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Many trainee physicians are afraid of needing disability leave. As a trainee, you don’t have guaranteed job stability and insurance coverage like full time residents or fellows. 

That makes it tough to worry about an accident or needing disability leave.

Disability insurance promises you peace of mind. But it’s tough to find the right policy: Some providers don’t offer much coverage, they’re expensive, and they  cap your future coverage. 

This episode shows you the key elements to look at to find a policy that secures your family’s lifestyle.

Listen to discover how to maximize your insurance for stability—even as your career advances.

Show Highlights Include: 

  • What financial underwriting occurs when purchasing disability insurances a trainee (1:33) 
  • How getting the wrong policy as a trainee could cap how much coverage you get as a full time resident (1:33)
  • Why insurance companies don’t care if residents take disability… but worry about giving trainees too much coverage (3:00)
  • The most important factors to find an insurance policy that lets you keep your lifestyle (4:30) 
  • Why getting a disability policy as a  “locks in” a discount for the rest of your career—regardless of your health(5:45) 
  • How to maximize your insurability throughout your career as a resident (6:00)

To ask questions on insurance coverage or to get a quote, please don’t hesitate to call us anytime at 704-270-2376, and I’d be glad to discuss your specific situation with you.

Read Full Transcript

Hi, I'm Billy Gwaltney and this is the CYA podcast. This show is for the physician who understands the importance of protecting everything you've worked so hard to achieve. Each week I'll bring you tips and advice to help you cut through the clutter and misinformation and show you exactly what you need to preserve your income and way of life. If you're ready to achieve the peace of mind that only financial security can bring let's get started.

(00:29): Welcome to today's episode of the cover, your assets podcast. This is Billy, Gwaltney your host, and I'm excited to be with you today. We're going to cover the topic of as a trainee or resident or fellow, how much disability insurance can I purchase. And that's a great question deal with that question all day, every day, and working with trainees across the country. There are currently as of this recording for top tier disability contracts that that are considered the top tier and they all offer trainees 5,000 a month of private coverage.

(01:07): While they're in residency or fellowship, fellowship does count as a trainee for discount purposes. I get that question a good bit as well. The way it works is essentially insurance companies are not financially underwriting residents or fellows when they purchase their coverage. So for attendings and for people that are not resident or fellow physicians, when myself or anyone, that's not in that position of a resident or fellow goes to purchase disability insurance, there's financial underwriting. That goes into that process along with medical underwriting, the financial underwriting as I've covered on other podcasts is to ensure that you're not over-insured to make sure that you're, you don't have too much of an incentive to become disabled because they don't want people over insured. And so they there's a formula that companies use to calculate how much coverage any given salary can have factoring in any employer long-term disability for residents and trainee and fellows or trainees that financial underwriting piece is just waived.

(02:15): And so insurance companies, they know that residents and fellows, aren't making a whole lot of money unless they're doing a significant amount of moonlighting. And they're willing to just offer 5,000 a month of coverage as a trainee to trainees, regardless of what that trainee salary is basically over ensuring a resident or fellow in exchange for the, the assumption that typically is a safe assumption that that person is not in it so that they can figure out a way to tap out and not work and just collect 5,000 a month for 2, 8 65, that they're in it for something bigger. And that eventually there's a goal line where that person will become an attending. Their income will go up quite a bit. And at that point you would, as an attending and a higher income, you would be subject to the financial underwriting piece. But as a trainee, they'll allow you to purchase 5,000.

(03:14): One of the top companies recently increased that cap to 6,000. And so this isn't something that, that is a law or some kind of rule that can never be adjusted. Insurance companies reserve the right to decide how much they're willing to insure. Now, there are certain specialties where they won't insure as much, or they insure a different amount. So these, these guidelines are different for dentists and for say podiatrist in certain cases and other physicians. So you, you do want to look at it and talk with a specialist who knows the lay of the land and can help make sure that you're getting the coverage that you want for clients that I work with that still have a ways to go in training. Sometimes they'll start out less than 5,000. There's not a, again, there's not a law or rule that says that 5,000 is the only amount you can purchase.

(04:08): And so if from a budgeting standpoint, 5,000 a month, the rate for 5,000 a month, even though it's discounted at 20 or 30%, or whatever's discounted, that's still not budget friendly enough, then you can look at a lesser amount when you go, well, why would I do that? Why wouldn't I just wait and do it when I can, when my budget is freer. And that's a legitimate question, there are several reasons not to wait. One is that a disability can happen anytime. So, you know, we there's obviously no Paul's on the risk of a disability, just because someone can't afford insurance, the risk is still there. And so it's something that is wise to at least explore and consider if it's were able to be covered. The second one is that you go through the medical screening, and again, if it's done correctly, you go through that once forever.

(04:57): So whatever amount you purchase, you go through the string line, medical screening for residents and fellows. I've covered this in other podcasts that would waive the insurance physical as of the time of this recording. And so they're just doing the medical screening electronically. And over the phone, you go through that once. And then as you become an attending, when you go to increase several years down the road, you don't have to be as healthy then as you were when you started, that's a big deal. The third thing is that you do secure the trainee discount again, if done correctly, not only, only initial purchase amount, but on any amount, you increase up to the total cap of that particular policy through the future insureability option. That cap could be 20,000 or in some cases, 30,000. So it's still worth considering starting out at a lower amount.

(05:45): If you do start out at a lower amount, that would tend to steer people towards certain options where, or certain companies or contracts where the future insureability option or the rider that allows you to increase coverage is not a multiple of the initial purchase amount. So in some policies, if you start at 5,000, for example, you can increase up to 20,000 as an attending. But if you start it at say 2,500, you, your cap would drop from 20,000 to 10,000. And so those details matter, you would want to make sure that you can still have maximum insureability if at all possible. And if you're not concerned about having more covers than 10,000, that you can access as an attending, then that's fine. But there are other, there are a couple of top companies that allow you to start out at a lower amount. I'm just using 2,500 because it's easy math, half of the 5,000, and they would still allow you to access their total future insureability cap of say 20,000 or 30,000 in one company's case.

(06:50): So I wanted to cover this because the, the amount that you start out as a trainee is important, 5,000, is that cap with the exception of the one company that will let you go up to 6,000 now. And I don't want to mention companies, because if you listen to this down the road, that company may have changed it. And so it's just important to talk to a specialist that can help you navigate you know, it's in the 5,000 range and I'll update this, if that changes dramatically, but one company does offer 6,000, but also keep in mind, don't miss the forest for the trees. So to speak. If you can't afford 5,000, start out somewhere lower, start out at 2,500 or 2000 or a thousand or whatever it is. And if you do it correctly, you can still access the total future insureability pool in the future without having to update any medical screening.

(07:41): And with the trainee, discounted discount included, that is such a valuable asset. I can't stress that enough because I've seen people. I've dealt with clients that have come to me after they graduated and now they can afford it. Their health has changed. The discounts are different. I do end up working with attendings. They, they generally pretty much always pay more just because of the discounts are not as robust for attendings as it is for trainees. And so hope this makes sense. I would be happy to discuss in more detail, any time, feel free to text or call. My number is 7 0 4 2 7 0 2 3 7 6. Again, that's 7 0 4 2 7 0 2 3 7 6. I'd be happy to discuss her situation, answer questions until next time again, this is Billy. Gwaltney grateful for the opportunity to spend some time with you have a great rest of the day.

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