Asset and income protection.

[cyanide12345678]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

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[EctopicFetus]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

1) 14k a month. Max allowed.
2) 3.3m
3) 500k
4) yes

 

[emergentmd]

1) 12.5K but its tax free so similar to 200K income
2) 3 Mil til I am 55 which I should be self insured
3) bought whatever comes standard but have umbrella
4) 1 mil umbrella to cover all rentals, accidents in my home/car that is over the limit.

 

[BoardingDoc]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

1: Between my group and personal policies: 16.8k/mo
2: 3M
3: 300k plus whatever my Chase card gives me
4: haven't set it up yet, but plan to.

 

[southerndoc]

1. Personal own occ $10k/mo, coverage through ACEP additional $10k/mo
2. $2 M (both term)
3. $500k
4. yes, $5 mil

 

[Porfirio]

1. Personal own occ $10k/mo, coverage through ACEP additional $10k/mo
2. $2 M (both term)
3. $500k
4. yes, $5 mil

How much a month does all this cost? Just curious how much to expect.

 

[cyanide12345678]

How much a month does all this cost? Just curious how much to expect.

It depends on a lot of factors, essentially what age a person gets these insurances and their baseline health condition. I have just started getting some of these insurances. My disability insurance is $200 for 10k monthly benefit and life insurance is about $100/month for 1.5M, 30 year term policy. I don't have any real net worth yet to have umbrella insurance.

 

[s109442]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

I carry zero insurance except the mandatory stuff. I don’t like having another 4-5 companies chipping away at my money every month. Screw it.

 

[GonnaBeADoc2222]

I carry zero insurance except the mandatory stuff. I don’t like having another 4-5 companies chipping away at my money every month. Screw it.

You should at least carry disability insurance. You most valuable asset is your income - you should insure it. Foolish not to.

Also umbrella insurance is so cheap. Pretty low cost to prevent a financial wipeout in the unfortunate instance you hit a car on the drive home from a night shift.

 

[southerndoc]

How much a month does all this cost? Just curious how much to expect.

A lot. About $4k/year for one disability, $3k/year for the other, $800/year for umbrella policy, $3500/year for car insurance (don't ask, we have some expensive cars). Umbrella requires homeowner's insurance to be on same policy ($2500/year). State Farm also insures my wife's wedding and engagement rings under a separate policy. Life insurance policies are about $1k/year for one and $2k/year for the other.

 

[anonperson]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

1. $11K/month coverage
2. 2 million in a term policy. Am in the process of getting another million in coverage.
3. Yes. If you get an umbrella policy they typically want your car insurance coverage to meet certain requirements.
4. Yes. Currently $1 million.

Also have homeowners insurance and an earthquake policy due to location.

 

[emergentmd]

How much a month does all this cost? Just curious how much to expect.

Disabiliy - 1500/yr and get Own Occ
Term life - 1300/yr, get this when you are young/healthy as it is much cheaper.
Car - Can't really count this b/c your required
Umbrella - $1200/yr but I think I have 2 mil.

So about 4K coverage which is not much more than 1 shift.

If you don't get disability you are misguided and essentially risking tens of Millions over 1-2kyr. So many things can happen. Bad accident or bad medical disease just way too common.
If you don't get term, have a family, and not self insured you are misguided as you are risking your family's livelihood over 1-2k/yr
Umbrella - Getting it is not a big deal as you likely won't ever use it but I have 7 rentals and need to ensure someone won't do something stupid. good piece of mind for 100/mo.

 

[emergentmd]

It depends on a lot of factors, essentially what age a person gets these insurances and their baseline health condition. I have just started getting some of these insurances. My disability insurance is $200 for 10k monthly benefit and life insurance is about $100/month for 1.5M, 30 year term policy. I don't have any real net worth yet to have umbrella insurance.

But what if you cause a bad accident, damages are over your car insurance limits?

Are you not liable for this and they can go after your future wages/savings?

 

[Porfirio]

Does the umbrella policy include your wife?

 

[emergentmd]

Does the umbrella policy include your wife?

Umbrella covers all of our property/cars so I assume so. Thanks for asking b/c I am going to make sure she is put under my policy.

 

[southerndoc]

Does the umbrella policy include your wife?

It covers excess above your car and homeowner's insurance. As long as she is listed on those policies, then she will be covered.

 

[cyanide12345678]

But what if you cause a bad accident, damages are over your car insurance limits?

Are you not liable for this and they can go after your future wages/savings?

I actually was contemplating bumping my car insurance liability coverage today which is when I started the thread to see what others were doing. As of today, I increased my liability coverage from 50k/100k to 300k/500k. Once I pay off loans and have a positive networth, I definitely plan on getting umbrella insurance. Right now if I get sued beyond my auto insurance liability coverage, the only way out would honestly be bankruptcy I feel.

