My supplemental policy details and cost
I bought a supplemental policy while working in Biglaw. I felt that the firm coverage offered to a senior associate represented too much risk and that I would suffer a severe decline in lifestyle if I were to become disabled. Supplemental policies aren’t expensive either, making it easier for me to decide to purchase the policy.
My supplemental policy pays a $6,000 monthly benefit (remember this is tax-free). It also includes a bunch of disability insurance riders, like the future increase option rider, an enhanced partial disability benefit rider, a cost of living adjustment rider, and an enhanced catastrophic disability benefit rider.
The total cost is around ~$2,300 a year or around $190 per month. For a senior associate making $415,000, this represents a trivial amount to take risk off the table and certainly let me sleep better at night.
How to get quotes for a supplemental policy
If you’re interested in purchasing a supplemental policy, the next step is to get quotes. Only a handful of carriers sell individual disability insurance, so you’ll want to talk to any independent insurance agent that can get you quotes from all of them.
Our insurance company Sidebar—the only one created by lawyers for lawyers—can help get you a customized quote for a supplemental disability insurance policy.
Our strategy is pretty simple: find the least expensive policy with the coverage you actually need.
If you get a quote through us, we will search for the best policy we can find and we’ll also apply any discounts that might be available to you (e.g. bar associations). If we know of a better discount available elsewhere, we’ll point you to it even if it means we don’t make anything.
I set up Sidebar as an independent agency so we can get quotes from each of the “Big 5” true own-occupation options. We’ve partnered with fellow agents Pradeep and Matt who each have more than a decade of experience writing own-occupation policies to lawyers and other high-income professionals. In fact, I bought my policy with Pradeep’s guidance!
How to get even deeper discounts
One of the reasons we set up Sidebar as an independent agency is because we know that disability insurance companies want to compete for your business.
That’s why we’re excited to say that if you bring us two colleagues from your firm who buy a supplemental policy at the same time you do, we can get the insurance companies to offer an additional discount of 20-45% off everyone’s policy.
Not only that, but the insurance company will continue offering that discount to everyone at your firm in the future. By being the pioneers for your firm, you’ll be helping current and future associates.
How can we get this 20-45% discount? Two reasons: group risk and unisex policies.
Insurance companies will offer discounts to lawyers working at the same firm (that’s the “group risk”).
The second reason is that the insurance company will offer a unisex policy.
This benefit is especially fantastic for women lawyers.
Women pay less for term life insurance but significantly more for disability insurance, based on actuarial risk tables. Therefore, an insurance company offering sex-specific policies will charge women a higher price than men for the same policy.
If we’re able to get three people from a firm (doesn’t matter whether they are men or women) to apply for supplemental disability insurance, we can convince the insurance company to write a unisex policy for the firm going forward.
A unisex policy is exactly like it sounds. The policy is priced the same regardless of sex.
The unisex policy will be significantly cheaper for women. Meanwhile, men will also typically find a unisex policies cheaper thanks to the group discount that goes along with it.