The Importance of buying Disability Insurance During Residency
Case Study 38 Year Old Female Interventional Radiologist
Female Interventional Radiologist
38 Years Old - Own Occupation Disability Insurance - Future Increase Options -
Three years ago I was introduced to a physician husband and wife couple in Massachusetts. The wife is an Interventional Radiologist and the husband a Cardiologist. At the time they were both completing their residency and fellowship training and they both purchased a residency package from us with limits of 5,000 per month for disability with Ameritas. Both of their policies also included riders for , a rider for , and a
or Own Specialty Disability Insurance - provides tax-free coverage from now until retirement should a physician suffer any sickness or injury that prevents them from working in their medical specialty while also allowing them to collect their full benefit if they continue to work in another occupation. Currently, only six disability carriers offer this type of coverage to physicians: Ameritas - Guardian - Principal - The Standard - Ohio National - and Mass Mutual
- Provides a tax-free supplement to income you are earning while you are disabled and earning less than 85% of your prior earned income while you are still working in your medical specialty.
- Provides inflation protection while you are disabled. Your tax-free monthly benefit will increase every year in an effort to keep pace with inflation.
- Allows you to increase your coverage in the future without medical underwriting so long as your income justified the increase.
Last week I sent an email to the husband (the cardiologist) reminding him of his Future Purchase Rider and asked him what his new income was. Here was his exact email response:
Thank you for getting in touch. My wife, whom you also sold the same disability insurance policy, is actually about to file her first claim since she has been asked by her oncologist to give up interventional radiology given her recent lymphoma diagnosis and to limit further radiation exposure. This has led us to think that it is more essential than ever to increase my disability policy in case of any catastrophe that may befall upon me. Any chance you are available to chat tomorrow after 2 pm?
I immediately picked up the phone and when he answered, I expressed my sadness for their current situation and immediately asked him what his wife's current income was. His response - "just over 400,000." Her current monthly benefit was still just $5,000 per month from residency, they must have forgotten that she was paying for the right to increase her disability benefit through their future increase rider. As I pointed out above, this rider allows you to increase your disability coverage prior to filing a claim, regardless of your health, so long as your income justifies the benefit amount. An immediate sense of relief was present in his response and tone. He told me that they were scared because for the last year she had been earning so much money and they thought they were going to have to cut major corners in their new lifestyle because her disability benefit was currently too low and nearly 100% of her income came from her ability to work as an interventional Radiologist.
He told me they were planning on filing for disability soon should his wife need to stop working and would be forced into rushing treatment just to get her to a point where she could at least read images at home so they can supplement the money they needed to cover their bills. He was extremely relieved that I reminded him of this rider and expressed an overwhelming sense of relief that his family could now afford to allow his wife to take the time she needed to receive the treatment necessary to get her better without having the stress that comes with the financial burden of a disability like hers.
Because his wife had not yet started to miss work, we immediately rushed to submit copies of her current income documents as well as completing the financial application to increase her current monthly benefit from $5,000 per month tax-free to $15,000 per month tax-free.
Things are going to work out for these two financially and I"m very grateful that in this situation our timing was perfect. Never wait until its too late to increase your disability coverage or to purchase it in the first place. Residency is always the best time to buy.
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