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Medical residency can be a very trying time in your career. There's lack of sleep, lack of money – and the accumulation of student loans. It may feel overwhelming to even think about your financial future when you are trying to get through your day-to-day responsibilities.
KF Financial has specialized in helping medical students, residents and physicians for over a decade. Based on our experience, we:
- Understand your unique situation, needs and complexities.
- Can guide you to the most beneficial disability insurance policy
- Your most valuable asset is your ability to earn an income. For medical residents like yourself, future income is the payoff for your years of training, hard work and accumulated debt.
- Physicians' jobs are very physically demanding. Consequently, they are at a much higher risk than other professionals to become disabled in some capacity.
- Your student loans do not go away if you become disabled.
- There is no better time for a physician to consider purchasing a personal disability policy than during residency. Since policies are based on your situation at the time of application, you have the opportunity to put yourself in the best light and lock in a policy based on your current age, health, and many other benefits.
- You will never be younger than you are now so rates will be less expensive.
- Qualifying for disability insurance can be difficult, so it is important to apply before you have any medical problems or conditions. Once you have the policy, insurance companies can’t take it away from you as long as you pay your premiums.
- Insurance companies realize that medical residents have great earning potential. Therefore they allow you to purchase over and above what another professional would normally qualify for.
- If you are considering going on to do a fellowship or a riskier specialty, if may make sense to purchase your policy early since you may be in a better occupational class, giving you better rates. Once you have your policy at those rates, you will still be covered in your new specialty, but possibly at a reduced rate.
- By making a responsible decision early on to purchase a policy, you build the platform to have your policy follow you for your career.
Often, your residency program will already have a group policy in force. These typically offer a $2500/month benefit. Because group policies can’t discriminate regarding who they offer coverage to, they often lack the important provisions of a personal policy.
- Your group policy may require you to be totally disabled and not able to work in any capacity before you can receive any benefit.
- The benefit may be taxable income to you if the employer is paying the premiums.
Some group policies will allow you to convert your group policy into an individual policy at the conclusion of your residency. While at first glance this sounds like a great deal, there are some important considerations:
- Inferior benefits. Since the policy doesn’t require any medical underwriting and doesn't limit who coverage is being offered to, a group plan typically cannot offer benefits that are as good as those of a personal policy.
- Exclusions. There are often many exclusions on these policies (act of war, limited mental/nervous coverage, pregnancy)
- Not as flexible. Post-residency group policies offer a limited amount of future increase options. This may restrict your future benefits as your needs change.
- Not true own-occupation disability insurance. These policies often do not offer a true own-occupation definition of disability. These policies tend to be a one size fits all approach and may not be suitable to your needs.
- Possible future premium increases. Some of these policies reserve the right to increase your premiums in the future.
- A good solution for those who are uninsurable. If you are uninsurable or have medical problems, and are unable to obtain a personal disability policy, group policies are a great way to get disability insurance.
If you are concerned about paying for your disability insurance during residency, there are several things we can do to reduce your premium as much as possible.
- Some companies allow a “graded” or increasing premium. This is initially less expensive and your premium will increase each year. If you wish to lock it in at a later time, you may do so on any policy anniversary.
- You may choose to simply supplement what your group policy already offers and load up your policy with increase options. This will allow you to keep your premium low during residency and still reserve the right to increase it in the future without any medical underwriting.
As a physician in your last year of training, you have a couple options when it comes to disability insurance.
- You can take the special resident offer amount of $4,000 a month regardless of current income or group benefits.
- If you are graduating and already have an employment agreement signed for your first year income outside of residency, we can use that agreement as income verification to issue you a higher amount of coverage now.
KF Financial offers these special limits for medical residents, interns and first-year physicians, regardless of current income. No financial underwriting or documentation is required.
Benefits:
- First-Year physician: $5,000/month coverage
Fellows and residents in their third year or greater: Up to $4,000/month over and above any group coverage
Residents: eligible for up to $4,000/month benefit (regardless of any group benefits)
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