Dual physician disability insurance?

[DoubleMDs]

For those of you who are dual physician couples/households, how have you handled your disability insurance? Still maximize for both incomes? Buy less for one of the two if one is a little lower earner? Hard to decide knowing either could cover expenses if one becomes disabled and paying two high income disability insurance premiums would be a sizable amount. Thoughts?

[resident_1]

We both got it while in training. Mine is $117/mo for $5k coverage and hers is $115/mo for $5k coverage.

[Dilaudidopenia]

Two kinda compelling arguments to maxing out both:

1) Your spouse may likely experience a loss of income (at least in the short term) as well if you become totally disabled as they may spend more time helping to take care of you instead of going at work.  Maybe they will go down to 3/4 or 1/2 time?

2) In the unfortunate, however unlikely, case that you get divorced it'd sure be nice to have that extra 5k/mo of benefit.

This stuff is relatively cheap.  Even as I'm looking to increase my monthly benefit for my upcoming attendinghood, the max is still only 1.3% of my annual salary.

I think the question is more from a purely individual perspective.  When can you afford to decrease your policy as your ability to self insure strengthens? Obviously, I don't want to be paying these premiums all the way up to age 65 (or whenever I retire, which is hopefully way sooner than that!).

[Scott at MD Financial Services]

If you are really into saving a few bucks you can buy even less than the $5k, still preserve the future purchase options so that when you are an attending and making more money you can then do the increases.

[childay]

We bought two policies w maxed benefit. One is a graded premium w assumption we will cancel once we can self insure. The comment about divorce above is an important point

[ohehlo]

We have a similar situation. My argument for not getting disability insurance is that in the unlikely event that either of us is permanently disabled, the other person can carry the load without too much trouble... In a sense, we are each others insurance policy. I'm sure there will be a lot of disagreement with this philosophy, but we don't "need" both of our incomes. So instead we play the extremely good odds that we'll both be healthy and productive and retire early. Even 1.3% each year towards insurance is 1.3% further away from FI.

[jhwkr542]

I have DI only on myself, but that's mainly because there's a substantial pay gap between the 2 of us.  It's for a small amount since she can pay for our expenses now but probably not for a disabled husband.  As our lifestyle increases, we'll probably increase it.  I can pay for my spouse in the event of her disability.

[Craigy]

ohehlo wrote:

We have a similar situation. My argument for not getting disability insurance is that in the unlikely event that either of us is permanently disabled, the other person can carry the load without too much trouble… In a sense, we are each others insurance policy. I’m sure there will be a lot of disagreement with this philosophy, but we don’t “need” both of our incomes. So instead we play the extremely good odds that we’ll both be healthy and productive and retire early. Even 1.3% each year towards insurance is 1.3% further away from FI.

Click to expand...

I am in the same boat.  Either one of us could lose our job and we's still be ok.  We're not counting on each other to make mortgage payments, car payments, living expenses, the 2nd income is just icing on the cake.  We don't have another wife and kids at home who would be destitute if either of us could no longer work.  And even without insurance we would still have disability income through social security which would provide a little extra income.  In the very unfortunate, very unlikely event we were both disabled, this obviously wouldn't work but thankfully we have family we could likely depend on as well.

Actuarially we're far, far ahead by simply putting our own money away, living responsible lifestyles and "self-insuring" against this risk.  If anything, that 1.3% figure seems very low.  But even with that figure, that could easily amount to several grand a year which would look far nicer in an investment account compounding for 20, 30, 40 years where we're talking potentially millions of dollars at the end of the road.

[The White Coat Investor]

DoubleMDs wrote:

For those of you who are dual physician couples/households, how have you handled your disability insurance? Still maximize for both incomes? Buy less for one of the two if one is a little lower earner? Hard to decide knowing either could cover expenses if one becomes disabled and paying two high income disability insurance premiums would be a sizable amount. Thoughts?

Click to expand...

I think the place to start is to sit down and have an honest conversation about what the financial plan would be if you were disabled and then repeat if your spouse were disabled. If you're fine with the consequences without disability insurance, then don't buy any. Otherwise, keep buying more until you're fine with the consequences (at least financially).

[Scott at MD Financial Services]

Just keep in mind when you see patients at a hospital they are not typically there alone.  Sometimes a claim on one spouse affects the ability of the other spouse to work so it can have a double affect on the cash flow from the business of practicing medicine into your household.  As an example we have a claim going on right now with a client that broke their neck and is paralyzed but hoping for the best recuperation possible.  The wife is not working (she is a physician as well) but rather choosing to be there with him as he attempts to rehabilitate.  Some claims are easy to say, 'see ya, I am off to work' others, not so much.  Just think about the things that cause a claim from a nerve issue in a dominant hand of a surgeon that makes them disabled which you might say 'see ya' to stage 3 or 4 cancer where you might choose to be with them, only you can answer that.

 

 

[The White Coat Investor]

Scott @ MD Financial Services wrote:

Just keep in mind when you see patients at a hospital they are not typically there alone.

 

 

Click to expand...

I wish that were the case.

[Scott at MD Financial Services]

My point is those that have the choice to be with their loved ones typically would make that choice vs. be at work, if possible.  If they have to be at work to create the income to survive then that is the choice they make vs. tending to their loved one.  Assuming that the disability is a life threatening illness and not just an occupational adjustment (cancer, heart, liver, kidney, stroke, vision, and the such vs. they went skiing and shattered their leg with numerous pins in it with follow up PT for extended periods of time), the clients we have in this situation typically have the spouse there.  Everyone has choices and what is right for one is certainly not necessarily right for the next person but just know there are pros and cons to both sides of the decisions.  It is just a matter of options vs. obligations.  Certainly if you have a big stack of cash then you have options but people early on in their careers may not yet have that big stack of cash.

[The White Coat Investor]

I love that you think everyone has loved ones. I wish I could have you come shadow me on a night shift some time. There truly is "another half" in society.
Imagine you get so drunk you fall down and sprain your ankle. Some passerby calls the medics. They bring you to the ED. Your ankle x-ray is fine, but you're sloshed, way too sloshed for us to just discharge you. The nurse asks, "Who can we call to come get you?" And there is literally nobody in your life you can call. No family. No friends. No co-workers etc. So you sit on the gurney for a few hours until you're sober enough that I'm not worried you're going to hobble out into traffic.

One of the great things about being in the military was there was ALWAYS someone I could call to come get an airman/sailor/soldier/marine. There might not be anyone else, but his first sergeant will come get him. That is not the case in civilian life. It's not rare either.

Imagine getting admitted to the hospital for 3 or 4 days and NOBODY comes to see you the entire time. Happens all the time.

[Scott at MD Financial Services]

I fully understand that our whole society does not have it together but I was speaking of the WCI community since i was commenting on the WCI forum board and not some social services board.

Believe me I know how the other side lives since one of the business I am a partner in is a condo rental company in Denver.  Our latest shake your head moment was we just had a tenant ask if they could skip their rent this month because they had spent the rent money on a new tattoo...they had to move out last week.

[Craigy]

I think Scott is getting at how people like us on this forum would probably want to be with our spouse if he/she was in the hospital and/or suffering some disability.  The other half that the editor is talking about probably don't buy much in the way of insurance.   

But then again, one of my bosses told me that he didn't take any time off when his wife had each of their five kids, and he holds himself out there as a family man.   :lol: