Disability Insurance needs for a psychiatrist

[psych007]

I've put off purchasing disability insurance for way too long.  I've read through Jim's blogs and am still not convinced that I need all the bells and whistles that he recommends e.g. own-occupation speciality-specified clauses.  I am not a surgeon, anesthesiologist or ED doctor.

As a psychiatrist, the most important faculty I need working is my brain.  I've seen a quadriplegic psychiatrist working, and with telepsychiatry jobs in abundance, a major medical catastrophe, short of brain damage, would not be considered a financial catastrophe.  I am still considering the top 5 companies [guadian, mass mutual, principal etc], the recommended riders [residual/partial disability, inflation protection/cola, and future purchase options] and the coverage of psychiatric illness/addiction.

I am looking for blind spots in my logic.  Is my logic reasonable?

[Slav4ikMD]

When you say that you might not need the bells and whistles, what alternative are you comparing this to?  An employer sponsored or AMA group policy or nothing at all? Do you have a family and are you anticipating having a significant cost of living that you will need to protect?

Think of a scenario of a horrific car accident - first of all you very likely may get a TBI, so you are toast then.  If your brain is fine, you may also not be able to work because of chronic pain.  Or you may be disfigured.  Or you may have so many medical appointments for months or years, that that may get on the way.  Or a recovery period of several months or more.  Or say you develop something bad like ALS or bad MS, that would impact your brain as well.  What if you have ca and say a 3 year life expectancy - I bet you would want to spend quality time with family instead of doing telepsych.

These are just some examples off the top of my head.

Having said that, I myself have put it off for years until very recently.  What made me finally do it is that with luckily higher earnings we also have a more complicated and expensive lifestyle that I could not envision supporting, even with family help, if something went south with my ability to work.

But if you have a simple lifestyle, a working spouse and abundant savings, then I can definitely see the other side of the argument as well.

[childay]

Slav4ikMD wrote:

But if you have a simple lifestyle, a working spouse and abundant savings, then I can definitely see the other side of the argument as well.

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Yes.  Is your spouse working?  Kids?

I have it as a psychiatrist.  Will probably drop sooner than later as net worth increases.

Have personally seen very young docs suddenly with metastatic CA including brain mets..

That said you have a point.  Essentially you need a brain and functioning vocal cord and an assistant.  I have not seen a quad psych but certainly seems possible.  One would wonder about likelihood of insco paying out vs other specialties..

[Antares]

When I bought disability early in my career - I too am a psychiatrist - my agent told me that psychiatrists were the only group that often didn’t buy own-specialty coverage, for the reasons you cite. If you can’t practice psychiatry, you won’t be practicing any other specialty either. I think this is reasonable. But if you are dependent on your income from working, you still need disability insurance. I realize you didn’t say anything to the contrary. Good luck!

[Medikit]

I'm an ID physician who works at a brain and spine injury hospital long enough to realize that I definitely needed disability insurance, even if it would take a lot to prevent me from working. I did look into a modified own-occupation plan which is cheaper and is suited for non-procedural specialties. I ultimately ended up going with an Ohio National plan own occupation plan with a COLA rider that was much cheaper than the companies that other salesmen were quoting me (even the modified own-occupation plans). I'm aggressively saving and pushed back the time period where the plan begins to 6 months to decrease costs as well. I used https://www.doctordisabilityshop.com/ but I'm sure there are other ways to get access to Ohio National. I'm not sure why the other salesman didn't bother to even get a quote from Ohio. I already had my term life insurance from Ohio but if you buy a new 1.5 million term policy you get a discount on disability insurance.

[Slav4ikMD]

Ok, so I hear you guys on the fact that a psychiatrist may not need an own specialty policy, but one still needs an own OCCUPATION one, correct?  Correct me if I am wrong, but there is not a policy from the big 5 that is own occupation but not own specialty and that is cheaper.  To me it seemed that they basically use the two words sort of interchangeably.  Yes, for a procedure based specialist this matters a lot, but this does not mean that a psychiatrist doesn't need a policy at all...

[Antares]

Slav4ikMD wrote:

Ok, so I hear you guys on the fact that a psychiatrist may not need an own specialty policy, but one still needs an own OCCUPATION one, correct?  Correct me if I am wrong, but there is not a policy from the big 5 that is own occupation but not own specialty and that is cheaper.  To me it seemed that they basically use the two words sort of interchangeably.  Yes, for a procedure based specialist this matters a lot, but this does not mean that a psychiatrist doesn’t need a policy at all…

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As I argued above. Yes.

