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” s up everyone. This is dr. Webb here. Thank you guys for watching this video video make sure you subscribe new videos coming every week today we re going to about disability insurance.
What is disability insurance. Why is it important some features of it and also when should you get so i have bill armstead here. He s gonna tell us all about that how you doing bill. Today.
Dr. Webb. Who are you i ve been a great go ahead introduce yourself to the viewers and tell us who you are yeah. No problem my name is bill olmstead.
I m a disability expert with disability quotes calm a guardian financial representative and over the last 15 years. I ve got almost 100 million dollars of enforce protection for clients for disability and life insurance. Awesome so when someone mentions disability insurance because when i first started read and see i didn t know what it was i didn t hear about it until i got in residency when someone talks about disability insurance. What is that he break it down in layman s terms.
Yeah sure i in the biggest sense. It s it s a type of insurance policy. That protects your income in the event. You become sick or injured and can t work disability insurance pays you a monthly income so that you can continue to pay your bills.
Okay and what i didn t know when i was kind of first started off and redden s renze and also when i first came in physician. How important it is because you go through all these years. You spend four years in college. Four years in med school.
And then you get your residency and then some something could happen you can get sick you can get ill if you were surgeon you can injure your hands that s when i realize how important disability insurance when do you suggest that people should look into and obtain this type of insurance as medical students or should they get it once a graduate medical school. Sure i met achill students are certainly in residency is a great time to start looking at it because you can get some special discounts associated with the policies and a lot of residency programs and like you said. You guys have put in a lot of time and energy and money into training for your craft. So it makes sense at that point to start to protect the future earnings that you re going to have once you graduate okay and what about other professions like nursing or pa nurse practitioner or any other i know i kind of mostly focus on the medical field.
But what about other fields outside of medicine like engineer and if someone wants to obtain disability insurance for that as well sure any anybody who depends on their income. So it s not unique to physicians. Although physicians and people in the medical market or certainly. Large large inch have large interest in disability coverage and protecting their income.
But we get requests from people across the country and nurses are actually are our number one requested occupation. So we get a lot of lists for nurses too to protect their income you know you guys see every day. What happens when somebody doesn t go back to work the next day because of a medical condition so it s pretty forefront in your minds. But engineers and business owners dentists anybody like that relies on their income and has as an income to protect should be looking at at doing that with disability coverage.
Okay. I know you mentioned being on the front lines. I see it all the time especially in trauma surgery..
When we have patients that come in and they may injure their ankle. And it s a injury where they can t place weight on it for three to four months and if they are the sole provider for their household. This is their only source of income and they can t go back to work. I think that s when i think disability insurance is key and just the other day.
I was about to do a surgery on someone who had broke his big brother s hip and then his wife had came into the room. And she has said it ll be all right and as she called his name it ll be okay. Everything s going to be okay. Did did we get that disability policy through your job.
And he was like i honestly don t remember and at that point. I was like man disability insurance is so important you don t want to be in that situation where you just like you asking yourself i wonder. If i click the checkbox on this i wonder if i filled out the paperwork for its and disability insurance. You don t want to be in that situation.
So that s a real true story that happened just the other day because i know some jobs they provide disability insurance for you how s that different by obtaining your own sure so a lot of you re right a lot of employers do provide disability coverage for you. But it s not the same as an individual policy. The individual policies are are generally much more comprehensive in terms of what they cover there s also tax benefits to the individual policies that you don t have with the group policies. If you have a good policy through work and your employer s paying that premium then those benefits.
But we re going to be taxable to you when they re received. Whereas an individual policy. Receive is received on a tax free basis. Generally there s also differences in terms of what it means to be disabled between those two types of plans.
A group plan at work is probably going to pay you for a couple of years. If you came to your job. And you re not doing something else. But after that period of time they really look to see is there another job that you can do where as an individual policy can be structured where its own occupation.
Where it covers you in your specific job your specific medical specialty. Even so if you can t be a trauma surgeon you would receive benefits. Whereas with a group plan. If you decide to be a primary care doctor.
Because you can t be a trauma surgeon. There s really a lot of plans out there aren t going to pay you so there s differences in quality coverage between group and individual and there s obviously differences in terms of you know portability you can t take a group plan with you if you leave the employer. Whereas. An individual plan does follow you from employer to employer that kind of thing okay and you briefly spoke about the different types of disability insurance like on occupation and true occupation can you briefly explain what that is and how should one decide like which ones you get yeah so the best type of disability definition out there is is own occupation okay disability insurance is really the only kind of insurance policy that doesn t have a standard by which everybody gets paid with auto insurance you know you go wreck your car and everybody pretty much pays the claim in that situation disability insurance.
