If you’re a resident physician exploring disability insurance options, you might be worried about being “over-sold” on coverage you don’t need. But here’s the surprising truth: it’s often more dangerous to be under-sold a “less expensive” policy.
Many agents may offer seemingly affordable policies by skipping crucial riders or offering lower-tier coverage options, hoping price alone will grab your attention. While affordability matters, a “budget” disability policy with inadequate protection could jeopardize your long-term security and your financial future as an attending.
Let’s break down why this happens, what to watch out for, and how to make sure you’re getting the right coverage for the career you’ve worked so hard to build.
Why More Affordable Disability Policies Are Presented
Disability insurance is a complex product (we simplify it here with our comprehensive guide to disability insurance), and residents often shop on price because they’re usually on a trainee’s salary. Knowing this, some agents will focus on offering lower the monthly cost (i.e. monthly premiums) rather than comprehensive coverage, assuming that the monthly cost is all residents care about.
By leaving off key riders or offering downgraded features, agents can present a policy that looks affordable but doesn’t provide sufficient protection.
However, in disability insurance, you get what you pay for. When you’re a physician working toward a high-earning specialty, “affordable” policies may actually undercut the coverage you need to protect your future income fully.
Key Disability Insurance Riders You Shouldn’t Skip
Here are the riders that many agents might leave off or downgrade to make a policy appear cheaper—but skipping these could cost you more in the long run:
- True Own-Occupation Rider: This rider ensures that if you can no longer work in your specific specialty, you’ll still receive disability benefits even if you can work in a different field: you can “double dip.” For instance, if an injury prevents a surgeon from performing surgery but allows them to teach, true own-occupation coverage would still pay benefits for an inability to operate while still allowing them to make additional income in education.
- An Increase Option: An increase option on your disability policy allows you to increase your coverage as your income grows, without the need to undergo medical history questions and exams again in the future. This is essential for trainees, as your current income is significantly lower than it will be as an attending. With an increase option, you can increase your coverage to match your future income when you become an attending physician, even if your health changes. An increase option comes in two forms: one with “Future” in it and the other with “Benefit.” These are slightly different, so reach out with questions (email michael@moneymeetsmedicine.com) about which option is better for you.
- Cost of Living Adjustment (COLA): A COLA rider increases your disability benefits annually to keep up with inflation. Without it, the purchasing power of your benefits could decline over time. Since most disabilities last several years, COLA is key to ensuring your benefits remain sufficient for years down the line.
- Residual Disability Rider: Not all disabilities are “total”—you may still be able to work but with limitations that impact your income. A residual disability rider compensates you for partial losses in income due to a disability, which can be especially helpful in covering lost revenue if you’re recovering or working at a reduced capacity.
- Non-cancellable & Guaranteed Renewable: Make sure carriers cannot alter, modify, or change any part of your policy.
Do Adding Disability Insurance Riders Make My Policy More Expensive?
Not significantly! Disability insurance premiums are regulated by state laws, meaning there’s a cap on the rates agencies can charge for specific levels of coverage. Adding riders typically won’t drive up the premium to an unaffordable level—especially compared to the potential benefits they provide.
A few extra dollars each month could be the difference between full financial protection and a policy that doesn’t support you when you need it.
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Instead of settling for the bare minimum, take a close look at what each rider adds to your monthly premium. You might be surprised at how affordable comprehensive coverage can be.
What to Ask When Looking for a Disability Insurance Policy
When you’re reviewing disability insurance options, ask your agent these questions to ensure you’re getting full protection:
- Does this policy come from one of the Big-Five Companies that provide true own-occupation coverage? Without this, you may not receive benefits if you’re able to work in a different field, even if you’re unable to work in your specialty.
- What riders are included or available for this policy? Ask specifically about the increase option, COLA, residual disability riders, and if your policy is both non-cancelable and guaranteed renewable.
- How will my coverage adjust if my income grows? Your policy should have flexibility to match your future earning potential as an attending.
The Risks of Being Under-Insured
An inadequate disability policy might be “affordable” now, but it could end up costing you more in the long run. Imagine losing the ability to practice in your specialty without a true own-occupation rider—your benefits may not kick in if you’re still able to work in another role. Or, if you develop a health condition that limits your work temporarily, a lack of residual disability coverage could leave you without support during recovery.
Being under-insured can also have ripple effects on your financial future. Many residents take out loans, have family responsibilities, and plan for a lifestyle that matches an attending physician’s salary.
Without sufficient coverage, you could be left struggling to meet these obligations if a disability ever prevents you from working at full capacity.
Your Specialty Deserves Complete Protection
Disability insurance is more than just a product—it’s an investment in the future you’ve worked so hard to build. You’ve committed years of study, training, and personal sacrifice to become a physician, and that investment deserves to be protected. Comprehensive coverage means having peace of mind that, no matter what happens, you’ll have the financial support to continue the life and career you envisioned.
In short, don’t be afraid of being oversold on disability insurance. Instead, make sure you’re not being under-sold on the coverage that will truly protect you. By including essential riders and understanding what each one adds to your policy, you can choose disability insurance that aligns with your future earning potential and career goals.
If you’re ready to explore policies that truly safeguard your specialty – or you’d like us to do a policy review, reach out via email at michael@moneymeetsmedicine.com. We’re here to help you find coverage that’s as complete as the care you provide to your patients.
Contact us today to schedule a no-obligation quote, policy review, or consultation. Your career deserves the best protection—let us help you make that happen.
