Group + Individual Disability Insurance Conflict??

[TravisRADMD]

I've had strong own-occupation disability coverage with Guardian since residency that covers me up to 15k/month claim. I bumped up the coverage with Guardian in July when I started my attending job. I'm 6 months into my job and I just realized that the group coverage causes a conflict with my individual where Guardian will only pay out the difference.

That being said the group coverage covers up to 12k a month but I assume will pay out substantially less due to weaker contract terms, taxes, etc. This means Guardian will likely still be responsible for most of any potential claim. It seems I'm now overinsured and I can't help but feel a certain way about the fact that I'm paying Guardian the same amount despite a possible lower contribution from them.

I was told by the agent I originally used that I'm better off not trying to update my coverage with Guardian to lower terms because 1)group claim payouts will be substantially less than 12k/month so the difference in pay out should/could be negligible, 2) I'd loose my residency discount if I ever wanted to increased my Guardian coverage again in the future, 3) I'll be older so the same coverage could also cost me more if I ever bumped it up again.

I was ultimately guided to try to opt out of the group insurance if I can and keep my current individual coverage the way it is either way.

Does this seem right? Is being overinsured right now worth the potential savings in the future(residency discount lost, older age as above)? Does anyone have an argument for keeping both, one or the other?

Thank you!

[G]

I would keep the individual, for sure.

That group policy is pretty fat! If your individual policy will be adequate, I would drop the group if allowed.

Or you could just ride it for a few years and build up your NW and then drop the group.

Or just keep the group til you drop to part time, at which point they will probably terminate you.

Or just keep the group as long as you are with the group, and chalk up the expense to being part of civilization/team player.

[TravisRADMD]

i would keep the individual, for sure.

1- that group policy is pretty fat! If your individual policy will be adequate, i would drop the group if allowed. - this is my first choice that i'm currently working on. Yes, i think my individual coverage is adequate enough. It's 15k/month which is max i could get either way from both combined(i.e if group pays out 10k then i will only get 5k from my individual)

2- or you could just ride it for a few years and build up your nw and then drop the group. - nw ?? Can you explain this please?

3- or just keep the group til you drop to part time, at which point they will probably terminate you. -

4- or just keep the group as long as you are with the group, and chalk up the expense to being part of civilization/team player. - might be my best second option i think.

just to clarify what would you do if i can't opt out of the group plan? What things should i consider when deciding all the options you listed?

On top of keeping my residency discount my agent brought up the variable of my income increasing and the ability to increase my coverage if i keep my current plan as is as another reason to not change much regardless of what I can do with the group plan.

That being said my w2 income goes up about 25k a year for the next 3 years but will likely stop growing substantially after that unless i switch to partnership track which i currently don't have plans to do for certain reasons. I think 15k untaxed is enough for me to hang my hat on god-forbid especially with my wife making a decent salary as a retail pharmacist.

please advise. Much appreciated. Thank you g !!!

[G]

NW = net worth. So when you are FI, you don't need disability insurance because you could just stop working, right? That said, I do keep a small, individual policy (which has some hateful activity exclusions) to pay for a private personal aide.

When I was a young attending, I also paid to have that rider to increase coverage, but I never used it because of that NW increasing phenomenon.

Some agents look too much at your income as opposed to your need. (They must not work with WCIers.) Who cares if your income goes up 75k? What matters is how much you need to cover expenses/spending. Not to be a pessimist, but probably better to run the numbers with and without your wife's salary (and vice versa).