These are tips that you can consider at time of application or anytime - even if you had had a plan in place for years.
1) Buying at the youngest age and while in a residency or fellowship program is always going to link you to the most in discounts. If you are still shopping for coverage, consider looking at plan options before you leave your current program, especially if you plan to move. Then focus on #2 below.
2) Be mindful of the fact that securing your plan in a state with lower cost, could prove to be very beneficial. So, if shopping now, look at quotes for the current state as well as your new state as the new state may charge more at application (or at time of increase depending on your increase option). Another tip here is to ask an independent broker about the costs for your increase option once you buy it, as some carriers use the initial state as the state for pricing on your Future Purchase Options, and this may be good or bad depending on where you are vs. where you end up after training ends. As this tends to get confusing, make sure you are working with a broker who has access to all carriers to make sure you are getting a fair understanding of all of these moving parts.
3) Paying Annually can help you to cut down on costs. If this makes sense for you to consider paying up front, please note an important tip. With annual payments, this doesn't mean your payments go on automatic payment mode with all carriers. Some carriers allow for this but know that the savings may require you to pay more attention vs. being on autopilot. Most automatic payments require you to call in a payment, pay online or mail a check. See which mode benefits you the most and decide from there. Pro tip to ask about: Paying a double annual premium with some carriers allows for an additional 10% discount.
4) Extending your Waiting Periods (also called an Elimination Period) to a longer wait time such as 180-day or 365-day waiting periods can cut down on costs. Many MDs and DOs in training keep a 90-day wait on their contract and upon increasing their benefits to match up to their Attending salaries, opt for the longer wait as they can justify the wait for the savings now at this point.
Is this a good idea for You? Examples of those that may be ready for this would be, if the insured has have had time to pay down debts, has already built a 3-6 month cash cushion of savings, as well as having a working spouse also contributing to household income and savings. Additionally having the Presumptive Rider inside the contract allows for benefits to be paid immediately in certain circumstances. So, there is a potential back-up for benefits to be paid immediately which could be the reason to go ahead and extend and just save money now and extend. Please note that going to a longer waiting period and trying to do the reverse isn't recommended. A plan becomes more expensive as you age. If you try to get that shorter waiting period back, there would be a higher cost for that shorter window, at an older age. Always, transfer risk under the shorter wait; knowing you can extend it out later on.
5) Removing your COLA rider can always save you money, especially if you are now out of training and buying more coverage. COLA costs are locked in on your original set of coverage but when you buy more, that cost typically goes up to then allow for growth on the total increased benefit. Determining whether or not COLA is an important rider to keep on the contract, is always subject to your personal point of view given variables that are specific to your specialty and household. We don't always recommend the rider due the price tag it holds, as it depends on the needs of our clients and sometimes the age (more expensive if you are older) of the client too. If unsure about going without it, please check out our video here.
Good Rule of Thumb: If it makes you too nervous to go without an inflation rider, add it on as you can always remove it later. Let's transfer risk and feel good about it, vs. stressed out about leaving yourself exposed.
6) Removing your Future Increase Option off your contract. There will be the point in time that you have saved money, paid off debts and have determined how much disability insurance is good for you and/or your family. Once you have reached this point, talk with your advisor about removing this rider off the contract. If you leave an FIO rider on the contract and never buy it all, that cost remains. So, in summary, if you have a Guardian Provider Plus (their old product), Guardian Premier, Ameritas or MassMutual contract, you can see if there is a savings to removing your purchase rider away. If unsure how a Future Purchase Option works, you can check out this quick informative video here as well as our client resource guide here.
Hopefully this gives you some ideas to use now or in the future, to allow for you to save on your insurance plans. Please reach out if you have any questions for us.