Financial Planner

[planet]

Never been to one.

I'm sure this has been covered before, but humor me and please pass on any insight as to what exactly they do. I think stocks/bonds/retirement and insurance when I think financial planner. When coming up with getting out of debt plans and contract perk plans and such, is that part of their game? What "investments" are more of necessities?

We have carried life insurance on dh since having our first kid. Now we feel like disability insurance is also a necessity given the investment made in his education in this field.

What kinds of questions do you ask when consulting with one?

[DCJenn]

Re: Financial Planner

Ours had us fill out a huge questionnaire- it includes everything from how often do you want to take vacations to how comfortable are you w/ risky investments to do you pay your bills online.

Then he reviewed the answers w/ us and determined our comfort level w/ each section. We talked about when Rick will leave the military, when I want to retire, when he wants to retire, what insurance needs we have now, what we'll need when/if he goes into civilian medicine, etc.

and then we started at baby steps. Like: you need X amount in savings and that's step number one. Step two is to pay off the consumer debt in this order....

They know that when you're in the position most of us are in, investments and discretionary income are a LONG way off.

Jenn

Re: Financial Planner

I agree with you about the disability insurance. A few thoughts on that -- it is expensive (IMO, relative to life insurance). You might want to start with a low level of coverage and ask about how you can up it in increments. You might need an additional rider to let you start at, say $1,000 of coverage and add $1,000 every year or something.

There are only a few disability providers that have good policies for physicians so make sure you are getting a good policy. This has changed a little so I don't want to misinform but you want to ask about something like same-specialty and same-profession coverage so that if someone is disabled but deemed able to work in a different profession, they still get disability coverage.

Once you have private coverage, make sure you aren't double paying with a policy through work. Oftentimes the employer based coverage will take individual plans into account. So, if your employer offers $1,500 a month in disability and the employee has $1,000 a month in individual coverage, the employer-based plan would only pay out $500. And since they usually count social security in that too, the employer based plan wouldn't pay anything.

[Deebs]

Re: Financial Planner

For disability insurance, we were also advised to make sure the contraction of blood-borne pathogens (ie AIDS, Hepatitis, etc) was covered. Since DH is in EM, this is apparently a typical "red flag" of too many exclusions if they are not included. We lucked out with DH going into academics, as his employer has great disability that covers everything plus some, at a really good rate. During residency, we had the policy through DH's program and then just a little gap policy to go above and beyond.

Re: Financial Planner

I think that Makai posted a while back about getting good rates on disability through the AMA and also getting a good policy that had "those things" you want included.

My MIL has disability through her former academic position and thank goodness she did. One thing we learned is that her policy deducts her social security disability payment from the coverage. I have since paid closer attention to this detail and I think it is pretty common. That isn't really a problem but just good to know when you are planning and figuring what monthly disability income would be should you need it.

Re: Financial Planner

We bought DH's disability policy through the AMA a few years back. I'm not sure if they are still contracted to sell plans through the same carrier that we have or if they have moved on to a different one, so if you do check with AMA make sure you know who their carrier is and then research them to find out their rating. It was quite a bit less expensive than the one we had originally purchased through our planner and it had the options we wanted/needed.

I think a large part of the savings comes from not having to pay a commission to our financial planner. DH and I joke that we made his car payments for the couple of years that we had a policy through him.

When looking at different disability policies, be sure to find out when they will start making payments should your DH become disabled and for how many years. And as Nellie pointed out, be sure to get same-specialty coverage.

I suggest you do A LOT of shopping around when looking for disability coverage. Your financial planner is working on commission so the policy he wants you to buy may or may not be the one that is best for your family. And if there is any way you can swing it right now, I would suggest getting a life insurance policy for yourself.