Whats the cost of the umbrella insurance for you guys? Also, which carrier are you guys using?

Edit: Emergent, keep in mind that I'm slowly moving away from the "I'm a broke resident" mentality. My networth is still in the red, still 7 months of residency left. Even increasing my liability coverages to such high levels today felt like "too much" which is why I sought advice here to see what others were doing. The life insurance of 1.5M felt like A LOT, but sounds like everyone has a larger policy than that Guess I'm still a broke resident

 

[NITRAS]

Life insurance is meant to protect your dependents from your death. 10-12 times your income is a general ballpark to about replace an income (assuming your investments make >10% rate of return. )

You probably don’t need 1.5M now, but you probably will need more when you get your big job and your lifestyle grows. And I wouldn’t get it before having wife and or kids.

 

[miacomet]

Leanfire, so only a tiny private disability plan for me, plus what the hospital gives me and a 500k life policy through work.
Max limits on auto and a 5mm umbrella policy.

 

[cyanide12345678]

You probably don’t need 1.5M now, but you probably will need more when you get your big job and your lifestyle grows. And I wouldn’t get it before having wife and or kids.

I have a spouse, I've signed for my big job and am 7 months away from starting, my wife and i are now talking about starting a family as well. Hence the 1.5M policy.

 

[KGflyboy]

Everybody always seems to strongly recommend disability insurance. But what about people who can't be insured for reasonable costs? A significant portion of people have some sort of chronic medical problem that makes them uninsurable. Many disability companies flat out refuse to insure these people. If they do offer a policy, the premium is well into 5 digit range. At what point does the cost/benefit ration make it not worth it?

 

[VA Hopeful Dr]

Everybody always seems to strongly recommend disability insurance. But what about people who can't be insured for reasonable costs? A significant portion of people have some sort of chronic medical problem that makes them uninsurable. Many disability companies flat out refuse to insure these people. If they do offer a policy, the premium is well into 5 digit range. At what point does the cost/benefit ration make it not worth it?

Depends but a good chance its still worth it - especially depending on what the chronic disease is and where exactly in the 5 digits that is.

 

[VA Hopeful Dr]

I'm not EM so my numbers won't have much value here, but a few general thoughts:

You want your disability to mirror your income as much as possible. This is helped since any policy that you buy independently is paid out post-tax. For instance, my job offers 60% of income for disability insurance as a benefit. I make up the other 40% on my own, which since this is post tax actually means its worth a more than 40% of my income. Absolutely get own occupation. Get this either during residency with a rider that allows for increases with salary or as soon as you start your first job out. It only gets more expensive with age.

Life insurance is cheap enough if bought young to not skimp on it. But don't go crazy for no reason. I have less of that than pretty much everyone else here but my wife is also a physician and would continue to work if I died so I have enough to pay off all debts (including mortgage) with enough left for college for all kids and a little bit more. If your spouse either doesn't work or would stop working, you'll need more. Get this as young as you reasonably can as it also goes up with age.

Get an umbrella policy. They are very inexpensive and worth the peace of mind. I have a 1mil policy that I think I pay less than $300/year for.

 

[EctopicFetus]

As far as my costs Disability costs about 3500 a year for my 14k/month own occ policy
Life insurance for 3M I pay 1800/yr 20 year term
Umbrella this will vary a lot for everyone - we have 2 cars rental properties, our main home etc. I cant remember but it aint cheap.

 

[namethatsmell]

Everybody always seems to strongly recommend disability insurance. But what about people who can't be insured for reasonable costs? A significant portion of people have some sort of chronic medical problem that makes them uninsurable. Many disability companies flat out refuse to insure these people. If they do offer a policy, the premium is well into 5 digit range. At what point does the cost/benefit ration make it not worth it?

No easy answer. If your premium is 10k/yr the opportunity cost would be in the ballpark of 700-750k if you instead invested 10k/yr for 25 years and earned an average of 7%. So if you had to use your DI policy it would likely still pay off. However you'd almost certainly have an exclusion in your policy surrounding filing claims in any way related to your preexisting chronic condition(s) so you'd potentially be less likely to have a claim approved in the first place.

If the majors aren't giving you an offer (or a decent one), you may consider getting an agent to get a quote from Llyods for a comparision.

 

[deleted547339]

~20k (part personal, part group)
2.8M - laddered
500k
1M

 

[GonnaBeADoc2222]

Disability: 400/month for 15k benefit
Life: 120/month for 2 mil 30 yr term (married, kid on the way)
Auto: 65/month for 300/500
Umbrella: 330/yr for 2 mil (one car, no rentals)

 

[Old_Mil]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

(1) 10k a month.
(4) Yes, 1 million
(3) No; see #4 above
(2) Enough for my wife; not enough for her to want me gone.

