In 2016, there were nearly 120,000 medical residents throughout the United States. The greatest single burden that a heavy majority of this group carries is the $188,000 average debt from student loans to pay for medical school. What often drives the need to protect income immediately for a graduating resident or fellow is the need to fund the ongoing loan payments that typically are not forgiven in the event of disability. While most loans are forgiven upon death, a disabled young physician could be in financial turmoil by having to pay the loan as well as all other living and/or medical expenses.
As the leading national agency for disability income protection for residents and physicians, In 2016, InsureSTAT partnered with International Specialty Insurance, LLC, a USA based Lloyd’s of London Coverholder, to design a custom disability insurance product to alleviate the student loan payment risk that so many face.
Medical Student Loan Disability Insurance can offer up to $200,000 paid in lump sum amounts directly to the insured in the event of a disabling injury or illness in 4 equal installments during a 24-month period, every 6 months if continually disabled. Policies have level fixed premiums for 5 years and are mutually renewed at that time should the insured decide to continue to the policy. Own Occupation and Residual riders are also part of the contract definitions so as to protect the physician in a similar manner to the traditional disability insurance policy they are securing or have already purchased. Additionally, if an individual disability insurance policy has been secured via any major insurance carrier in the previous 12 months, OR, is in the process if securing a policy from InsureSTAT now, THERE ARE NO MEDICAL QUESTIONS OR EXAMS REQUIRED. Here’s how this works…
A medical resident secures an individual disability insurance policy from InsureSTAT to pay $5000/month if disabled to age 65. This income is necessary to pay rent, mortgage, cars, food, spouse/family costs and WOULD ordinarily be needed to pay a bank for the student loan. Most loans are built for re-payment over a 10-year period, so, this is a long time to have a considerable amount of the income benefit used to pay the loan. With a Medical Student Loan Disability Insurance Policy, the insured maintains the full $5000/month from the traditional disability policy but gets $50,000 every 6 months for 24 months to pay off the entire loan in a far shorter period than the typical 10-year structure. Also of importance is the general flexibility that the lump sum payments provide. The insured simply get the check and is free to use the funds in any manner he/she deems necessary. The insured always controls the cash and can use it for other expenses if they wish to do…A Win/Win in the event of disability.