Your planner can help you with a get out of debt plan. We started working with a planner when DH was a PGY-2 and we had zero savings. He acted as a cheerleader for us and made us more optimistic about the future. I know it's hard to predict what your earnings and benefits will be with the next job, but at least he can get you started now and you can reassess when things change. Ours created a portfolio that gave us an idea of how long DS and I can live off of DH's life insurance policy and vice versa (it took into account our current assets/liabilities.) It also outlines how much we have to save monthly for DH to retire at 55 versus 58 or 60. It helped tremendously to have some goals written down.

[planet]

Re: Financial Planner

Food for thought.

I can see I have a lot of looking into to do. I spoke with three people today (between screaming sessions - thank you ds2) and did get some good tips. It sounds like it may vary quite a bit in what a fp will do and how they make a living at it. Pitfalls like the disability amount changing with ss payments and specialty specifics are exactly what I want to know about. One guy said shortly after my brief introduction, "I hear a kid in the background. So your husband is never around and you'll have the debt to consider once he's an attending." I took that as a good sign that he knew a little something about where we are and scheduled a free consult for next month. I was advised wisely by another to avoid seminars and salesmen.

I just hope having to look at the actual numbers won't induce panic attacks.

Re: Financial Planner

Janet -- to clarify on the SS and individual policy disability. In my limited experience with this, it tends to be an issue with group policies and not individual. It is still a good point to clarify and is often in the fine print. Another thing in the fine print -- if disability coverage is a percent of salary (like 60%) check to see where it caps. Chances are good with a physician salary that it caps lower than 60% of your actual salary (that is for employer policies though).

Some time ago I came across a list of the disability insurers that write policies with physician type coverage. DH has Berkshire Life and there are 2 or 3 others. I'll let you know if I can find it.

Re: Financial Planner

DH has Guardian for his individual policy.

It looks like AMA has a contract with United States Life now. They're rated highly by Fitch and AM Best, but I don't know any specifics about their policies.

[DCJenn]

Re: Financial Planner

I just hope having to look at the actual numbers won't induce panic attacks.

Well, my USAA guy hasn't once laughed at us. (with us, yes. especially since we actually DID buy the money pit)

Jenn

[poky]

Re: Financial Planner

Jenn, do you recommend USAA FPs for medical non-military people? I have access to them because my ex was military, but all we have through them right now is a savings account and one car's insurance. We really need to find someone for general planning, and someone to do our taxes this year, too - if anybody has any recommendations, feel free to PM me.

[DCJenn]

Re: Financial Planner

I recommend USAA for everything- their financial planners have been great. and my BFF whose tenuous relationship to USAA is through her husband's ex-wife's ex-husband had them do their financial planning and her crazy MIL's financial plan. So, they're just plain good as far as I can tell. I'll PM you our guys name.

and I just discovered that my debit card was used to buy American Airlines miles and 12 airline tickets (going home for the holidays? Priceless...on someone else's dime) and everything is already been taken care of and we are not responsible for any of the charges and should something go through that would bounce, we won't be charged any fees (like the mortgage payment due in 5 days...)

Jenn

[planet]

Re: Financial Planner

and I just discovered that my debit card was used to buy American Airlines miles and 12 airline tickets (going home for the holidays? Priceless...on someone else's dime) and everything is already been taken care of and we are not responsible for any of the charges and should something go through that would bounce, we won't be charged any fees (like the mortgage payment due in 5 days...)

:thud:

That's awesome that they took care of it. Wow.

Re: Financial Planner

12 plane tickets?


Here is a link to some information about disability insurance. DH bought his policy through this company. Granted, she sells individual policies but I have read similar information from other sources. In the next few months I think we (HA! I) will look the AMA coverage that Makai mentioned.

http://www.kfdisability.com/disability/ ... ns.html#vs.

[planet]

Re: Financial Planner

Yet another ignorant question...

When did you get disability policies yourself? The residency provides decent (60% of the resident salary) coverage free of charge, but my thought was that having more realistic coverage would be better. Maybe this is too soon to do that though? As I am reading I can't help but wonder if this is something that is going to be addressed during the job search process?