Doctors often underestimate how much disability insurance they need. The video breaks down coverage amounts for residents and attendings, and whether you can count on a spouse's income to fill the gap.
As a resident, you typically cannot afford to buy as much disability insurance as you need, but you should be able to as a brand new attendant. Basically, you need to buy enough to cover both your living expenses and your retirement savings if you were to work to age 65, but not your taxes. Disability insurance payouts are generally tax free since they're usually paid for with post tax dollars. It is important to note that how much you need has little to do with your income and everything to do with what you spend. The less you spend, the less insurance you need to buy. Insurance agents would love to sell you the largest possible policy, which usually works out to be about 2/3 of your gross income. But it is possible to combine policies from two companies to get even more, so ultimately you need to decide how much you require on your own. Resident physicians typically buy a $5,000 per month benefit, and attending physicians typically buy a benefit in the 10 to 15, maybe $20,000 per month range. But there are plenty of doctors who buy both more and less. As a final thought, if your plan in the event of disability is to rely on the income of your spouse, you may not need to buy disability insurance at all. Or alternatively, you may each opt to buy a policy just a smaller amount than you otherwise would.
The hosts of the White Coat Investor are not licensed accountants, attorneys or financial advisors. This podcast is for your entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.
Physician Takes a Youth Sports Team to the State Championship - MtoM Podcast #236
