Updated: Oct 13, 2022
Hi, it's Jon from Financial MD with today's Didactic Minute. As you can see, I’m outside, taking a walk. It's nice, but it's also because this is pretty much the only thing we can do right now, and it's the only way for me to work from home and record a video without my 4 children running around, trying to beat me up and pretty much destroying the entire house.
So, a little more peaceful outside. And that kind of brings me to my topic today, life insurance. Do you need it as a resident? When is a good time to get it? What is it? Well, the quick and dirty is there's 2 types of life insurance. Today, we're going to talk about 1. There’s term, there's permanent. As resident, you should only be looking at term. Hi, kitty. If someone tries to sell you permanent insurance, you should pretty much run the other way. It's something that can be useful as an attending when the income justifies it. But for a resident or a fellow, let's talk about term insurance.
What is it? Well, you pay a premium monthly or annually or however often you want. And if you pass away during the term, your family or whoever the beneficiary is gets the death benefit. Now, you get to pick that term when you initially start the application. It can be 10 years, 15, 20, 25, 30 years, however long you want. But the longer it is, the more expensive it is because the greater risk for the insurance company that you're going to die in a period of 30 years versus 10.
So, what's the process? Well, you fill out an application, usually takes a week or 2 to get kind of all said and done, depending if they want to order medical records. There's usually some health questions. Sometimes you have to do labs, get blood drawn, do your analysis, but the insurance company is usually pretty flexible about when and how they do that. And once it's done, it's done. You've got it, and you can move on to the rest of your financial planning. So, I suggest you get that while you're young and healthy, and then we can talk about the rest of the financial stuff that we need to.
So, again, this is John from Financial MD with today's Didactic Minute.