It s different some policies will pay if you came to your own job. Which is the best kind some policies will pay you if you came to your own job. So long. As you re not doing something else and some policies will pay you if you just can t do any job.
The best type and the kind that most physicians look for is something that s best specific to their medical specialty. So again with the trauma surgeon. If you can t be a trauma surgeon..
You probably could still do some other type of work inside of medicine. But you re not going to make the same kind of money so you want to get a policy that pays you if you can t do your specialty. Even if you decide to do some other type of work inside or outside of medicine. And that s called the own occupation own occupation and specifically you can get the policies that are medical specialty.
Specific that s that s the best type okay so say for example you know to give two different scenarios. Your resident going through your training and something happens to you whether you get really sick come up with the autoimmune disorder and you just can t complete your internal medicine residency. You re not able to work anymore because of that after a maybe a grace period. You don t have your resident salary anymore because you know you re not doing your job.
But if you had disability insurance. You will receive an income that s tax free through the the insurance company and they will pay you up until. How long does that usually less generally till age 65. But you can choose you can choose the benefit period.
Some policies can pay longer some policies might pay shorter depending upon what s important to you. But typically age 65 is a typical long term benefit period. Okay and on the kind of later on during the years once you complete your residency. You know you re out you re making let s say three hundred thousand dollars per year.
You have a house you have a car you have a family to take care of you have bills and all of a sudden you just can t work anymore maybe you are a surgeon and you injure your hands or you come up with multiple sclerosis you can t operate anymore at that time your income is really crucial and having some type of disability insurance is probably it s extremely important because you don t have income you can t play you re over it so that s kind of on the other extreme and why it s important as far as i understand sure and that s exactly right when you re in residency. Which you re really protecting against is future earnings you know in residency. Obviously salaries are much less than when you get out and i m a practicing physician. But the income potential in residency is still there so it s important to get a policy while you re in residency that covers not only your your salary and residency.
But also your future and you can do that by what s called a future increase option so a lot of residents will buy a relatively small policy while they re in residency. But have the option of increasing that without any more medical questions when they get out they start making more money. So you buy a policy now and residency hopefully with a little bit of a discount. Because there s a discount associated perhaps with your residency.
Program then you get out you. Start making. 300000. You can increase that policy.
Without going back through. All the medical questions again and obviously once you re making. 300000. You want to have a higher benefit amount to cover your your higher expenses.
So the policies can adjust based on your income as you continue to make more got you and how much is a how much coverage should one expect as it say for instance as a resident and then as a staff position. How much coverage should you expect to purchase so most insurance companies will give you somewhere between fifty and sixty percent on a tax free basis of your gross ironically as you make more money that percentage goes down so someone making half a million dollars isn t going to get the same income replacement percentage as someone making fifty thousand dollars. But it is tax free so by the time you factor in the you know the fact that your 300000. Salary is certainly not tax free.
The insurance company is going to replace roughly in that situation probably sixty sixty five percent of your of your gross income and what kind of features when you re looking at disability policies. There s a lot of different companies out there like how should physicians med students. About medical personnel non medical personnel..
What kind of features should they look for in a good disability policy. If there is one like sure so we talked about own occupation. I m a big believer in that i think that s really important so look for a policy. That s got own occupation coverage.
That it protects you in your area of medicine or your specialty in in whatever field that you happen to be in look for a policy. That s got partial or residual disability benefits associated with it because not all claims are total not all disabilities are what you re out of work full time a lot of them are you re working in your specialty. But you re just seeing fewer patients or working fewer hours. But you still have a loss of income.
So you want to make sure that the policy covers you for a partial or a residual disability. As well you want to make sure that it s non canceled. I m guaranteed renewable that means the premiums are locked in and won t increase as you get older and the insurance company can t cancel or change the coverage for any reason. If you re younger a cost of living adjustment riders important so that the benefits increase to keep pace with inflation.
A future increase option rider. We talked about a minute ago. So that you can lock in your ability to buy more coverage as your income increases without having to go back through medical underwriting is a nice feature to have especially if you re coming out of residency and expect your income to grow. And then there are other features that are maybe a little bit less important that are nice to have like coverage for student loans a lot of physicians obviously have student loans if he became disabled that this particular feature pays those student loans for you and coverage for retirement income.
