Get It Before It’s Too Late: Disability Insurance

Last Updated on June 22, 2022 by Laura Turner

“What the [bleep] are you doing!? Don’t risk injuring your hands! We’re surgeons for goodness sake,” said my minimally invasive surgical attending as a third-year medical student was desperately trying to catch the elevator for our team on four AM rounds. I’m willing to bet the majority of you have also stuck out your hand to catch an elevator at least once, if not multiple times a day, especially in the hospital. Several people have written about that issue (e.g., This is exactly why surgeons are so fragile. All of them.). This is why you need disability insurance.

The prospect of losing any essential ability to continue practicing within your field is terrifying. It’s a risk to which we’re all prone, whether you’re a medical student, allied health professional student, nurse, tech, physician, pharmacist, physical therapist, or any other member of the medical professional field. Some disabilities are ostensibly easier to accommodate than others, such as an internist or psychiatrist practicing with mobility limitations requiring a wheelchair or artificial limbs. Not to overly rely on the surgical example, it’s a poignant one for comparative purposes: a surgeon trying to practice without sight, touch, and/or dexterous, intact hands is difficult to conceive. I’m sure we could all contribute to a novel about such situations.

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Types of Disability Insurance

There are three types of insurance to consider: short-term, long-term, and supplemental disability insurance. They all have immediate and latent implications. They have varying coverage amounts, perks, restrictions, and waiting periods sold by many companies of varying repute and reliability. 

What are the differences between the different types? These differences are crucial aspects to consider. Board-certified physicians or soon-to-be certified that are 60 or younger and actively working in their field can buy coverage below, equal to, or above their current or projected income (e.g., AMA’s Physician DisabilityPro Insurance). Each level of coverage significantly increases the premium.  For instance, my long-term disability insurance provided through my graduate medical education (GME) entity, which represents many GME provided plans, requires a 90 day waiting period and provides a maximum of 66.6% of your current salary divided monthly. Many will also limit coverage to two years if you’re deemed fit for work in any other realm of life or if you’re disabled by a psychiatric condition. As many of you know, a resident’s income is paltry and usually less than the national average income, further complicated by student loans. Those student loans are the basis of a common perk wherein your insurance will also provide a lump sum to pay off a portion of your remaining student loans specifically.

For residents, the insurance offered by their department is commonly capped at a third of your income, like mine. Residents typically need to look for a supplemental company that would mirror this continuum of fees and coverage, but with prices that may not mesh well with a resident’s typically paltry income.

Choosing Disability Insurance

Shop Early

It’s imperative to do your research early. Buying now from a reputable company will grant you a one-time, low rate with the option to increase your coverage/benefit near the end of residency and during your early career. Your coverage will be comparable to your professional salary, with some companies allowing you to pay a higher premium for benefits that surpass your salary. Some won’t require an exam, depending on age. However, many companies have a maximum age of eligibility (e.g., before turning 60).

Buyer Beware

Avoid disability offers from unfamiliar, aggressive, or otherwise non-professional society sponsored companies. There are plenty of “companies” out there that feed on physicians not having much time. They know we don’t have time to thoroughly research our options, let alone pour over the final print. You don’t want to rely on false comfort that could leave you penniless due to sneaky catch 22 exclusions. I highly recommend going with an AMA-sponsored or your specialty’s professional society sponsored company. These companies are vetted. I consider those options akin to the vetting process of peer review before publishing research in journals. 

Policy Costs

The AMA’s Physician DisabilityPro option allows you to choose your waiting period, the minimum being two months. It also allows you to purchase a benefit that surpasses your current and future income with a higher annual premium. For instance, coverage using a 30-year-old physician living in Texas requesting coverage for a $10,000 monthly disbursement with a 2-month waiting period would pay an annual $1857 premium. The maximum coverage with a monthly disbursement of $15,000 would cost the same resident $2786 annually. The AMA sponsored option for a 30-year-old resident with a 90 day waiting period and a monthly benefit of $3,000 would cost about $40 a month.

My own cardiology attending once gave us a lecture on these issues at the end of rounds. I urge you not to make the same mistake I did in procrastinating or overlooking the importance of this issue. Now that I’m not performing my usual duties in my specialty, I’m ineligible to apply for additional coverage. And what I do have is insufficient to cover my routine expenses, not to mention student loans. Good luck. Be safe. And be smart.