 

[Hamhock]

Is anyone else decreasing their disability coverage as their investment accounts increase?

Using the 4% safe withdrawal rate, doesn't it make sense to decrease your disability coverage each year your investments increase enough to cover the decreased disability?

This savings can then be invested.

HH

 

[OccupyTheED]

Is anyone else decreasing their disability coverage as their investment accounts increase?

Using the 4% safe withdrawal rate, doesn't it make sense to decrease your disability coverage each year your investments increase enough to cover the decreased disability?

This savings can then be invested.

HH

I've considered this down the line although for me personally its too early in the game to consider. I've got a graded policy for now (currently 33, obtained the policy at 31) and the monthly payment will be lower than the level option until age 43. At that point I plan to decrease or possibly even discontinue depending on how much I've saved and how much passive income I have.

 

[Mbekweni]

Is anyone else decreasing their disability coverage as their investment accounts increase?

Using the 4% safe withdrawal rate, doesn't it make sense to decrease your disability coverage each year your investments increase enough to cover the decreased disability?

This savings can then be invested.

HH

I am considering it and will likely drop disability coverage is a stepwise manner. There are usually a few levers that you can pull to dramatically lower your monthly premium. I think that once an attending you should buy up to the amount of DI that you need and then drop any future purchase increase option rider. This can save around 25% of your monthly cost on the original policy, though you would of course be paying more for that additional coverage. You can also drop coverage length. Most policies cover you to age 65 or 67. As you are closer to financial independence you can cut down your disability coverage for 10 years or so, also saving 25-30% on most policies. Keeping in mind that most disabilities pay out for less than 3 years this isn't a terrible statistical roll of the dice if you figure you can pay your living expenses for 10 years and let your existing savings grow to meet your retirement needs later. Finally, you can drop a portion of your coverage. No need for 10k for example if you just need 5k per month as you have more passive income, you've paid off your house/car etc.

 

[The White Coat Investor]

Now that I'm about to finish residency, I'm curious what other docs are doing for asset and income protection.

1) How much disability insurance coverage are you keeping?
2) Life insurance? How much life insurance if any are you keeping?
3) Motorist bodily injury insurance limits? Did you guys increase your car insurance limits when you were worth more?
4) Umbrella insurance anyone?

1) Just cancelled it. Had $7500 in individual and $10,000 in group (not as good, but cheaper and covered climbing accidents which my individual policy did not) for $17K/month total.
2) $1.75M. Probably dump it in another year or two. Was as high as $2.15M at one point.
3) $300K
4) $2M. Thinking about increasing to $5M. No, but may increase my umbrella. Really it's not about your net worth, but more about your liability.

 

[The White Coat Investor]

So about 4K coverage which is not much more than 1 shift.

That's $500/hour for 8 hours or $300/hour for 12, after-tax. Pretty sweet gig you've got.

 

[swamprat]

I currently have disability through MetLife and Guardian. I had a pre-existing condition which wasn’t covered by MetLife but when I added the guardian policy I was lucky enough to be employed by a place that offers a no medical underwriting own occultation full policy up to 5K so I grabbed that As well. I pay prob 3-400 a month or so it’s split up into different payments.

My auto is at 500K/1 mil.

No life insurance for me right now, wife is a doc and we have no debt rlly except student loans.


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[dchristismi]

I am also toying with dropping or decreasing my disability coverage, partly because it has an own-occupation clause, and I'm mostly not doing my own occupation any longer. Ha!
Getting close to FIRE... or maybe I've already semi-FatFired by retiring to my subspecialty but still working? I'm not really sure. I'm working more days but much shorter hours and significantly less stress.

If retirement is doing what I want to and filling my life with meaningful choices, and not *having* to work but choosing to...

Anyway,
a) about 6K, but see above.
b)300K/500K because the umbrella mandated that level
c) About 500K now
d) 2M. Also very cheap for the peace of mind.

 

[swamprat]

I am also toying with dropping or decreasing my disability coverage, partly because it has an own-occupation clause, and I'm mostly not doing my own occupation any longer. Ha!
Getting close to FIRE... or maybe I've already semi-FatFired by retiring to my subspecialty but still working? I'm not really sure. I'm working more days but much shorter hours and significantly less stress.

If retirement is doing what I want to and filling my life with meaningful choices, and not *having* to work but choosing to...

Anyway,
a) about 6K, but see above.
b)300K/500K because the umbrella mandated that level
c) About 500K now
d) 2M. Also very cheap for the peace of mind.

Is ur subspecialty still same occupation class? I was told by my disability guy if it’s the same class if u were to be disabled if goes by what u were doing the majority of the time over the past 12 months or something like that


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