Earlier this month, millions of Americans had to re-examine their finances to factor in an expense they haven’t had to think about for three years: student loans.
When the White House announced plans to resume student loan debt repayments, it came at a time when inflation and interest rates were also on the rise. Today the average federal loan debt is more than $37,000 per borrower, and half of borrowers still owe $20,000 each 20 years after entering school according to the Education Data Initiative.
High-income earners – like physicians and other medical specialists – aren’t immune to this new fiscal reality. In fact, as the Education Data Initiative found the following about medical school debt:
The average physician ultimately pays $135,000 – $440,000 for an educational loan plus interest
The average medical school graduate owes nearly $251,000 in total student loan debt
$2,275 is the minimum monthly payment the average medical school graduate must make in order to pay off all educational debts within 10 years
A $200,000 debt can double in 10 years at current interest rates, even with regular payments
Physicians across all specialties put themselves into harm’s way every day, making the financial stakes higher than ever for doctors with student loan debt. And with doctors being only one serious injury or illness away, they need to make sure they are able to keep up with payments if they become unable to work.
There are three important ways having a disability insurance policy can protect a doctor’s ability to stay on track with student loan repayments.
While most employer-sponsored disability insurance plans – also called “group plans" – will only pay out your full benefit if you are disabled and can’t work another job, a true own-occupation policy pays you your full benefit if you can work in a field outside of your specialty.
A true own-occupation policy provides the most comprehensive coverage, which gives you the financial security you need to continue repaying your loans.
Shopping for the right kind of disability insurance can be a hassle, so Pattern does the shopping for physicians and compares policies from five major insurance companies side-by-side. Request your free quotes today and compare policies with no obligation to buy.
First of all, what’s a rider? Riders are optional benefits that you can choose to add to your policy.
The first rider is a “benefit increase rider.” This rider allows you to increase your coverage, based on your increased income, without going through any medical underwriting. It essentially guarantees you the right to increase your coverage regardless of what happens to your health over time.
This means as your income increases, the coverage you get from your policy will also increase. It also means you will have a stronger financial safety net if you can’t work or have to change careers due to injury or illness.
Another rider that borrowers could find useful is called a “student loan rider.” This rider may be a good option for residents, fellows, or new physicians carrying student loan debt because it gives you additional coverage (and peace of mind) in addition to your base. When meeting with your agent, make sure to ask if a student loan rider is right for you.