AMA Life Insurance

[sthorp]

I am a PGY 1 General Surgery Intern currently  on a relatively slow SICU call. I'm working to set up life and disability insurance. I am married with no children in the foreseeable future. I plan on purchasing the following amounts

Life: total of 1.5 million term life insurance and am debating 20 vs 30 years.

Disability: $6000 monthly with future purchase option, likely through Northwestern Mutual

Here are my questions.

1. AMA has been spamming me with offers of 1 million term life insurance for a premium of ~$22/month. However, upon researching this they have a couple different options. One is "level term" and costs more the other is "pure term". What's the difference and what is the catch? Why is their pure term option approximately 50% the price of anything I can find by shopping around online?

2. 20 vs. 30 year terms for life insurance. I'm thinking of going with a 20 year term and then buying an additional policy in about a decade. Since I plan to move to Africa to work pro bono once I am done with residency, I likely won't reach the point of canceling my life insurance policies until I am in my late sixties. My rationale for going with twenty year term now is to keep the premiums low while in residency to fully fund my IRAs, 403b and a taxable investment account through vanguard. Thoughts?

3. Disability insurance. What an unmitigated nightmare! Northwestern Mutual has an attractive definition of "Medical Own Occupation" and, unlike other companies, won't cancel the policies when I move international. They are a little more expensive then some of the competitors but, I havn't found other companies that will write into the policy that any disability incurred while out-of-country will be covered. What is your guy's experience with Northwestern Mutual? Thoughts on this?

 

Thanks,

[Scott at MD Financial Services]

The Pure Term is probably a 1 year term or annually renewable so it goes up with each policy anniversary.  The underlying contract for AMA is AIG, which for some is a real problem since they were the lighting rod of the 2007/08 financial meltdown.  I know for myself we don't work with them due to what they did and what they subsequently did to their policy holders to help dig themselves out of a hole.

As for the disability the two questions you need to ask are 1:  If I can't do my specialty and go do another job making equal or more than I was making in my specialty post a disability how much do I get paid from this policy?  Don't listen to the mumbo jumbo about this or that there should be a very clear answer of 100% IF it is a true own occupation but alas with the Medical Own Occupation definition from Northwestern, the answer will be $0.

2:  All of the major carriers will cover you out of the country so that is not the real question to ask and they should have been more forthright with you since I am sure the agent knew the intent of the question, the real question to ask is "if I get hurt or sick out of the country how many months will you pay benefits before I need to return to the USA for care and treatment"?  Be sure to ask the agent to put it in writing.....good luck!