Five Reasons Why Resident and First-year Dentists Should Purchase Disability Insurance As Soon As Possible
by Jack Le, CLU
There are five main reasons why resident and first year dentists should purchase individual disability insurance as soon as possible.
First Reason. Proof of income is not needed for resident and first-year dentists. Resident dentists can purchase up to $3,500 per month of disability benefits without any proof of income. Upon application you will be required to go through the medical review but will not have to submit pay stubs, w2's, or tax returns.
Dental residents in dental specialty schools can purchase up to $4,000 per month of disability benefits without proof of income.
First-year dental specialists such as endodontists, pediatric dentists, periodontists and prosthodontists can purchase up to $7,500 per month of disability benefits without any proof of income. You will still need to go through the medical review.
Not needing to gather up your financial documents just makes the underwriting process simpler and faster. You will not need to spend your time gathering, scanning and emailing in your income documents. Disability insurance underwriters will not be going back to you asking annoying clarifying questions about your income.
Disability insurance underwriters simply understand that there are a lot of income potential for resident and first-year dentists. Therefore, a substantial amount of disability insurance is available to be applied for without proof of income.
Second Reason. You will most likely never be as healthy as you are now. You need to be healthy to get approved. The general trend associated with the aging process is deteriorating health. Upon submitting an application, you will go through a medical screening process. This typically includes a medical phone interview, a para medical exam, and a collection of your blood and urine sample. If you are healthy in the eyes of disability insurance underwriters then your application will be approved.
If you are overall healthy but have a pre-existing medical condition, an approval of your disability insurance application can only be made if your pre-existing condition is excluded out of policy coverage. For example, if you already have an eye condition where symptoms were/are present, treatment has been prescribed by a medical professional, any disability insurance approved will have an added exclusion for your eyes/vision.
Some pre-existing conditions are not of a concern to underwriters and you can be approved without added exclusion.
Some pre-existing conditions can prevent you from getting approved for disability insurance entirely. For example, if you had a heart attack, a stroke, became obese, or became a diabetic, it will be very likely that any application submitted will conclude in a decline. It is advantageous for you to secure some individual disability insurance while you are healthy and before you are diagnosed with a serious medical condition that can affect your ability to work in your own occupation.
If you don't think your pre-existing condition will be covered or if you pre-existing condition will prevent you from getting approved, there is really only one way to find out, submit an application. There is only one of three possible outcomes…
- you will be approved without any policy modifications,
- you will be approved with policy modifications. Policy modifications may be but not limited to added exclusions from policy coverage, increase in cost, decrease in benefit periods, and omission of certain optional riders that you applied for. Or,
- you can be declined. This means that not at any cost or with any policy modifications can a company insure you for disability, your risk is simply too high.
There is no cost to you to submit an application and you are never committed to accept any offer made.
If you are in good health now, you need to apply before your health takes a turn for the worse. Don’t wait until a health problem comes up and apply for disability insurance. This is what a reactive person would do and bear the bad news. Be proactive. All of our health will take a turn for the worse at some point. Sometimes our heath deteriorates while we are in our working years and still very much dependent on our income to maintain our current living situation and build our retirement savings.
Third Reason. Individual disability insurance will never be as affordable as it is now. Resident and first-year dentists are typically young and healthy. As your age goes up, so too does the cost for disability insurance. Once you purchase individual disability insurance, you can lock in the price from now all the way until your retirement years. Just make sure your disability insurance policy has both the Non-Cancellable and Guaranteed Renewable provisions. These two policy provisions together prevents the insurance company from making changes to your policy and prevents price increases as long as you pay for your policy on time.
The cost for individual disability insurance will also become more expensive if your health deteriorates. Sometimes, in order to be able to make an approval on an applicant that has concerning health conditions, an increase in cost for insurance must be made in order to counter the higher risk of disability due to health status.
Disability insurance is affordable. This is true more so for when you are young and healthy. You can purchase disability insurance for a small, known and predictable monthly cost in exchange for the unknown, unpredictable and unmeasurable cost consequence of a long-term disability. This is not a hard decision. Disability insurance is the most important risk divergent tool in any financial plan. You will be at a much lower risk position if you are optimally insured for disability insurance.
Since beginning in the disability insurance business in 2005, I routinely get calls from dentists all around the country looking to purchase a disability insurance policy for themselves or for their business. Most of the time I can get them approved without any issues. But for some who are older or have certain medial conditions, they have to give up some optional policy riders in order to afford their policy. Unfortunately, for some applicants, they have waited too long and cannot be approved for disability insurance at any price. I wish that I had met them much earlier in their career.
Fourth Reason. You can purchase a disability insurance policy that provides you a monthly benefit if due solely to injury or sickness, you cannot perform the material and substantial duties of your own occupation as a dentist. The own-occupation clause is very important. As a dentist, you are a highly trained and specialized professional. You have spent a lot of money for your undergrad degree and dental school and have spent a lot of time in your training to become a dentist. You need a policy that insures your ability to work as a dentist.
If you cannot earn and income as a dentist due to injury or sickness, it would be very hard for you to replace your income by working in some other capacity without another heavy round of time and money invested into the necessary training to be able work in another occupation. You need a disability insurance policy that will help you not only recover your financial investment to become dentist but also to continue an income stream until your retirement years so that you can maintain your way of life in the event of a long-term disability.
Fifth Reason. You can secure the ability to purchase additional disability insurance later given an increase in your income without another medical evaluation. At some point or points later in your career, you will need to purchase additional disability insurance to keep up with your growing income.
Additional disability insurance is available with our without another medical evaluation. You want the option to purchase additional disability insurance without another medical evaluation. You only want to go through the medical evaluation once.
To do so, you need to apply for disability insurance now with either the Future Increase Option (FIO) or Benefit Purchase Rider (BPR). Either the FIO or BPR will secure your future insurability regardless of any ill health changes. All you have to do to get more disability insurance later is to submit an application along with your financial statements. A medical exam, a blood and urine sample, medical records, medical questions and any other medical related information about you will not be required.
To get a disability insurance policy in place, fist request a quote emailed to you. Then work with your disability insurance specialists to tailor your policy to best fit your situation. Then submit an application. Again, there is no cost to you to apply and you are never committed.
Individual disability insurance policy Forms 18ID, 18UD, and 18GI underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and availability may vary by state. In New York: These policies provide disability insurance only. They do not provide basic hospital, basic medical or major medical insurance as defined by the New York State Insurance Department. For policy form 18ID, the expected benefit ratio is 50%. For policy forms 18UD, 18GI, 18UD-F, an 18GIF,the expected benefit ratio is 60%. The expected benefit ratio is the portion of future premiums that the company expects to return as benefits, when averaged over all people with these policy forms.Optional riders are available for an additional premium.
If you choose to have an optional rider on your policy your premium will increase.
2018-55412 Exp 02/20