Disability Insurance

Your disability insurance premium structure affects not just what you pay today — but what you’ll pay over the next 30+ years.

Both level and graded premium options offer the exact same coverage — but they structure the cost very differently over time.

💡 Think of it like choosing between a fixed-rate and an adjustable-rate mortgage. A level premium is like a fixed-rate loan — you pay more upfront, but your monthly cost stays flat and saves you more long-term. A graded premium is like an adjustable-rate mortgage — cheaper in the beginning, but it increases over time.

🏁 Quick Summary:

• Level Premium = Pay more now, pay less later.
• Graded Premium = Pay less now, pay more later.
• Same coverage — different payment strategy.

With a level premium, your monthly cost is based on your current age — and it never increases. It’s predictable, permanent, and usually the lowest total cost if you keep your policy long-term.

👍 Pros

• 💸 Lower lifetime cost — best value if you keep your policy long-term
• 🧠 Set-it-and-forget-it — no need to convert or revisit later
• 🔒 Premium stays the same forever

👎 Cons

• 💰 Higher upfront cost — typically ~$90–$130/month during training
• 🧾 May be a stretch if you’re juggling student loans or tight budgets

“I plan to keep this policy for decades — it’s cheaper to pay more now and lock in the lower total cost. Level makes the most sense.”

A graded premium starts significantly lower — often 40–50% less than level. But it increases every year. If you keep it long-term, it becomes significantly more expensive.

👍 Pros

• Fits a resident’s budget — typically ~$45–$75/month to start
• 🕒 Buy now, upgrade later — get protected early, convert when income rises
• ✅ Same strong coverage and benefits as level premium

👎 Cons

• 📈 Cost rises every year — gets more expensive over time
• 🔁 Will need to revisit and convert to avoid long-term overpayment
• 💵 If kept forever, total cost may be much higher than level

📉 “I only have room for about $60/month right now, and I want something in place while I’m most vulnerable financially. Graded makes sense for me, and I’ll convert later.”

Yes — the carriers allow you to convert from graded to level, but only up to a certain age:

• Guardian: before age 50
• MassMutual: before age 40

Keep in mind: The cost of converting goes up the longer you wait, since your new premium is based on your age at the time of conversion — not your original rate.

‼️ What most people do - and Why it backfires

Most residents choose graded with the plan to convert later. But once life ramps up — fellowship, loan repayment, home purchases, family — it’s easy to forget.

Result: Many delay converting, and their premiums keep rising year after year.

Smart Move: Set a calendar reminder to revisit your policy 2–3 years after training and consider switching to a level premium while the rate is still manageable.