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You probably already know that disability insurance is something you need to have, but you might have wondered if you need it while you’re young and not making much money. 

In this episode, Billy discusses the benefits to getting your disability coverage as soon as possible, and why waiting could leave you without insurance when you need it most.

Highlights from this episode include:

  • The #1 reason you must consider getting your coverage as early in your career as possible (1:01)
  • Your financial exposure is higher than you think as a resident and how to protect your future (1:56)
  • Why the discounts you get now save you even more money later (3:57)
  • How to make the process as painless as possible, even when you feel like you don’t have a minute to spare (7:18)
  • The life-changing risk you take by waiting to purchase your insurance (7:55)
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.

Welcome to episode number five. The title of today's program is why is it important to get specialty disability coverage while in residency or fellowship? That's an excellent question. I get asked that question quite often and there are essentially I'll say four reasons to get coverage or at least consider it while you're in training. The first one that might seem the most obvious but is often overlooked is it's advisable to get this covered sooner than later.

00:57: While you're at your healthiest. This there, there can at times be what appears to be somewhat of an assumption that as a physician in training, your exposure financially is significantly less in training compared to being an attending and almost as if your chances of being disabled are less as a resident or fellow than they are as an attending. And so you can put off coverage until you're kind of walking out the door to training and transitioning to an attending status. And that's certainly an approach. It can be a risky approach. We've seen and heard about scenarios where that didn't work out so well. And so your biggest exposure by far from a financial standpoint is a disability. Typically when you're in training, you've already spent a significant amount of money, capital, emotional capital and family capital perhaps and time investing in your training and your education up until this point.

02:00: And so there's a lot riding on your ability to get out of bed every day and go do what you're doing, even if it's in a training setting and your most important and valuable asset is your health, is that ability to do your job and get paid well for that. And so ensuring that as soon as possible is a wise thing to do again, while you're healthy. The reason is because once you do it, once you secure coverage, again, if it's with one of the top handful of carriers that offer the true specialty coverage, your underwritten wants forever. And so you would never, if your health changes down the road, it will never adversely impact your ability to get the coverage that you need to have as your income increases. And that also assumes that your policy has the future insurability option on at which as discussed in a previous episode, is certainly something that you would want to do your best to have on a well-designed disability policy.

02:57: And so once you go to do those, as your income goes up, that additional coverage does not require any additional health screenings. So your underwritten wants for the life of the policy and it covers the current purchase amount while you're in training. And then also any future increases as well. So that's reason number one, get it while you're healthy. Reason number two are the discounts. The top companies usually save their largest discounts for residents and fellows. There can be exceptions to every rule of course, but by, by and large, the largest discounts are to trainees. And once you secure that discount, again, if it's, if it's done properly, then you carry that discount forever. You carry it not only for the initial purchase amount, but also for the future insurability amounts. When you go to increase coverage after graduation and as you're an attending, you get the trainee discounted rate on those future amounts as well.

03:55: And so the discount can never be removed. It's applicable for the initial amount that you purchase as well as the future. Increase amounts. That's a valuable asset usually anywhere from 10 to 30%. In some cases, depending on the discounts, it can be 40 or even 50%. Just depends. And so the securing that while you're in training would save you a lot of money. The third reason is the medical underwriting is typically streamlined for 5,000 a month of coverage and below, which is usually the amount available to trainees. One of the top companies will actually let you have 6,000 per month, but most are at 5,000 and when you go to get a medically underwritten, they are asking you about your medical history. You do sign a HIPAA, you do e-sign and application. However, the actual physical part, the labs, the urinalysis, the blood profile that is waived in.

04:50: Typically when they do that, if you did have to have that insurance physical, they also weigh you and take your blood pressure and that step is completely removed from the underwriting process at least as we as we record this podcast today. As a result, the, the stream, the medical underwriting is, as I said, streamline and it's a lot quicker for you as a physician, as a trainee. Typically the medical underwriting can take anywhere, depending on the company. Some move a lot slower than others. It's anywhere from one day to 90 days. I mean, I've seen it be really quick. I've seen it take a and just weeks and weeks depending on getting medical records and clarifying details and those kinds of things. But your involvement as a physician, as the insured can literally be 25 minutes or less or 30 minutes or less, and it's all over the phone, electronic.

05:44: And so you're able to kind of do it on the fly without having to worry about the physical part. And again, also once you're underwritten, you're also being underwritten for the future insurability option amount so that, you know, assuming approved, then when you go to increase coverage in the future, your medical screening will not be, that will not be a step that's required. And so your health at that time would not factor in. So the third reason is the medical underwriting is streamlined. And then the last reason, and I've seen this happen a lot because I do work with a good number of attendings that just for whatever reason, never got around to getting their coverage and training. They usually pay more. One because they're older, but two, because the discounts are less in a lot of cases. But the other thing, it's important to take care of this coverage before and settle this part of your financial life before training ends and your life really speeds up.

06:36: And I know as a trainer, as a resident or fellow you are working ridiculous hours and seem to have no life perhaps outside of training. But once you become an attending and other phases of your life come into play, then it's easy for time to fly by to such a degree that you simply forget. And again, your biggest risk by far from a financial exposure standpoint is a disability by significant margin over death or other potentially negative outcomes. And so ensuring this is really important if you do it right, if you work with a specialist who has a the process in place and can point you in the right direction, then you can get it taken care of without a significant time investment. I mean, again it takes weeks perhaps for the underwriting, but most of that's behind the scenes and doesn't involve you.

07:28: And once you secure it, you're good forever. And that is just very important because again, after you graduate and you move into other parts of your life, then you don't have to worry about slowing down and dealing with this. You've already taken care of it. And again, we've just seen scenarios where people didn't get around to it. We've seen that not work out in people's favor where their health has changed or God forbid they'd been disabled and didn't have coverage. And that gets ugly really quick, typically from a financial standpoint. But also that they just, they were exposed and they finally get around to it and they acknowledge that they got away with it. So that doesn't always happen. So settling this sooner than later is important. So again, to summarize this, why getting coverage and training is important to consider. Get it while you're healthy. The discounts are by far the largest, the medical underwriting, the streamlined, and you want to settle this before other things become larger priorities. Okay. You found this helpful. Please feel free to text me anytime to arrange a conversation or to, to ask questions. My number is (704) 270-2376 again, (704) 270-2376 I'd be happy to discuss your situation in more detail. Until next time. This is Billy Gwaltney. Thank you. As always, for your time. Take care.

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