We know how hard it is to balance the budget when you’re in residency. The average resident salary is around $50,000. There’s a compelling need to protect as much as $15,000,000 in future income as a physician against the very real risk of a career-wrecking disability that could happen to anyone – and yet there are multiple competing demands on every dollar.
But there are easy ways to save money as a resident and intern and lock in valuable disability protection now, even on a limited budget.
Consider the following options:
Graded Premium
Under the graded premium concept, premiums start very low – easily under $100 per month. Graded premiums increase gradually over time, but you have the option to lock in a level rate at any time. This is a great way to get coverage in place right away, even though cash is tight.
This can be an excellent way to get the policy you really need to protect your income at an affordable rate while you are young – especially if you’re good at saving.
At some point, you will want to lock in a level premium. That keeps your premiums from continuing to rise as you get older. You will have the option to do so on or about your policy anniversary every year. The sooner you lock in your premiums, the more affordable it will be to keep that policy active throughout your working years.
But the graded premium makes it affordable to get a robust protection plan in force now and save money.
Multi-Life Discounts
Friends make everything better. If three or more residents at the same institution buy a disability plan at the same time, each may qualify for a discount of up to 10% for males and as much as 40% for females—forever (as long as your premiums are paid on time). That could translate into as much as $25,000 in savings over the life of your disability policy.
Age and Health Discount
Don’t forget that you get a substantial discount on disability coverage just for being relatively young and in good health. You will most likely never be as healthy as you are now, and you will certainly never be as young again as you are now. That counts for a lot in the insurance world.
Further, if you plan to go into a fellowship, consider buying coverage before you make a formal commitment. Disability rates are partially based on medical specialty – with some paying more than others. For example, internal medicine physicians pay lower rates than cardiologists. Buying a policy before you declare your fellowship could save thousands of dollars over the course of a career.
Don’t wait. Disability insurance is not going to get cheaper for you over time. And with graded premium and multi-life discount specials for residents, it may never be as affordable – even given your current budget – than it is right now. Save money and protect yourself today!
Invest in Your Tomorrow
Want more information about creating a financial plan? Schedule a financial planning consultation with a certified professional.
