When can senior resident increase disability insurance and by how much?

[JK]

Current senior resident who will be graduating in June. I currently have a disability policy that would pay out ~6k/month that I obtained as a resident. I recently signed an attending contract with a guaranteed starting salary of 300k (plus any bonuses on top). Questions:

1) At what point CAN I increase the amount of disability? As soon as the contract is signed, when I formerly graduate (June 30), when I start the job, when I collect the first paycheck, etc...

2) Just because I can increase the policy (based upon #1), SHOULD I increase and by how much? My thoughts...

6k/mo = 72k/year which isn't bad but I would definitely need more. I know WCI has had calculations based upon what you are trying to replace (retirement spending, monthly expenses, etc...) but there are so many variables when first starting as a new attending that my crystal ball for the future is cloudy. For instance, we will likely have another child, my income will likely increase, we may move, we don't currently own a house, etc... My concern is that if I only get enough to cover things based upon the current situation and then get disabled, I may not have enough for some future items (which again are difficult to predict). As a result, I was thinking of increasing policy to 12-15k/initially (or as much as they will allow on 300k income) and then further increases later on would be based upon my future spending, up to the max that any one company would allow (and then I'd stack policies).

[Scott at MD Financial Services]

JK,

Question 1 of when Can you increase that policy?  Well that is based on your disability policy, some let you increase whenever your income increases, group benefits get lost, or every 3 years.  Other contracts allow you to increase every year on the policy anniversary and still some allow you to increase anytime you want, it really depends on the policy you have and the provisions within it.

Question 2, nobody can tell you if you should increase it.  The question is do you need more coverage or do you want more coverage?  You have been a resident so hopefully you continue to live like a resident and not have high bills when you start having the attending salary.  My theory is buy what you need (current life expenses + savings to complete your retirement funding in case you become disabled early), get options for what you might want so that if you have lifestyle creep (increase) that you will then have the right to buy more coverage down the road.

Now if you want to purchase $12-15k as you indicated, you always can then as life goes along and the need for the disability goes away you can always reduce the benefit to gain some rate relief.

Let me know if I can help further.