Disability Insurance

Disability insurance is essential for any medical student or resident. It protects your income-earning potential, which at this point is your greatest financial asset. It is also cheaper if you sign up when you are healthy, and you can purchase more insurance in the future with no further medical evidence.

Insurance companies qualify people as disabled in three main categories of disability insurance: any occupation, regular occupation and own occupation. It is generally recommended that family physicians obtain regular occupation disability insurance or the more expensive own occupation. Each type of insurance can have riders, including but not limited to future insurance options (FIO) and cost-of-living-adjustments (COLA).

There are generally three different sources for disability insurance as a resident: OMA insurance, PARO insurance and private insurance. PARO insurance is group insurance and mandatory for all residents. OMA insurance, which is sold by a salaried consultant from OMA insurance, is very cheap when you are young, but increases in price later on. OMA insurance can complement PARO insurance. Private insurance is more expensive now but the rate stays the same over time. It is sold by insurance brokers who are paid a commission based on the initial sale and ongoing payments. We recommend that you educate yourself in the basics before considering whether to buy private insurance, OMA insurance or both.

Life Insurance

There are three main types of life insurance: term, whole life and universal life. You should discuss your situation with a financial consultant or insurance expert. Remember to do your own homework and don’t let for-profit brokers take advantage of your lack of knowledge. PARO Life Insurance gives two times your income for life insurance. Many of you will need more just to cover your debt and funeral expenses, let alone if you have dependents.

References

CMA Practice Management Curriculum (PMC) module on Personal and Professional Insurance