When I married my husband while he was in his first year of medical school, I had no idea that individual disability policies existed. All I knew was when I started my first W2 job out of college as an engineer, my employer offered me a group disability policy. And that’s what I assumed every working person in America gets.
Little did I know that doctors actually need additional individual disability insurance on top of whatever it is they get from work.
Nobody tells you this!!
You are lucky if you have a mentor, a smart friend, follow physician finance blogs and podcasts, or work in the financial industry so you don’t have to learn the hard way.
So, if this is your first time hearing this, let me tell you:
GET YOUR DR SPOUSE AN INDIVIDUAL OWN-OCCUPATION INSURANCE POLICY!
Here are some FAQs to your burning questions. I fully expect you to have more questions than these but this is a start.
FAQ To Getting Disability Insurance For Your Dr Spouse
What Is Own-Occupation Insurance?
Let me start with this analogy that White Coat Investor used:
With death it’s black or white. You are either dead or alive. But disability is complicated. Your DrSpouse is highly specialized as a physician. You want to make sure that you receive a payout despite the fifty shades of gray that a company may define your DrSpouse’s disability.
And that’s the key: your DrSpouse’s job as a doctor can be defined in many ways.
Here are some questions:
- If they’re a surgeon and disabled their hands, can they still teach surgery? (Stephen Hawkings wrote books while in a wheelchair!)
- Would a cardiologist who is dual-boarded physician in cardiology and internal medicine, for example, receive no payouts because they can technically still work as a hospitalist?
You see, who gets to define what a doctor can still do for a living?!!?
“Own-occupation” is a term that gives a water-tight definition to what their work really entails. It makes sure that you receive a portion of your income if they can’t work in their EXACT medical specialty, whether that’s a pediatrician, hospitalist, anesthesiologist, dermatologist, surgeon, etc.
How Badly Do They Need To Get It?
Short answer: badly.
About 1 in 7 physicians actually use their disability insurance at a certain point in their career. And that’s scary.
It’s only after your DrSpouse has a diagnosis (for example, MS, Parkinson’s, or Alzheimer, that typically doesn’t present itself until after residency) that having that monthly amount debited from your account becomes easy.
What If Their Employer Already Offers Disability?
Chances are, most group disability policies that employers offer are not portable. That does NOT mean you should decline it, though! Consider having your group policy IN ADDITION to an individual own-occupation policy, but not as a replacement.
How Much Is Disability?
I’m not going to lie to you, individual disability insurance is super pricey. That’s because the likelihood of using disability insurance policy at least once in your DrSpouse’s career is so high that the price reflects that.
Expect to pay about 2-5% of your DrSpouse’s salary on it.
Which Companies Sells Disability?
At this time of writing, there are only six companies that offer true own-occupation disability insurance. They are called the “Big Six.”
These are the big six in no particular order:
- Standard ✔️
- Guardian/Berkshire ✔️
- Principal ✔️
- Ameritas ✔️
- Mass Mutual ✔️
- Ohio National ✔️
(MetLife used to be one of them but they don’t offer new policies anymore since 2016. If that’s who you’re already with, don’t worry you’re grandfathered in.)
BUYER BEWARE!!!! There are companies outside the “Big Six” that offer inferior policies using weaker, lookalike terms to “own-specialty” to compete with true own-occupation policies!! These companies’ versions sound the same, but they’re not. These policies could have loopholes.
Let me emphasize:
Stick with ONLY these Big Six that are true own-occupation.
What Is The Most Common Cause Of Disability?
Believe it or not, your DrSpouse is not the most likely to get disabled by arguing with you 😂 (I still wouldn’t tell your DrSpouse to mess with you ❤️)
The #1 most common cause of disability is muscular disorders. These include degenerative diseases like MS, Parkinson’s, and Alzheimer’s, which typically doesn’t show up until after residency. #2 most common cause is cancer.
How To Buy Disability?
Buying a disability insurance policy is NOT like GEICO car insurance where you can go to a website and buy it online.
Instead, by law, you have to go through an agent (a human being) who walks you through the medical exam and underwriting process.
When choosing an agent, use only an independent agent, which means someone who can sell from any insurance company. If they can only sell from their own company, they’re NOT an independent agent, they’re a captive agent, meaning they represent their own company’s interest first.
On top of that, use independent agents who have sold at least 20 policies to physicians in their career. You want them to be familiar with physicians and the discounts they could get. One example of a discount is for being a part of a medical specialty association such as AMA, which can be as high of a discount as 20% off of your policy.
Once you have your independent agent, ask them to give you an illustration (i.e. basically an estimate, in “insurance-ese”) on each of the “Big Six.”
Again, here’s the list of the Big Six again (in no particular order) so you don’t have to scroll up:
- Mass Mutual
- Ohio National
When To Buy It?
Intern year is the best time! But if you’re past intern year, get it ASAP.
If they wait too long to buy it, it may get too expensive or even impossible to buy it. A common example of this sad scenario is female physicians who have been/are pregnant. Even a common diagnosis like gestational diabetes could really raise the price or even prevent their ability to buy it.
OK OK OK, This Is A Lot Of Info. I Need To Talk To Someone To Walk Me Through. Can You Just Flat Out Tell Me Which Insurance Agent You Recommend?
We went with Lawrence B. Keller. He is an independent insurance agent and specializes in physicians. We just love him and have only good things to say. For all your questions not in this FAQ, he is your guy!