As COVID 19 continues to spread throughout the country and leave lasting impacts on our economy, many of us are trying our best to cope with the changes. While this can take a huge toll on our mental health and leave us unsure of our next move, there’s one thing we need to do in the midst of the chaos: BUY LONG-TERM DISABILITY INSURANCE. Here are 6 things you need to know about disability insurance during this COVID 19 crisis:
Disability insurance helps to protect your income. The purpose of long-term disability insurance is to protect your income in case you become disabled or unable to work due to a physical or mental illness. This means if you get sick (i.e. with coronavirus, depression from the virus, or some other ailment) and are unable to work at your full capacity or generate your normal revenue, disability insurance will kick-in and help supplement your income until you recover and get back on your feet.
2. Many doctors are rushing to get it. As healthcare workers, we take care of patients who may have the virus and have come into contact with many others who have been exposed. With the nationwide shortage of personal protective equipment, we may be even more vulnerable to contracting the virus, or being an asymptomatic carrier of the virus than we realize. Due to our increased risk of exposure, many doctors, especially those who work in the Emergency Department or the Intensive Care Unit (ICU) have been rushing to get disability insurance. They want to make sure that their income is protected in the unfortunate possibility that they contract the virus or acquire a mental health disorder from treating others with the virus that could impact their income.
3. Pricing hasn’t changed & there are discounts available. Despite the risk of Coronavirus infection, the price of disability insurance hasn’t increased. In fact, many insurance companies are still offering a 10-20% discount to newer doctors who are still in residency training programs or fellowships. Plus, female attending physicians and a few resident physicians can still get unisex policies that will prevent them from paying more for disability insurance than their male counterparts. Although these unique features may only be available in certain areas from a select group of carriers, they can save so much money that they are worth seeking out. Remember, the cost of disability insurance varies by state as companies have realized that your risk of becoming disabled is increased or decreased if you live in certain areas. A policy in Georgia is much cheaper than a policy in California.
4. Companies are still accepting new applications. I called my insurance agent, Pradeep Audho from PKA Insurance Group, to follow up on some paperwork for my own on disability insurance policy. During our conversation, he mentioned something I found surprising: although more doctors were trying to secure disability insurance, the application process had not changed. There was no hold on claims or freeze on new applications even with Coronavirus spreading. The process itself is similar, if not easier than before. To get started, you just reach out to an insurance agent who can help you determine your desired policy amount and any added protections (or riders) you may need, such as extra payments to cover student loans, partial disability coverage, and a cost-of-living adjuster, etc.
5. The process of approval is easier than before. Despite the chaos, it’s easier to get approved now than it used to be. Once you figure out the payout and features of your desired policy, the insurance company will then assess your risk of getting disabled so they can determine the specific price to charge you for the policy. One way they assess your risk is by inquiring about your medical history. Many companies used to require a detailed medical exam for any policy with a payout greater than $6000 a month. Nowadays, things are much easier. Most people can skip the detailed medical exam and get approved by filling out an online or telephone medical questionnaire for any policy that pays you up to $120,000 a year. While the process could change in the future, as of 3/30/2020 the process is the same as before, if not easier.
6. You can still get coverage, so get it now! The Coronavirus pandemic has been a sobering reminder that our health is not guaranteed. Although we may feel fine today, all workers need some form of long-term disability insurance to supplement their income in case they fall ill for an extended period of time and aren’t able to work at the capacity they used to. Companies are still accepting applications, many agents are offering discounts, and the process is easier than before.. If you’re unsure of where to look you can start with PKA Insurance Group or browse the list of trusted agents on the White Coat Investor page. You can also view prior articles on Disability Insurance and skim the 9 things I learned when I bought my own policy. Although we have lot on our plate, take a few minutes to apply for it now.
***Bonus: You may want to consider term-life insurance as well. As a single person with no children or family members who rely on my income, I don’t yet have an individual term-life insurance policy. However, I recognize that I’m in the minority. Many doctors have children and spouses who’s yearly expenses and savings goals are largely dependent on their doctor income. If this is the case for you, consider term-life insurance as well. Just like disability insurance, you can seek help from an insurance agent who will give you some price quotes. Plus, many policies with a payout under $5 million no longer require a detailed medical exam. The only change in the life insurance process is that insurance companies are taking a little longer before they confirm your policy. As of March 30, 2020, insurance companies may be hesitant to approve your policy if you have traveled internationally within the last 60 days and may require a 30-day waiting period if you have recently been exposed to the virus. Although there are a few more hold ups with term-life insurance than there are with long-term disability insurance, they are both worth looking into. In the midst of this crisis, be sure you’re protecting yourself, and your [future] income.