Here’s what I wish I knew about disability when I was finishing my medical training.
Learn more or get a quote from our partners at Pattern here. They’re experts on disability policies for healthcare professionals.
Full Transcript Below
Dr. Z: Matthew Wiggins from Pattern. Welcome back to the show. We’re back, because it’s residency graduation season is coming up and disability insurance, which we talked about on a previous show, is now becoming crucially important because the timing of the purchase is important. Fill us in right now, tell us what the people need to know.
Matt Wiggins: So, so residents and fellows typically get about like 10 emails a day towards the end of residency and fellowship. And it’s easy to ignore. It’s easy to say, Oh, this this is just some kind of salesmanship or something and I’m just gonna ignore everything. The problem is this is actually one of the most important foundational financial aspects of your life to nail down before you leave training. And the reason is, is because when you’re in training these insurance companies want you to buy a policy early on, right? They want you to pay premiums over a longer period of time. So they actually give residents and fellows discounts and they can be 10, 20, 30% off. And not only does that lock in your rate at a good bit cheaper rate for your disability insurance but let’s say you buy a $5,000 policy when you’re getting out. That means it’ll pay you 5,000 a month. If you get disabled and you want to increase it at 10,000 a month maybe I don’t know, five years down the road. If you get the resident discounts locked in, resident fellow discounts locked in. It also applies to your increases in most situations. So it not only saves you that money now on the maybe smaller policy you get, but as you make more income, you need to increase your coverage. The discount still in most cases gets applied to the increase, even down the road. So it’s a big money saver. Now it’s a big money saver later. And with as important as the disability insurances and you’re protecting your income you really want to get it done at the right time. And it really is like one day you’re in training and you have these discounted rates. And then the next day they have no, no sympathy on you. You know, they give you the full rate.
Dr. Z: So this is crucial because the timing is so important because I remember they were pitching it to me when I was graduating. And I’m like, Oh, I’m joining a group and it’s not gonna matter. And I’ll be taken care of, wrong, wrong, wrong, wrong, wrong. Because my group disability insurance, turns out was taxable. So instead of getting 60% of my income, I was getting 30% of my income if I got disabled. And the other issue is if I left that group that policy doesn’t follow me. So if you get the policy yourself, yeah, you got to pay the premium, but it’s post tax money. You get it, when you’re, when you get paid the disability policy amount, that is not taxable. It goes with you where you go and it’s scalable like you said, at the potentially at the same district right
Matt Wiggins: It is scalable. And a lot of times it’s scalable without having to prove your health again. So without any more physicals, no more medical record checks, anything like that. So the, the younger and healthier and the most discounted rate, you can get you want to lock all that in early. So that then when you increase it later is cheaper. And a lot of times the ability to increase it as guaranteed. So
Dr. Z: And the other thing we need to realize people think, well why do I even need disability insurance? But the thing is, a lot of people think, Oh, trauma, trauma trauma for disability. If I, I got injured. I got in a car accident. They forget that a lot of this, maybe the majority of this is illness. So you get sick, including mental health issues, etc., disability covers that. And this is insurance on your income. So it’s so important to actually take it seriously.
Matt Wiggins: Yeah. Well, you know, different studies show around three-fourths of all disabilities are illnesses and not accidents. So everybody thinks like, Oh, I’m not dangerous. I don’t live dangerously. Or I don’t drive fast cars or whatever, you know but really cancer, mental illness, arthritis. There’s so many illnesses that affect doctors that aren’t just accidents. And like I said, 75% are from illness and really can’t plan that. Or no one is going to happen.
Dr. Z: Yeah. And again, it’s crucial because when you’re young, it’s when you really need this. So people are like, well, why should I start paying now? And, you know, I’m more likely to get disabled when when I’m older or something have, no, no, no, no, no. Because this is when you have the most loans, you have the lowest income. You need that insurance policy, because if something happens, you are going to be in big trouble.
Matt Wiggins: Right.
Dr. Z: And in our last show, we went through all the details which I’m going to link through here. The way people can find you is through a link we’re sharing. Right?
Matt Wiggins: Yeah. Really just click on the link. And we try to take this thing and make it really simple, fast and easy. We know you don’t have a ton of time, so we try to make it nice and slick. And so you click on that within 24 to 48 hours, we’re looking at all six of your own occupation options side-by-side and educating you on them and really individualize it to you. And then, you know, if it’s something you want to take advantage of, you can get your resin or fellowship discounts locked in. We’d love to help you with that.
Dr. Z: And this is key, definitely click through because you said something own occupation, which we talked about on the last show, which is so important, own occupation is a rarity in the disability insurance. And it means that if you’re disabled and unable to do your own specialty whether it’s neurosurgery or ophthalmology or psychiatry you get paid, and you can go and get another job doing something else without effecting your benefits. But a lot of disability insurance is not own occupation including a lot of group plans. Right?
Matt Wiggins: Yeah, that’s right. So that’s why it’s so important to learn these things. Definitions actually matter, in disability, insurance, life insurance. It’s like, you know, I mean, it is what it is, right? But disability insurance is it own occupation. There’s even things called riders on them that help you to get special cost of living adjustments, as you’re disabled to help with inflation. There’s things that will pay you partial benefits, if you’re partially disabled. So there’s so much to be educated on. We find a lot of young doctors just throw their hands up and say, Well, I’ll worry about it later at some point in time, but then rates are higher. Your health may have changed. And so that’s why when you’re younger, you’re healthier, especially if you’re in training and you have discounts available. You really want to learn this stuff now. And so our whole business is built around, making it simple and easy and educational. So you can be, you know, doctors can be empowered, and learn what they need to learn. Make a good decision and get it right to the first time.
Dr. Z: Awesome. Well, we’ll have people come click through the link. Thank you again for sharing your wisdom with us, especially when it’s so timely and we are out, peace.