Disability Insurance Quote Reasonable?

[DerekLava]

My wife is a 32 year old fifth-year surgical resident.  We are in the process of obtaining quotes for disability insurance for her.  We met with an insurance broker and received two quotes.  The broker was pushing the Guardian option saying it is about 90% of the policies he does.

Guardian for $5k/month with a future purchase option to bring it to $20k/month; 90 day elimination period.  The quote includes everything WCI articles have suggested, own occupation/specialty specific, cost of living adjustment, partial disability rider, etc.  The quote was for $362/month level or $208/month graded.

Principal for $6.5k/month; 90 day elimination period.  This quote also includes everything except it doesn't include a specific future purchase option?  The broker said you have the option to increase the policy every three years but didn't get into anything too specific.  The quote was for $430/month level, no graded option.

I've heard good things about Guardian and its a lower cost.  Does this quote seem reasonable?

[DK Unger]

It's a bit of a red flag that the broker is only showing two quotes. Depending on your state of residence, there are 5 or 6 companies that offer true own occupation coverage. It is important for females to seek gender neutral rates where available since the savings for females is significant (30-40%). Depending on where she is completing residency, and where she will be practicing, there may be a gender neutral option with either Standard, MassMutual, Ameritas, or Principal. If you would like to disclose her residency program and the hospital/institution where she will be practicing either in this thread or via private message, I can check for gender neutral rate availability.

[The White Coat Investor]

I prefer when agents either show you quotes from all of the big five-six or explain exactly why they aren't. Why not ask the agent to do that?

[DerekLava]

We are in greater Boston, MA.

[DerekLava]

The White Coat Investor wrote:

I prefer when agents either show you quotes from all of the big five-six or explain exactly why they aren’t. Why not ask the agent to do that?

Click to expand...

I was thinking that too.  He initially just wanted to quote the Guardian policy but I told him I at least needed two; I wasn't going to get one quote and just buy that.  He said he sells 90% Guardian policies, has a couple hundred policies with them (20+yr relationship), and they are the best.  Sounds like it would be worth looking around some more for a second broker to give us a quote too.

[DK Unger]

There isn't a compelling enough reason to select Guardian if a gender neutral plan is available from another carrier. That would be overpaying for the core coverage needed. Since you are outside California, I would request quotes from MassMutual, Ohio National, Ameritas and Standard. MassMutual may have a gender neutral rate set up at your wife's residency program/department. Ameritas may have a discount and they offer competitive rates for surgeons. Otherwise if she knows the hospital/practice where she will be on staff, there may be a gender neutral plan with Principal available there. I am willing to assist with these quotes.

[ChadCFP]

Building on Dr. Jim and DK, you should be able to see Ohio National, The Standard, Guardian, Principal, etc on one page with the same benefits and riders to really compare apples-to-apples.

I just ran Ohio National quick using the basics you provided:

• $5,000 Benefit amount to age 65 and 90-day elimination


• $12,000 Guarantee of physical insurability (won't allow me to use $15k on my base)


• Enhanced Residual Rider


• COLA 2-6%


• Pure Own Occ


• Unlimited Mental/Substance Abuse

It came in at ~$224 per month. You can also get a 10% AMA discount with Ohio National or add $1.5M of term life insurance for 10% discount as well. The 10% AMA discount comes from the agent's commission so sometimes they neglect to tell you about it but it is there.

If you use a 180-day elimination (makes sense if you have a solid emergency fund or dual income), takes it down to ~$203/m.

[Scott at MD Financial Services]

That is REALLY high....without know specs on your wife about health but with her age, specialty, benefit amount, and state of residency points to a graded premium of $158 and a level premium of $261 per month with Guardian.  If you went to the other carriers you might get better rates but this is a good starting point for you.

Let me know if we can help further.

[The White Coat Investor]

DerekLava wrote:

The White Coat Investor wrote:

I prefer when agents either show you quotes from all of the big five-six or explain exactly why they aren’t. Why not ask the agent to do that? 

Click to expand…

I was thinking that too.  He initially just wanted to quote the Guardian policy but I told him I at least needed two; I wasn’t going to get one quote and just buy that.  He said he sells 90% Guardian policies, has a couple hundred policies with them (20+yr relationship), and they are the best.  Sounds like it would be worth looking around some more for a second broker to give us a quote too.

Click to expand...

Yup, I'd move on if the agent is saying "Guardian is the best." Sometimes they're the right policy for somebody, but certainly not always. When I evaluate an agent to see if I'll let them advertise on this site, selling 90% guardian policies would probably exclude them. Hard to believe someone is independent when 9 times out of 10 they sell the policy from one company.

[DerekLava]

Thanks for all the insight everyone.  I had been debating to reach out to Larry (LBKCLU) before so I gave him a call yesterday and talked through everything.  He pulled together some great quotes and we're working through a few things.  Thanks again.