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Nobody is better suited to understanding the frailty and unpredictability of life than we are. So, it shouldn’t take much convincing to set concrete plans for protecting our dependents in the event we pass away. By Christopher Malgieri, MD

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It seems counter-intuitive, but the beginning of your career is the most important time to think about the end. Sometimes the end is expected, worked for and celebrated. And sometimes it’s not.

While most of us are ready to take the step in acquiring life insurance, it’s easy to get overwhelmed with the options. It’s even easier to fall victim to predatory vendors who offer products that may not be aligned with the needs of your loved ones.

Like succinylcholine and epinephrine syringes tucked away in your workstation, you hope never to use it. But if there is a single person on this planet that relies on you for support, it is a must-have. Insurance comes in many forms, but for the sake of simplicity I narrowed it down to three buckets.

Term life Insurance: A simple policy that guarantees a payout to beneficiaries upon your passing. Policies are purchased for specific lengths of time (i.e. 10 years, 20 years etc.). Premiums are increased with advancing age, and for increased lengths of terms. When you purchase high-value policies (and if you are an anesthesiologist hoping to replace lost income to your family, you should) – you will likely be required to have a physical exam. Pre-existing health conditions can lead to increased premiums, or disqualification. Thus, it’s important to lock in good health.

If you are a resident or fellow, and you’ve been blessed with the miracle of parenthood, you need to budget for a life insurance policy. AMA Insurance (underwritten by New York Life) provides very reasonable rate that any trainee should find affordable. I purchased a new ten-year policy each of the two times my wife had a baby. When they reached the age of 10, I purchased a second ten-year policy at nearly double the rate.

In the long run it would have been cheaper to buy a 20-year policy, but at the time of initial purchase we did not have the disposable income. I assumed we’d be in a different financial position in ten years and the increased premium wouldn’t be as much of a burden. Thankfully, I was right.

Whole Life Insurance: You’ll immediately note two obvious characteristics of whole life insurance. First, it’s much more complicated and expensive to purchase. And second, insurance agents are feverishly eager to sell it to you. Many went as far as calling me short sighted or inconsiderate when passing on it.

In essence, whole life insurance promises a life-long, stable premium. In exchange, your loved ones will receive a guaranteed death benefit upon your passing. Whole life policies also have cash value growth over time in which you can borrow against or even, depending on the policy, withdraw. Since the cash growth is tax-deferred, it can be used as a vehicle to increase net worth and shield assets from the IRS. Advocates for whole life will point out the utility when you’ve maxed out other tax-advantaged retirement accounts.

Historically, however, value growth in whole life insurance has been dwarfed by literally any other investment you can imagine. If you are a young physician in the lucky position of complex, high-value estate planning, then perhaps you should dive deeper into whole life and consult someone smarter than me. If your future potential income far outweighs your current bank statements, then whole life is probably not for you.

Self-Insurance: Not ideal. But like the emergency case for a patient that is not optimized for surgery, sometimes you have to make due with what you have. One of my colleagues survived an episode of cardiac arrest when she was running a half marathon in medical school. Despite medical and electrophysical interventions, she's continued to suffer from chronic atrial fibrillation. She's found it impossible to obtain reasonably priced life insurance - making self insurance her only option.

She leads a Dave Ramsey-inspired life without debt. Lives in a modest home and started building an investment portfolio immediately. She chose a job that has employer-sponsored life insurance .

But self-insurance isn't all bad. Ultimately, it's where we all should aspire to land. When my assets have reached a point sufficient to care for any dependents, I plan to subscribe to the same self-insurance policy as my colleague. The goal with life insurance isn't to make your bereaved rich - it's to make sure finances won't add to the stress of a tragedy.

Christopher J. Malgieri, MD, is a pediatric anesthesiologist with Lifespan Physician Group and Program Director for the anesthesiology residency at Brown University in Providence, RI. Dr. Malgieri completed his medical residency as chief resident at Emory University in Atlanta. He is a member of the Society of Pediatric Anesthesiologists and serves as President of the Rhode Island Society of Anesthesiologists.

The ASA Committee on Young Physicians is pleased to present this monthly article series on personal finance. These articles are not written by hedge fund managers or real estate tycoons but by practicing physicians. Some have business degrees and some do not – but every contributor is an anesthesiologist who has some guidance to offer the rising generation of attending physicians. It is not the intention of the committee to offer definitive financial advice, but rather some pearls of wisdom to consider while developing a personal fiscal plan.

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