Tweet
I just finished residency and am looking to solidify my disability insurance. I had a policy from residency but am looking to add a little more and would appreciate some input among the different options.
I'm 33 years old, living in CA, have no debt, annual income around 300k per year rising to 350-400k in the next five years as I progress up the partnership track, and have a net worth of approximately 250k.
Getting married in a few months to a general dentist with an income around 140k per year with excellent benefits (public health), huge student debt >400k, savings of about 130k and 5.5 years out of 10 into public service loan forgiveness (we will likely do married filing separately starting next year). We are saving at a rate of almost 200k per year and expect to be financially independent in around 10 years.
We have combined fixed expenses of around $3200 per month such as housing, basic groceries, insurance, transportation and variable "fun" expenses like international travel, eating out at great restaurants that can be up to 4k per month for average monthly expenses of around 7.5-8k ($90,000 per year spending). We are thinking of buying a house in the next few years which might bring our combined spending to around 100k per year, though in the case of disability we could cut back to 50-60k per year if needed and still live very comfortably. Basically, we are pretty close to being each other's disability policy and could support our family on 1 salary alone however I want to have a little buffer to not have to be super financially stressed in the setting of disability.
I currently have 2 disability insurance policies:
1) Private policy through Standard Protector Platinum: $5,600 monthly benefit, $159 per month fixed/level payments, 90 day elimination period, 10 year benefit coverage, excellent partial disability rider. No COLA. I liked this policy term at 10 years since the average length of disability claims is around 3 years and this was a less expensive way to carry a level term policy that I would likely use for the convenience of a modest steady income stream to adjust my life/career in the case of disability while my wife would keep working. I figure that it would be unlikely that there would be a disability that wouldn't kill me but would last for more than 10 years. And if I was wrong it would likely be more severe and I would have social security disability plus a group policy to rely on too. I also have family in the area where we live and could likely move back with them in case of catastrophe and have minimal expenses.
2) Group policy through Hartford: $5000 monthly benefit, $100 per month. 60 day elimination period, Benefit to the age of 65, typical group coverage caveats such as own occupation for 2 years.
I applied for a more traditional policy and was thinking of using this either instead of the above policies or in addition to some combination.
3) Guardian ProVider Plus Limited policy. I would do a graded policy as it is less expensive than a level term for 12 years and I expect to be financially independent in 10 years or less. I could have better coverage early career and then drop it. Unfortunately I did have a low back strain in residency and it was noted on a visit to a doctor. As a result this policy would have lumbosacral spine exclusion, except fracture would be covered. Should I add this policy even with the exclusion? Perhaps even dropping the group policy in order to get more coverage on this one even though low back issues wouldn't be covered?
- $5k per month benefit with 3% COLA $132 per month and rising yearly
- $7500 per month benefit without COLA $175 per month and rising yearly
- $10k per month benefit without COLA $233 per month and rising yearly
Would you add this new extra policy, perhaps subtracting out one of the others? I'm thinking of going with just the 2 versions of private insurance Guardian and Standard while dropping the group policy, then in about 5-10 years switch to just the Standard fixed policy as I will have "pre saved" for retirement and would just need to pay for living expenses while allowing the savings to continue building.
I'm 33 years old, living in CA, have no debt, annual income around 300k per year rising to 350-400k in the next five years as I progress up the partnership track, and have a net worth of approximately 250k.
Getting married in a few months to a general dentist with an income around 140k per year with excellent benefits (public health), huge student debt >400k, savings of about 130k and 5.5 years out of 10 into public service loan forgiveness (we will likely do married filing separately starting next year). We are saving at a rate of almost 200k per year and expect to be financially independent in around 10 years.
We have combined fixed expenses of around $3200 per month such as housing, basic groceries, insurance, transportation and variable "fun" expenses like international travel, eating out at great restaurants that can be up to 4k per month for average monthly expenses of around 7.5-8k ($90,000 per year spending). We are thinking of buying a house in the next few years which might bring our combined spending to around 100k per year, though in the case of disability we could cut back to 50-60k per year if needed and still live very comfortably. Basically, we are pretty close to being each other's disability policy and could support our family on 1 salary alone however I want to have a little buffer to not have to be super financially stressed in the setting of disability.
I currently have 2 disability insurance policies:
1) Private policy through Standard Protector Platinum: $5,600 monthly benefit, $159 per month fixed/level payments, 90 day elimination period, 10 year benefit coverage, excellent partial disability rider. No COLA. I liked this policy term at 10 years since the average length of disability claims is around 3 years and this was a less expensive way to carry a level term policy that I would likely use for the convenience of a modest steady income stream to adjust my life/career in the case of disability while my wife would keep working. I figure that it would be unlikely that there would be a disability that wouldn't kill me but would last for more than 10 years. And if I was wrong it would likely be more severe and I would have social security disability plus a group policy to rely on too. I also have family in the area where we live and could likely move back with them in case of catastrophe and have minimal expenses.
2) Group policy through Hartford: $5000 monthly benefit, $100 per month. 60 day elimination period, Benefit to the age of 65, typical group coverage caveats such as own occupation for 2 years.
I applied for a more traditional policy and was thinking of using this either instead of the above policies or in addition to some combination.
3) Guardian ProVider Plus Limited policy. I would do a graded policy as it is less expensive than a level term for 12 years and I expect to be financially independent in 10 years or less. I could have better coverage early career and then drop it. Unfortunately I did have a low back strain in residency and it was noted on a visit to a doctor. As a result this policy would have lumbosacral spine exclusion, except fracture would be covered. Should I add this policy even with the exclusion? Perhaps even dropping the group policy in order to get more coverage on this one even though low back issues wouldn't be covered?
- $5k per month benefit with 3% COLA $132 per month and rising yearly
- $7500 per month benefit without COLA $175 per month and rising yearly
- $10k per month benefit without COLA $233 per month and rising yearly
Would you add this new extra policy, perhaps subtracting out one of the others? I'm thinking of going with just the 2 versions of private insurance Guardian and Standard while dropping the group policy, then in about 5-10 years switch to just the Standard fixed policy as I will have "pre saved" for retirement and would just need to pay for living expenses while allowing the savings to continue building.
Comment