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Making the proper diagnosis: Medical residents and their disability insurance needs

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Making the proper diagnosis_ Medical residents and their disability insurance needs.png

Individuals who receive their medical degree should feel extremely proud; a lifetime of tireless academic efforts has paid off. Indeed, the transition from student to physician can now begin in earnest with the start of a residency.

With long hours and low pay, the life of a medical resident is not glamorous. However, most will still cherish the opportunity to learn, earn a steady income and enjoy job-related benefits.

These job-related benefits will likely include medical, dental and disability insurance, all of which fledging physicians will be understandably thrilled to have. Regarding disability insurance, insiders urge them to consider a second opinion.

Given doctors' good health, modest salary and large student loans, supplemental disability insurance might seem inconceivable to many residents. Most will argue that the hospital-provided disability insurance will cover nearly 60 percent of income, more than enough.

Consider a scenario in which a doctor-in-training is earning $60,000 per year. In the event of a disabling injury, this amount drops to $36,000 per year or $3,000 per month. When living expenses and student loans are added up, this likely won't be enough.

The good news is individual disability policies paying out at higher rates are affordable and portable. Furthermore, most are designed to account for the inevitable -- and sizeable -- salary increase of physicians-in-training.

If residents have any lingering doubts, they needn't look further than the very doctors training them. An AMA (American Medical Association) Insurance survey made the following discoveries in a physician survey:

  • 60 percent knew a colleague who suffered a disabling injury
  • 77 percent called supplemental disability insurance "essential"
  • 75 percent have such a supplemental disability policy in place

Source: The American Medical Association, "Residents: Your disability insurance coverage may fall short," Robert Nagler Miller, April 4, 2017

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