Disability Insurance is Paycheck Protection for Doctors

Physicians often protect their practices from harm with medical malpractice insurance, but what if you sustain a disabling illness or injury that prevents you from practicing medicine? Disability insurance provides financial protection if you should become unable to work due to an injury or illness.

Why Doctors Need Disability Insurance

It’s likely that your earning potential as a medical professional is your most valuable asset. If you sustain a disabling illness or injury that prevents you from practicing medicine, disability insurance will provide a safety net by replacing a portion of your income. You can protect yourself and your assets – even if you can’t earn a paycheck.

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No physician wants to think about the worst-case scenario: that they can no longer physically or mentally perform the job they’ve dedicated their lives to. But what would it look like if you couldn’t see patients – or generate income – for a year, two years, or even a decade? Doctors often pay attention to life insurance needs but fail to consider the possibility of a debilitating incident that brings their medical career to a standstill, whether temporarily or permanently.

As a medical malpractice insurance broker who works with and supports independent physicians and small groups of all kinds, our mission at MEDPLI is to make navigating the complex world of insurance a little less painful, so we’ve put this guide together for doctors who are interested in learning the basics of disability insurance.

Features Doctors Should Look For in a Disability Insurance Policy

Individual vs Group Disability Insurance

Even if your workplace offers group long-term disability insurance, you won’t be able to tailor it to your unique needs. Investing in an additional disability policy provides more robust coverage. Individual coverage stays with you if you switch practices, and the benefit income these policies provide is usually tax-free because premiums are paid with after-tax dollars. Most insurance companies will issue individual disability insurance coverage equal to approximately 60% of earned income.

Short-term vs Long Term Disability Coverage

Short term disability is designed to cover temporary injuries and illnesses – usually 3-6 months. Short term disability is usually provided by your employer as a workplace benefit to supplement your income until you are able to return to work, and isn’t typically offered for individual purchase. For coverage in the event of a serious injury or illness, you need long term disability insurance.

True Own-Occupation Definition of Disability

Perhaps the most important feature in a disability insurance policy is a true own-occupation definition of disability. True-own occupation disability insurance protects you in the event you’re not able to do the duties of your own occupation.

Surgeons should be certain their disability insurance will pay in the event that they cannot practice surgery, even if they could practice a less physically demanding job in the same field. For example, an own-occupation policy will pay a claim if a cardiac surgeon has severe arthritis and can no longer practice cardiac surgery. A less expensive policy (like an any-occupation policy) would not pay the surgeon’s claim if they are physically able to practice office-based cardiology. Without true own-occupation insurance, you will not be able to collect benefits if you are still able to do some of the functions of your job.

How Much Does Disability Insurance for Doctors Cost?

Most physicians spend 2% to 5% of their annual income on disability insurance. There are a variety of factors that affect the cost of disability insurance, including but not limited to:

  • Age – The older you are, the more you can expect to pay. The younger and healthier you are when you enroll, the less you’ll pay.

  • Gender – Women tend to file more claims than men, so their rates are generally higher. Sometimes, unisex rates are available

  • Specialty – some specialty providers, like anesthesiologists, are considered higher risk than others

  • Location – Rates and policies vary from state to state, so where you live will greatly impact how much you pay

  • Health – Pre-existing conditions and poor health conditions will increase your monthly cost

  • Benefit Length – The longer you receive payments, the more you pay in premium. Benefit periods typically range from two years to retirement age

  • Elimination period – The longer the waiting period before your benefits are paid, the less you will pay

  • Riders – Riders can be added at the beginning of your policy and add extra coverage for an extra price. Common riders include Residual Disability, Future Increase, Cost-of-Living Adjustment, Catastrophic Disability, and Student Loans

Just as with medical malpractice insurance, the easiest way to get a tailored policy that fits your needs is by consulting with an independent broker that offers disability insurance for doctors. An independent broker like Leveragerx.com can help you find the best rates from A-rated carriers and shop around for you, because they don’t represent the interests of a specific insurance company.

Still have questions about disability insurance? We’re happy to help guide you! Fill out the form below and we’ll recommend a qualified broker or contact us at 1-800-969-1339 to speak directly with our team.

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