Should surgical residents purchase more than one policy during residency?
by Jamie K. Fleischner, President, Set for Life Insurance
It is pretty well known around the medical resident community that the opportune time to purchase your disability policy is before you graduate. The companies will waive your financial verification and you may qualify for special discounts. But should you consider purchasing more than one policy?
I had an orthopedic surgical resident call me yesterday (I’ll call him Dr. Ankle). Dr. Ankle approached me because he had met with a local agent who showed him one policy and said that in the future, he would need to look into an excess policy from a non traditional carrier. This was in fact wrong information.
Dr. Ankle is graduating this summer and will be working in a private practice outside a large city. He expects his starting salary to be around $200,000. He has about $200k in school loans. He expects to make partner in 2-3 years when his income will be more than $500,000.
If Dr. Ankle purchases one policy during residency (and if it is set up properly), he would be able to increase that policy up to $15,000 to $16,000/month benefit in the future (depending on the company) when his income exceeds around $350,000. This means that he would maximize his disability insurance policy. If he wanted more insurance, he would need to go out and purchase more with another company. This would require new medical underwriting. If he has an adverse change in health, he either may not qualify or qualify with restrictions or exclusions.
Currently, physicians may purchase up to $15,000 or $16,000/month benefit with any one company. However, they can aggregate benefits with more than one company up to $25,000/month.
As a resident, if Dr. Ankle sets up his insurance properly with the right contracts and the correct increase options, he would be able to pre approve himself up to the full $25,000/month and would not need to endure any future medical underwriting. Furthermore, by working with a broker such as Set for Life that works with multiple companies, they can coordinate the exam so Dr. Ankle would only need to conduct one paramedical exam (blood and urine) which could be sent to the respective companies.
If you are a medical resident with a potential income of over $350,000/year, it is in your best interest to purchase a policy from more than one company and blend the coverage. This allows you to have the most options available to you in the future while protecting your insurability.
For more information about disability insurance for medical residents, surgeons, or physicians, contact Set for Life Insurance today!