GSI disability insurance options for graduating resident

[psychdoc06]

I'm off-cycle and finishing residency next week. I got a very late start thinking about disability insurance (now kicking myself for it) and just a couple of weeks ago I contacted the agent/broker who manages the group disability policies for my training institution. I have two pre-existing conditions that I disclosed to her, and she ran them by several insurance companies (without identifying me) to get an idea of what they would be able to offer. Unfortunately, they either stated that they would not insure me at all or they would offer only a policy that would exclude those conditions, be limited to a 5-year benefit period, AND would cost up to 50% more in premiums. So pretty much useless. Because of this, I didn't even attempt to apply for these regular policies and we are instead looking at GSI policies.

Unfortunately, she presented me with two options (Principal and UNUM) that have quite low monthly benefit amounts. The better option (UNUM) has a $5,000 monthly benefit, which I know is not unusual since I'm receiving this under resident status, but the future purchase option is only for a maximum of $3,000 - meaning that the most I could ever be covered for is $8,000/month. The premiums for this policy are not bad - $233/month - but I don't feel comfortable with that benefit amount. If I could guarantee that I could increase to the $8,000 within the next couple of years, I'd be ok with the policy, but I'm also unsure whether I'll actually be able to exercise the FPO benefit anytime soon. My new job provides an employer-paid LTD group policy that replaces 60% of income (minus any deductible income like SSDI, but no cap as far as I can tell). From what I understand, the financial underwriting that is done when you try to increase coverage through the FPO takes into account any other LTD coverage you have. The agent I'm working with suggested that as long as I'm covered by this group policy, UNUM would probably not approve a coverage increase because then I'd be over-insured. Because of this, I may get stuck with just the $5,000 individual coverage as long as I'm at this job. I would be more comfortable with this if the employer group LTD was a better policy, but it's "own occupation" for only the first two years and there's a 12 month exclusion for pre-existing conditions (i.e. you have to work and be insured for 12 months + 1 day before they will cover pre-existing conditions).

Does anyone know of any other options? Is the monthly benefit amount and the max increase pretty standard for GSI policies, or might it be possible to find something with a higher benefit? I have to make a decision within a few days but am worried about settling for a policy that is "better than nothing."

Thank you in advance!

[Scott at MD Financial Services]

Sounds to me like you have an option to get something which which is better than nothing, I would suggest you take it and when opportunities present themselves continue to add to your coverage, assuming you need the coverage.  When you think about the $5,000 per month benefit it will typically put a roof over your head, food on the table and keep the utilities on.  Your situation is very common, I would say 1/8 that inquire about coverage's with us have a health issues that is going to severely limit the coverage or simply eliminate the option so you are not alone by any means.  As for the higher benefit you should be able to get $6,500 to $7,500 'new in practice physician' from the same carrier that the rep took you to.

Let me know if we can help further.

[RosieQ]

Agree, something is better than nothing. Take the guarantee while you can. 5k of solid coverage (likely to be 8k as an attending) is likely enough. Insurance is supposed to cover for catastrophe, not make you want to slide out of practice as soon as possible with a comfy paycheck. Combine this 5-8k with a group DI policy that will have more limited coverage but will absolutely cover you for a catastrophic disability and I think you will be well insured.

I have a $5400/month private DI policy and a 5k group policy and personally feel like it's enough (but my partner is in medicine too and we live relatively simply).

[psychdoc06]

Thank you for the input! I agree, this policy is much better than nothing; I just wanted to make sure I wasn't missing out on any other possible GSI options with a higher benefit before taking it. Apparently the $5,000 is the maximum for these policies for graduating residents (the non-GSI ones we have go up to $6,500-7,500 max). After discussing with some other folks, it sounds like this is the best that I can do right now, so I'm going to take it.