The Disability Insurance Crossfire: Planners vs. Brokers and the Must-Knows for Docs with Michael Relvas, Ep #047

As a physician, your most valuable asset isn't your car, your home, or even your impressive degree—it's your ability to earn an income through a unique skillset you've spent years (and sometimes decades) developing. We're discussing disability and term life insurance with special guest Michael Relvas, an expert who has spent nearly twenty years advising physicians on these crucial protections. We tackle complex decisions—like whether to include a COLA rider in a disability policy, how to prioritize insurance on a tight resident budget, and the pros and cons of graded versus level premiums. We also discuss scenarios for dual-physician households, review strategies for term life coverage as your family grows, and answer rapid-fire listener questions on applying for disability claims and updating older insurance policies. Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients. You will want to hear this episode if you are interested in... [05:45] The cost of peace of mind[11:13] Pros and cons of COLA riders[16:31] Managing tight budgets in training[23:14] Evaluating perceived vs. real roadblocks[27:53] Choosing graded vs. level premiums[35:38] Dual high-earner disability insurance debate[47:30] Life insurance strategy insights[52:06] Clarifying occupational duties in claims[01:05:36] Questions from listeners on disability insurance Disability Insurance is the Foundation of Physician Financial Security Disability insurance isn't just another checkbox for your financial plan—it's a necessity. Disability insurance protects both your present lifestyle and the future earnings you've worked so hard for. Even young physicians, barely out of training, have invested major time and resources into their careers, making the stakes for an income-disrupting event extremely high. The Cost of Living Adjustment (COLA) rider is a feature that increases your monthly benefit during a disability claim to help keep up with inflation. Most young docs recognize its value, but some question whether the additional premium is worth it given the low statistical likelihood of long-term disability. It's essential to protect against catastrophic scenarios, and COLA is not the premium cost that will break your budget. Skipping COLA to save a few bucks is short-sighted when the risk, however unlikely, is devastating. Budgeting for Disability Insurance as a Resident or Fellow What if your budget feels impossibly tight? It's a common dilemma, especially for residents and fellows who are saddled with student loans and low stipends. We recommend getting coverage even if you have to reduce your benefit amount or opt for graded (lower initial) premiums that ramp up later. The key is to lock in coverage while you're still healthy and keep the door open for future increases without re-underwriting. Program-specific guaranteed standard issue (GSI) offers can offer flexibility without medical underwriting. However, these programs aren't guaranteed to last, and only you can determine when an apparent financial roadblock is truly immovable or just a matter of making difficult choices about your spending priorities. Graded vs. Level Premiums: Playing the Long Game As insurance carriers shift away from unisex pricing, especially for women, graded premiums are becoming more attractive for some. They allow physicians to pay much less in their early years by "grading" the cost up annually, but total costs level out over time. Switching from graded to level premiums later can raise your ongoing cost. Still, if graded premiums are the only way to afford coverage in training, it's a tool to use—just lock in level premiums as soon as your cash flow allows for long-term savings. Predictability and simplicity are best: level premiums are preferable if your financial plan assumes a long career horizon. Two-Physician Households: Should You Maximize Coverage for Both? Unless you're already financially independent, maximize coverage. Losing one income—even a high one—changes everything, from current expenditures to retirement and children's future opportunities. Term life insurance is important during your family-building years, especially when debt is high and kids are young. We recommend coverage that lasts at least until your youngest child is 18, but ideally extends through the end of college. Laddering term policies (stacking policies with varying durations and amounts) adds flexibility as your savings grow. As net worth builds, coverage can decrease, but most people keep policies active until family responsibilities are fully covered. Whether you're considering COLA riders, struggling to fit premiums into your budget, or wondering how much coverage to purchase, the advice remains consistent: Take action early, prioritize coverage in ...