If you’re a medical or dental school student or resident, now is the time to purchase your first disability insurance policy. You have already invested much time and money in your profession and it’s time to get serious about protecting your investment.
Even though you’re earning little or no income now, most of the leading disability insurance companies have special issue amounts for disability policies for medical or dental students and residents. That’s because they know you’ll be earning a high income in the near future. By getting you as a client now, they hope you will stay with them when you increase your policy later.
For 3rd and 4th year students the issue amount is typically around $2,500/month. For residents the amount is typically $5,000. For first year physicians and dentists, the issue amount is typically around $7,000.
You may not think you need a policy now, but many advisors believe this is the best time to apply for a policy. Here are my Top 3 reasons why medical and dental school students and residents should apply for a disability insurance policy sooner rather than later:
3. Lowest Premium Rate – Premium rates on disability policies are based on age. The younger you are when you apply for the policy, the lower your premium rate. By applying now as a young student or resident, you could get a good disability policy now and lock in a lower rate for as long as you keep the policy.
2. In Case You Become Disabled Now – What happens if you become disabled now? Even a policy for $2,500 or $5,000 would come in handy to pay your bills, especially if you have a lot of student debt.
1. Protect Future Income With Guaranteed Insurability Options – As mentioned above, 3rd and 4th year medical or dental students can get a $2,500 policy and residents can get a $5,000 policy. It’s also important that you include Guaranteed Insurability Options on your first policy. This rider allows you to increase your monthly benefit in the future, regardless of your health, as long as you qualify based on your income.
I’ve had many clients who purchased their first disability policies, then later developed health conditions that rendered them uninsurable. Fortunately, they included Guaranteed Insurability Options on their first policy, so they were able to use the options to increase their policies despite their health conditions. Otherwise, they would have been declined for additional coverage.
Now is the best time to apply for a disability insurance policy. You can lock in the lowest premium rate for your base policy and by including Guaranteed Insurability Options, you can protect your future income as well.