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Disability insurance - two higher earner household

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  • Notsobad
    replied
    Disability is easier to get earlier, and group disability can stack on top of it. I favor buying more earlier and then reassess every 5 years.

    I have there disability policies. ( own specialty) I have group disability on top of that though the practice.

    I may drop the private policies one by one, but honestly it is a small amount in relation to annual income. Probably don’t need it anyone but not emotionally ready to drop it.

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  • childay
    replied
    Consider risk of divorce

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  • nephron
    replied
    I couldn't get disability insurance on myself due to medical reasons. My wife has disability insurance through NWM that I helped her purchase after we became attendings that I have been trying to convince her to drop. I think that a lot of 2 physician couples could go without disability insurance. It is obviously a risk, but probably only for the first 5-10 years or so. You can obviously survive on one physician's income with some cuts in the budget. I think that most will have enough with 5-10 of maxing out your retirement savings in the event that you become disabled if you can rely on the other ones income. If you look at average risks of disability in the general population, you are going to come up with an exaggerated risk of disability for physicians as well. It's well documented that a fair number of people who file for disability just have difficulty securing employment rather then actually being disabled (eg correlation between unemployment claims and disability).

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  • Tim
    replied
    “Our group policies will cover anything catastrophic.”
    Agree that the fear based reasoning is not the way to go. What will change is one (or two) will be involuntarily retired at an early age.
    In the case of a catastrophic event, you really need to put a pencil to it . Your cost of living structure will drastically change. I am talking real costs due to needs. Everything from housing to home assistance you won’t find things cheap and you basically are potentially 24 hr availability depending on how your schedule works.
    Add to the costs taxes and saving for retirement for the disabled individual and that 60% up to $10k shrinks a lot. Consider the potential of kids as well.
    Things like this seem remote. Two physicians can afford it. One physician with a catastrophic disabled partner probably has not really comprehended the costs and impact on the standard of living. You don’t insure out of fear, you insure based on need.
    Can you cover it? If not, get insurance. LTDI is a continuing event. Not a one time event.
    No one comes running with scooters, hospital beds and home assistance. You are talking catastrophic change and a huge void, the working partner can’t be the caregiver.

    Put a pencil to it. Work with numbers.

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  • medicoFIRE
    replied
    Thanks. To be honest never really gave it much thought. I’m only thinking about it now because a couple of colleagues were talking about it recently. I just figured group would be enough in a dual high income household. Ultimately I suppose it’s up to how much each person is willing to roll the dice. If I didn’t have group disability I would probably buy it on my own.

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  • Codfish
    replied
    Relevant post here-

    https://www.whitecoatinvestor.com/di...octor-couples/


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  • Scott at MD Financial Services
    replied
    You should read the policy and make sure you are comfortable with all of the triggers to qualify for benefits and to stay on benefits. The big things to read are:
    What quantifies as a day in the elimination period.
    The full definition of disability.
    The offsets/benefit reductions to the benefit payout.
    Taxation.
    Hope that helps.

    Leave a comment:


  • Disability insurance - two higher earner household

    So how many of you out there that just do group disability with work and forgo the separate individual portable policy? I would absolutely have it if I was sole breadwinner but wife also has high income and we both have employer group DI. I’m not sure it makes sense in our situation. I’m not looking for peace of mind either because I don’t think that way (right or wrong).

    I just don’t think it’s worth the cost. Our group policies will cover anything catastrophic. I understand if I switch jobs that I wouldn’t have it, but I would pick another job that offered group if I happened to switch.

    We are early in career so low net worth. Definitely not FI. I understand the fear based reasoning for buying it, but at what point is group disability enough? The group is 60% replacement up to 10k a month for both of us free through our jobs. My thought process is more about protecting from catastrophic issues like paraplegia and the like. Thoughts?

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