[psych007]

I am the sole income provider, my wife is a stay at home mom, and I have 2 children.  To clarify, I wholeheartedly believe in purchasing disability insurance.  I am currently vetting out agents and different policies.  If I understand correctly, the consensus that I am getting is to buy the most comprehensive coverage but I could exclude the own-occupation specialty-specific coverage--which would save me plenty.

[Slav4ikMD]

psych007 wrote:

I am the sole income provider, my wife is a stay at home mom, and I have 2 children.  To clarify, I wholeheartedly believe in purchasing disability insurance.  I am currently vetting out agents and different policies.  If I understand correctly, the consensus that I am getting is to buy the most comprehensive coverage but I could exclude the own-occupation specialty-specific coverage–which would save me plenty.

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No you can't exclude an own occupation part to the policy.  You don't want to be in a position of being told that yes you can't work as a physician with your mild TBI, but CAN work at a McDonalds.  Again, I might be wrong on this, but I believe that the "big 5" companies offer comprehensive policies anyway, where scaling down on the specialty definition is a moot point.  In fact I just looked at the quotes I got for the big 5 and they all say "true own occupation" not own specialty.

Just make sure to shop through someone who can sell you a policy from any of those companies, not an agent who only works with one or two companies.

I used Larry Keller both for term life and disability and have been very pleased; the main thing I appreciated was the fact that he did not push me to get anything that I didn't need or want, and in fact didn't push me to get anything at all, just presented the facts, answered all questions, gave illustrations and didn't bother me till I felt ready.

The only "competitor" to one of these policies is a group AMA policy, but I felt it has many downsides.  I do have a group policy through my employer as well, and would also get State benefits if I became disabled, but I felt that was not sufficient.

[Antares]

I don’t think psych007 was suggesting omitting own-occupation coverage, only specialty-specific coverage.

[DK Unger]

All of the "Big 6" provide at least modified own occupation coverage meaning that you would receive 100% of your monthly benefit if you cannot practice your specialty and you choose not to work in another occupation. If you were able to and chose to work elsewhere, and have a residual benefit rider on your policy, you would receive a benefit based on your earnings in the new occupation. Depending on the policy in question, if your earnings in the new occupation are less than 20 or 25% of your pre-disability earnings, you would receive 100% of your monthly benefit. If you were able to earn more than 80 or 85% of your pre-disability earnings, no benefit would be payable. A proportionate benefit would be payable for loss of earnings between the two thresholds. The better policies guarantee a minimum benefit for the first 12 months of a residual disability. I would consider this the "Mercedes" of disability coverage and adequate coverage for the majority of disability claims. The "Bentley" of disability coverage would be the own occupation coverage which would pay 100% of the monthly benefit if you cannot practice your specialty regardless of your earnings in a new occupation. In other words, you could earn more than 100% of your pre-disability earnings in a new occupation and still receive 100% of your monthly benefit. Principal is unique in that you can modify the length of time your policy will cover you in your own occupation. This is called the "Your Occupation Period." However, the savings isn't compelling. For instance, a 35 year old male Psychiatrist in California with $10,000 per month of modified own occ coverage to age 65, 90 day elimination period, and residual benefits would pay a guaranteed level monthly premium of $338.10. If the "Your Occupation Period" is changed to 2 years meaning that after you have been disabled for 2 years, you have to not be engaged in any occupation you could reasonably be expected to perform based on age, education, experience, training, etc, the monthly premium reduces to $315.98.

The AMA group disability policy provides modified own occupation coverage but that isn't the main issue. The main issue with the AMA sponsored policy is that to satisfy the elimination period, the insured must not be working at all for 90 consecutive days in any occupation. Also, the AMA sponsored policy does not provide any benefits for residual disabilities until AFTER total disability benefits have been payable. This eliminates coverage for many illnesses which begin as residual disabilities. Furthermore, the premiums increase based on age and the policy can be modified or discontinued.

[happybee2]

Hi!

Would anybody be able to give me names of the best companies to buy long term disability insurance for a psychiatrist?

 

Thank you in advance!

[Phoenixdown99]

I'm a psych and I work for Kaiser, and I chose the "occupation specific" rather than the slightly more expensive "specialty specific" plan.

 

[Scott at MD Financial Services]

Depending on the state you live in it is Principal, Standard, Ameritas, Guardian, Mass Mutual, or Ohio National.  These are the only companies that offer the true own specialty definition of disability.  Now for my clients I have a tendency to visit about the value of having the true own specialty definition and the Own Occupation not engaged definition that is prevalent in the market place to then save about 15-20% on your premium.  Let me know if I can help further.