So a lot of people you know obviously maxing out 401ks and saving for retirement. But if you become disabled that savings generally stops or certainly reduced so you want to make sure that you have coverage that continues to pay for what happens after 65 and the insurance policy benefits stopped that will continue your retirement savings. So those are there s some of the things to look for in a good quality policy. Got you in i didn t really know about the paying back your student loans.
Because that s one of the things especially if it s through the government that can never forgiven. But you can add that to your policy to have your student loans paid back in the event that you re not able to work. I didn t know that that s right that s pretty good no and how do you choose between a lots of different disability companies out there companies that provide disability insurance. How do you choose between which company to go with um.
It s important to have a company that s got all those provisions that we just talked about that s that s one way to do it you want to make sure that the contract fits. What you re trying to accomplish and you want to make sure. It s got those features in it and then you want to make sure that they re a you know obviously a leader in the industry that they ve been doing disability insurance for a long time that they re well respected and rated by the independent rating organizations. Am best standard poor s moody s and fitch.
You want to make sure you look for an a rated insurance company. That s got the financial backing to you know pay a claim that might happen in you know ten or twenty or thirty years from now. So that s that s very important as well okay awesome so disability surance. Very important that s one of the first things that i made sure that i got when i became a physician because i realized how important it was and like i said the other day before taking a patient to surgery had broke his hip.
His wife had leaned over to him and say hey did you get that disability policy. And he said. I don t recall if i did or not you definitely don t want to be in a situation like that things happen i don t know the exact percentage of how many people actually get sick between the ages of 20 and 40. But it is a fairly high amount of people who do and you just don t know that something may happen to you you have to protect yourself.
Especially going through the years as a physician you go through all this training both or all these years you need to protect yourself. So i think it s extremely important. I would highly recommend it if people out there wanted to look into more about obtaining a disability policy or learning more about it..
Where can they go to do that you can request a free quote through disability quotescom. The district the link. I believe is in the description of the video you can certainly get a for some free information. No obligation quote from us on that site get a good sense as to what it costs we have a nice instant quote tool.
There that you can kind of see what you should expect to pay. But then you know reach out to us via email or call me directly three zero one nine one nine one nine nine zero and i ll be happy to walk walk anybody through the options in terms with what might be appropriate for okay so basically it s pretty simple you just go to the website disability quotes com and then you get a free quote from you guys and what s the steps after that what s an express s. So once you once we presented the quote and we ve talked about it make sure. It s what s appropriate for our clients.
Then there s a short application process to go through it s all online. So we can you know gather the information and get you medically underwritten. You get a lot of people get a free blood test out of it they ll come see you for that make sure that you re you re in good health. And then issue the policy the whole process takes three to five weeks depending upon you know medical history and and how much there is to obtain okay and that s why it s probably better to obtain it sooner than later and also do you think it s cheaper to obtain in reading z versus wait until you get out yeah.
It s definitely cheaper because the prices are locked in at whatever age. You are when you buy it so if you buy a policy at 25 or 30. That s going to be a lot less expensive than if you buy it at 35 or 40. They lock in the rates at whatever age you buy it and then as i said there s oftentimes.
Some discounts associated with different residency programs that we can take advantage of okay. And just some general numbers. Just so the viewers can have a kind of general idea of how much these things cost if i had to just put a number out there i would say it ranges probably from person to person. But maybe two to four hundred dollars per month is that yeah depending about how much coverage.
Obviously good rule of thumb is you know three to five percent of your gross income for a good quality policy sometimes lower sometimes higher depending upon health and again how much how much coverage. You qualify for based on your income and how much you want okay because i know as residents. We don t be paying a lot and a lot of residents or resident physicians. They are concerned about having that extra income to pay for disability insurance.
But i think it s important i think it s a great investment. So i would highly recommend it to everyone out there as soon as you become a physician or even in medical school. Start looking forward you don t want to go through the years and be put in a situation. Where you re wondering like hey did i get that disability insurance or am.
I going to be covered if i can t complete my training or be a doctor. Anymore so bill. Thank you so much for explaining and breaking down. Like what disability insurance is telling people.
One more time your website and also your the phone number for you yep. Disability. Quotescom. And feel free to request a quote from us there or call me directly at three zero one nine one nine one nine nine zero and again the links directly to our physician page on our site is in the description of the emails use that use that linux easiest way to get in touch with us.
Awesome and for everyone else thank you guys for watching this video make sure you subscribe new videos come in every week. You don t want to miss them we ll see ” ..
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