Disability policy cost for women versus men

Q: Several male colleagues are paying much less for their disability insurance than I am. We all are earning the same income, are about the same age, and are in the same specialty. Is this normally the case for female physicians like me?

A: Yes, it is the case. Although, actuarially, women are better risks for life insurance compared with men, it is the opposite for disability insurance. Although women live longer, they don't necessarily live more healthfully, mainly due to complications of pregnancy and stress.

For example, Dr. Jones, a 35-year-old female dermatologist in New York, purchased her policy from a well-known insurance company. Assuming a monthly benefit of $5,000, a 90-day waiting period, benefits payable to age 65, a residual disability rider. and a 6 percent cost of living adjustment rider, her fixed annual premium would be $3,743. That same policy, with a unisex rate and "multi-life" discount, would cost $2,120, however, an annual savings of $1,623, or approximately 43 percent off the normal rates for women.

Many hospitals and medical associations have existing programs that you can access without having to take the time and effort to establish something on your own. Be sure to ask the insurance agent or financial planner with whom you are dealing about the availability of such programs, or look for an agent or planner who specializes in working with physicians, because he or she most likely would have access to several of them.

Send your money management questions to memoney@advanstar.com
. Answers to our readers’ questions were provided by Lawrence B. Keller, CFP, CLU, ChFC, of Physician Financial Services in Woodbury, New York.