Protect your work 🛡️

Taylor Swift might be out there conquering the music world, but even she knows the value of protecting herself—whether it’s from heartbreak or shady contracts. Just like Taylor re-records her albums to take back control, you need to take control of your financial future with the right disability insurance. Life has its plot twists, and as a medical student, you can’t afford to let one derail your career. This is your chance to stay ahead of the game, protect your income, and make sure you’re covered for whatever life throws your way—because your future deserves the same level of care as a chart-topping hit.

In today’s email:

• Protection is KEY 🛡️ What is disability insurance?

• Decisions, Decisions 🤔 RBC vs Doctors of BC.

• Give me the evidence ⚖️ A case study to help us all.

👇 COMING SOON: Master your money with our Ultimate Guide to Canadian medical student finances—your one-stop resource for budgeting, insurance and investing tips tailored to future physicians.

THE BIG IDEA

Protection is KEY 🛡️ 

How Much Disability Insurance Do You Need?

When it comes to disability insurance, more is better (when you’re a practicing physician). The reasons for that a relatively straight forward.

1️⃣ Insurance Coverage Limits: Policies typically cover up to 70% of your income, with a $25,000 monthly cap per policy. By combining two policies (e.g., personal and business overhead), you can extend coverage to $30,000.

2️⃣ Think Long-Term: Maximum coverage not only protects you early in your career but also supports retirement and child education planning if disability strikes. You’ve worked hard to become a physician, the last thing you want is that financial stability to be taken away from you in the form a disability.

3️⃣ Higher Pressure to Return: As a high income earner, we will face lower percentage payouts relative to our annual income. Overhead tied to our clinics will become an ongoing cost that puts pressure to return to work sooner than later.

💡 Tip: Adding business overhead insurance can provide even more stability during this difficult time and prevent the stress highlighted in the last point.

Medical Students: Why Start Early?

I’ve always wondered why it’s important for me (a medical student with zero income and only debt) to hold disability insurance. It was explained to me once as protecting the time and effort I’ve dedicated to becoming a doctor. This helped me understand the future value of having my MD and wanting to protect it. Beyond this, are a few important factors which pushed me to sign up in my 4th year.

1️⃣ Easier Approval When Young: Disability insurance is one of the hardest types to qualify for because insurers assess your entire health history. The younger and healthier you are, the simpler the process.

2️⃣ Student & Resident Discounts: Medical students and residents get a 15% career-long discount and one year free during PGY1. It felt like a no brainer to sign up and have a 15% discount that sticks with me until I no longer want disability insurance.

3️⃣ Minimal Underwriting Hassle: Early applications often require just five questions, bypassing the full 30-page application and health screenings needed later. This may be the most significant reason to sign up before completing medical training.

4️⃣ Future Income Rider: Start small and scale your coverage as your income increases— no need to prove health again. With many disability policies at certain milestone in life you can increase your coverage by an incremental amount. Ask your advisor about this to get the exact details for their company policy.

Key Policy Features to Consider

Insurance advisors will throw out various “riders” that you can add to your disability policy. Think of these as “add-ons” that can make your coverage better but they all come with additional monetary costs. I’ll highlight the most important below that I think are important to understand when you first sign up.

1️⃣ Own Occupation vs. Any Occupation

• Own Occupation Coverage:

  • Protects your ability to work in your specific role.

  • Example: A surgeon who develops a tremor can switch careers (e.g., real estate) and still receive disability benefits.

  • Important: This coverage doesn’t apply if new job duties overlap with your physician role.

• Robust "Any Occupation" Contracts:

  • Covers income loss if a new role earns less than your physician salary, ensuring you’re “topped up” to your previous income.

💡 Tip: If you’re unsure of your future career path, start with own occupation—it’s easier to remove than add later.

2️⃣ Residual and Partial Disability

Both Residual and Partial Disability are embedded in RBC contracts (no rider needed):

• Residual Disability:

  • Covers income loss even if you’re partially working.

  • Example: If you’re seeing 2 patients/day instead of 10, and your income drops 80%, the policy compensates based on income loss.

  • Caution: Some policies require both time AND income loss for coverage.

• Partial Disability:

  • Covers reduced work time.

  • Example: Working 2 days/week instead of 5 triggers 50% of the policy payout, regardless of additional income.

💡Tip: Save Money with Annual Payments: Paying premiums annually saves ~5% compared to monthly payments, as insurers avoid processing fees.

