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Five Considerations for Medical Residents Purchasing Disability Insurance

April 16, 2012 | Comments: 0 | Views: 141

Medical residency is a time that many young physicians begin considering the purchase of an individual disability insurance policy. This comes for many reasons including the financial responsibility of raising a family and the simple desire to protect one's earning power and the time and money invested in becoming a doctor. Whichever the reason, there are many issues that medical residents should consider when purchasing disability insurance.

Consumer-Friendly Policy Language & Features As you review multiple policies, be sure to compare the contractual features first before comparing the price. Pricing is an important factor and you should be sure not to pay more than you must for a certain level of coverage. However, every disability insurance policy is different from the next and before comparing price you must be sure to fully understand the benefits each policy offers. As a young doctor it is important to be sure that you are not comparing pricing as apples-to-apples when the policies themselves are actually apples-to-oranges.

Consider Your Cash Flow Some companies offer a graded or laddered premium schedule which requires a lower premium today that will continue to increase in the future. Although this type of structure does not allow for securing a lower level premium in the present, it may be the perfect solution depending on your situation. This allows young physicians to obtain disability insurance now since it is needed, but without imposing too much on their cash flow. Once you become adjusted to an Attending's income level and your cash flow is more flexible, you can convert the policy to a level premium. The level premium will be higher in the future than it is today, but the extra cash flow during residency may very well warrant this option.

Consider Opportunity for Savings Most of the insurance companies offering comprehensive and competitive disability insurance to physicians today have discounts available for physicians applying while in training. Just because you are told about one specific company's discount does not mean that they are the only discounted option available for your GME program. You should review and compare alternate options before selecting to apply with any single insurance company.

Pricing for Disability Insurance Pricing for disability insurance is adjusted for the risk of becoming disabled in a particular profession through occupational classifications that are unique to each insurance company. As should be expected, there is a pricing difference between the various medical specialties with Surgeons and Anesthesiologists being amongst the more costly and Pediatricians the least costly.

Working with an Independent-Minded Agent Finding a truly independent agent to work with can be a difficult task. Although many agents may state that they are independent, they will still have some level of affiliation to a specific insurance company. This is one way that financial professionals gain access to customary employee benefits such as medical/dental insurance, a 401(k) plan, etc. The important thing is not necessarily to find an independent agent, but an independent-minded agent - someone who is not trying to sell you a specific company, but rather the best policy for your situation. You should work with someone who reviews multiple options and helps you decide on the most appropriate policy for you.

Michael Relvas is a CERTIFIED FINANCIAL PLANNER™ and also the owner of MR Insurance Consultants, a financial services firm with focus on disability insurance in financial planning. Michael is the creator of the " Physicians Disability Insurance Buyer's Guide". For more information contact Michael at 800-817-4522.

Source: EzineArticles
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