Entering into a medical residency program has many firsts, including the first time you will be paid to perform medical duties. To provide peace of mind for moonlighting or if your residency program is about to end, this may also be the time to consider an individual disability income insurance policy outside of any coverage your residency program may have provided.
Below, we cover how to find the right disability income insurance policy for you as a resident.
As a risk management tool, disability income insurance may protect your livelihood should you become unable to work due to an injury or illness. However, the details and limitations of disability income insurance will depend on your specific policy.
When obtaining a disability income insurance policy, your health and your age are important factors when determining important details like your premiums.
Many insurance providers offer discounts to individuals who purchase coverage while they are in residency. With this in mind, evaluating your policy needs now may be one of the best moves you can make as you begin your medical career.
Usually, schools or employers provide group disability income insurance for their students, medical residents, and fellows. The details of the group policy are determined by your institution and the insurance company. While you have coverage during your residency program, this coverage may end once you have finished your residency.
An individual policy is between you and your insurance provider. This coverage is not tied to your school or place of employment.
A premium is how much you pay — usually each month — to keep your policy active. The premiums you pay for coverage will be defined as level or graded in your policy details. With a level premium, your premium amount will stay the same for the life of the policy. Since you won’t need to worry about higher premiums as you grow your career, the cost of your level premium will likely be higher than an initial graded premium.
In contrast, a graded premium is a premium that starts out lower than a level premium and then increases yearly as your income increases. Typically, a policy with a graded premium will be less expensive early on in your career and may have the ability to be switched to a level premium later on.
If your contract is non-cancelable and guaranteed renewable, this means that your insurer cannot change or cancel your disability income insurance policy as long as you pay the premiums on time. This is crucial to have so that you are in control of your coverage.
Own occupation is a feature that may offer coverage should you become injured or disabled and unable to work in the field of medicine in which you were trained. Under this feature, you may still receive benefits even if you recover and can only work in an occupation outside of your specialty.
Should you need to seek an alternative occupation due to a disability or injury, your income is likely to be less than what you would have expected to yield in your career as a trained medical professional. Since any unplanned decrease in your income can negatively impact your financial goals, it’s important to consider own occupation disability income insurance as a safety net.
With a group policy, there may be gaps in coverage under different circumstances, such as if you switch practices or if your employer changes insurance companies.
However, an individual policy can follow you throughout your career if you retain your insurance provider. You may also be able to tailor your coverage by choosing which riders to add to your policy.
A student loan rider may cover your student loan payments should you become disabled and unable to work. This would be in addition to your monthly benefits and can help ease your financial burden while you focus on your recovery.
Choosing individual disability income insurance as a medical resident can feel overwhelming. How do you know which option and insurance provider is right for you?
At Treloar & Heisel, our focus is on helping medical professionals like you build strong financial foundations. Learn more about Disability Income Insurance for Medical Residents.
Treloar & Heisel, an EPIC Company, is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.