Decisions, Decisions 🤔 

Choosing disability insurance as a medical student in BC often comes down to Doctors of BC (DoBC) versus RBC Insurance. While the upfront costs can be tempting, it's essential to evaluate these options with a 30-year career perspective. Let’s break down the key differences to help you make an informed decision.

1️⃣ Understanding Doctors of BC (DoBC) Insurance

DoBC offers what’s known as “association coverage”, where the policy is owned by the association—not you. This structure has several critical implications:

1. Dependence on Membership

   • Your coverage is tied to your DoBC membership.

   • If you relocate to another province, you must maintain your membership (and its annual fees) to keep the policy active.

2. No Guarantees on Cost or Coverage

   • DoBC controls the contract, so definitions, features, and monthly premiums can change at their discretion.

   • This puts you at risk of unexpected changes in your coverage or costs.

3. Age-Based Cost Increases

   • Rates automatically increase every five years.

   • While coverage is free or inexpensive during medical school, costs rise significantly later in your career. Switching to independent coverage at that point can be challenging and more expensive.

4. Government Subsidy

   • DoBC plans are partially subsidized by the government, which lowers costs.

   • However, this subsidy isn’t guaranteed and could be removed in the future without your input.

2️⃣ Why Consider RBC Insurance?

RBC’s disability insurance provides independent coverage, meaning you own the policy outright. Here’s why that matters:

• Portability

  • Your policy stays with you, even if you move across provinces or internationally.

  • There’s no dependency on membership fees.

• Guaranteed Rates and Features

  • Premiums are typically fixed and won’t increase with age.

  • Policy definitions and benefits are guaranteed for the life of the contract.

• Tailored to Your Career

  • RBC offers specialized plans for professionals, including own-occupation coverage, ensuring you receive benefits if you can’t perform your specific medical role—even if you could work in another capacity.

• Long-Term Value

  • While the initial cost may be higher, fixed premiums and guaranteed coverage provide better value as your career progresses.

Key Takeaway 🔑 

While DoBC’s insurance may seem like the more affordable option upfront, it comes with significant limitations and risks as your career evolves. RBC’s independent coverage offers long-term stability, portability, and predictable costs, making it a better choice for many medical professionals.

When choosing disability insurance, think beyond today’s price tag—invest in a policy that will protect your future.

Have Questions About Disability Insurance?

Get personalized advice from a trusted broker I worked with in my 4th year! Protect your future with the right coverage—start today!

Did you know?

Give me the evidence ⚖️

The Ontario Medical Association’s (OMA) disability insurance plan has long mirrored similar provincial offerings, like the one from Doctors of BC (DoBC). However, the OMA’s experience over the past few years highlights significant risks associated with association-based insurance.

What Happened with OMA’s Disability Insurance?

1. Demographic Shift

   • Over time, more Ontario physicians began opting for independent disability coverage over OMA’s plan.

   • This left the OMA plan disproportionately filled with older physicians, who were more likely to make claims, while younger, healthier physicians—less likely to claim—exited the pool.

2. Impact on Insurer Profits

   • With fewer contributions from low-risk individuals, the insurance company backing OMA (Sun Life) began losing profitability.

3. Major Changes

   • 2021: Premium rates increased by 22%.

   • 2022: Sun Life exited the partnership, and Canada Life Premier briefly took over.

   • 2023: After just one year, Canada Premier also exited, and Manulife became the new insurer.

What Does This Mean for Physicians?

The OMA’s experience is a wake-up call for any physician relying solely on association-based insurance. When insurers struggle to stay profitable, the ripple effects are often felt by the insured—through rising premiums, reduced benefits, or even the sudden need to switch providers. It’s a reminder that stability is key when it comes to something as crucial as your disability coverage. While these changes can feel unsettling, they also highlight the value of exploring independent coverage options, which offer more control and long-term peace of mind.

The Connection to DoBC

Here’s where it gets interesting: Manulife, the new insurer for the OMA plan, also backs DoBC’s disability insurance. If challenges continue with the OMA plan, it’s possible that DoBC policies could be impacted as well. While this might sound concerning, it’s an opportunity for proactive planning. By understanding the risks and evaluating your options now, you can ensure that your financial future remains secure, no matter what changes may come.

Until next Saturday…

Christian, Founder of Budget Your MD

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