piece of mind.

I personally know 3 people who despite being extremely physically fit with none of usual contributors like family hx or tobacco were hit with an enormous blow in their late 30s-CVA, MS and Lupus. They are all still working but at profound risk for a time when it might not be possible and virtually uninsurable except through an employer's policy at this point.