Articles >> Buying Disability Insurance During Medical Residency

Undoubtedly you have heard of two specific types of insurance that are particularly important for any Physician: malpractice and disability income insurance. Although physicians are not obligated to carry disability insurance, the level of specialty required to be a physician is too valuable not to insure. As a medical resident, it is beneficial to know your options during medical residency, rather than after, in order for you to make the most informed and appropriate decision while you still can.

 

Although the income you earn as a medical resident may be substantially lower than that which you will earn as an attending, your ability to work and practice in your selected specialty is still very valuable to your financial future. Imagine investing all of this time and effort into establishing a career that you aren't able to work in because of an unforeseen injury or illness - wouldn't you still feel as though you should be compensated in some way?

 

There are four primary considerations for medical residents to make with respect to purchasing disability insurance during residency. The first is income protection - having a disability insurance policy will protect your hard work and future earnings. Insurance companies offer Special Limit Programs for medical residents and fellows that provides them with a basic level of coverage, somewhere around $4,000 - $5,000 of monthly benefit, which is equivalent to coverage for an $80,000-$100,000 income. You clearly want to be working in your selected specialty or you would not be spending the time learning and training, however medical residents are forced to drop their residency programs because of a disability, every year.

 

The second consideration that should be made is in regard to health. Generally, a person's health deteriorates with age, and even though a person may be considered to have excellent health, this may not be the case when applying for disability insurance. The medical underwriting done when a person applies for disability insurance is not solely on how healthy a person is, but how likely they are to become disabled at some point in their career. Insurance companies can be speculative in certain situations and exclude pre-existing conditions for which you have been diagnosed, treated or monitored in the past. If you are able to afford coverage during medical residency, it may be in your best interest to do so, in order to take advantage of your good health.

 

A third consideration medical residents should make when shopping for disability insurance during medical residency is paying for coverage. It is fairly well known that most medical residents would be considered "under paid and over worked", and for that reason pricing can be a big issue. As a medical resident who cannot afford the monthly premium associated with disability insurance, you should consider purchasing your coverage on a graded premium basis rather than level. Depending on your age and health, a policy that typically would cost $250/month on a level basis may only cost $100/month on a graded premium structure. Certainly $100/month is more affordable and within the means of a medical resident. The ideal process would be to pay a graded premium during medical residency and then convert to a level premium once you can afford it, perhaps as an attending physician.

 

The final consideration is in respect to the benefit amount for which you qualify as you are completing your residency program. As already mentioned, insurance companies have Special Limit Programs which are made available to medical residents. Included in these programs are enhanced benefit offers that are made to medical residents within 6 months of graduating residency. In some cases, these limits may exceed those for which you will qualify as an attending. More specifically, if your future employer (hospital or clinic) provides you with a group long-term disability program, you will be restricted in the amount of individual disability insurance you can purchase. At this point you would only qualify for a supplemental disability insurance policy which may limit you to a $2,000 or $2,500 individual benefit. Up to the date of graduation from your residency program, under Special Limit Programs, you are able to obtain between $6,000-$7,500, based on your medical specialty.

 

As has been made apparent, there are many consideration to make as a medical resident when purchasing Disability insurance during residency. Even if you decide against purchasing coverage during residency, you should at least be sure to understand and evaluate your options. You just may find yourself in a situation where purchasing Disability insurance while still in residency is not only affordable but in your best interest.