Is Residency the Best Time to Buy Disability Insurance?

1: Your Health

The best time to buy disability insurance is when you are young and healthy. Bad stuff happens. Look around your ER; car accidents, needle sticks, brain tumors, skiing accidents, ruptured discs, depression, anxiety, MS – just a few of the conditions that could prevent you from EVER buying disability insurance (or worse, from ever getting a job out of training).

Crazy stuff happens – Not long ago I spoke with a 4^th year plastic surgery resident who was disabled by her dishwasher! As she was emptying it, a coffee cup slipped out of her hand and fell towards the floor. She quickly reached to grab it, but it hit the ground and a large shard of glass broke off and severed a nerve and tendon in her right thumb. When I spoke with her she had been out of work for more than six months and was unsure if she would ever get full mobility or feeling back in her thumb.

The average plastic surgeon makes more than $300,000/yr. Over a 30 year career, that’s more than $10,000,000 of lost income.

I totally understand that money is tight and the last thing you want to do right now is take on extra expenses, but if you wait to buy, you are putting at risk your greatest financial asset – your lifetime of income.

Health is fragile and you have so much to lose.

2: Discounted Premiums:

Disability insurance rates are based on your age when you first buy a policy and in most cases are guaranteed to never increase for as long as you own the policy. In addition, many insurance companies offer discounts to residents and fellows.  Buying a policy while still in training could literally save you thousands over your career.

3: A Guarantee to Increase Your Coverage in the Future

Buying disability insurance now gives you the guaranteed option to buy more coverage as your income rises, regardless of your health status at the time of increase. Start out with a $5,000/mth policy now and increase it up to $20,000/mth (determined by your income at time of increase) in the future with no medical qualifications.

Hepatitis, ruptured disc, melanoma, no problem – as long as you are working and you qualify financially, you can increase your disability benefit with no medical questions asked.

4: Cover Your Student Loans

According to the Wall Street Journal, the average medical school debt in 2013 was $180,000. Some loans are forgiven in the event of disability, but only if the disability is deemed TOTAL and PERMANENT. If you have the ability to work in any capacity, your debt will not go away. Consequently, a young resident who suffers a serious illness or injury could place themselves in trouble financially. Being unable to work is bad. Being unable to work AND responsible for a $300,000 loan is catastrophic.

5: Your Future Earning Potential

It may not feel like it, but you already have a lifetime earning value of TEN to TWENTY MILLION DOLLARS!  You’ve already done most of the hard work – you just have to get across the training finish line.  Waiting puts everything at risk. Something as simple as a contaminated needle stick could cost you millions of dollars in lost income.

Disability insurance protects your greatest asset – your ability to earn an income.