Personalized Disability Insurance Proposals
To start this journey, fill out the short form for a custom quote. Let us help you create a safety net that lets you focus on your patients, knowing that your financial future is in safe hands.
Physician disability insurance provides income replacement for doctors unable to work due to a disability. This specialized insurance is often tailored to each medical professional, considering the high investment in their education and the physical demands of their jobs.
Becoming a physician requires many years of rigorous and expensive schooling followed by years of hard work. Those student loans and your mortgage don't care that you developed a disability.
Let’s say you get into an accident or experience an illness that makes it impossible for you to work and receive your regular income. If you have a disability insurance policy, you can receive income through your policy benefits each month.
You can purchase disability insurance through an insurance company or through some employers' group plans. There's also Social Security disability benefits but they're much lower than most doctors are used to.
If you're not yet a physician, check out our Individual Disability Insurance Guide for Residents and Med Students.
Physicians face higher risks of disability due to the physical and mental demands of their profession. With high earning potential and significant financial responsibilities, a sudden inability to work can be devastating without proper coverage.
"My first recommendation would be to seek out an independent agent who can present you with a comparison of several companies to make sure you are getting the best deal. If their business card has the same logo as the policy they are presenting you, they have a conflict of interest." - Chris Gure, PPC
Own-occupation insurance pays benefits if a physician cannot perform their specific job, while any-occupation insurance requires inability to perform any job. For physicians, own-occupation policies offer crucial protection.
Don't be fooled by "Modified Own-Occupation" or "Two Year True Own-Occupation". "Modified" is much more vague and you're less likely to be able to receive disability benefits. "Two Year" policies often become much less inclusive after two years and you'll likely have to go back to work.
Physician disability insurance can be specifically designed for physicians of a specific specialty; cardiologists, OB/GYN, surgeon, etc. Own-occupation policies are particularly vital for physicians due to their specialized skills. If a surgeon can no longer perform surgeries (or see patients) but can still work in a support role, they will still receive disability benefits under an own-occupation policy.
Already have a disability policy and want a second opinion? Text "second opinion" to 919-504-5220 so I can verify if your policy is a True Own Occupation policy. I'll tell you if it actually provides protection.
The cost of disability insurance depends on factors like age, health, occupation, and coverage amount. Premiums typically range from 2%-6% of the monthly benefit.
Several factors affect premiums, including:
- Age and Health: Younger, healthier individuals pay less.
- Specialty: High-risk specialties like surgery have higher premiums.
- Coverage Amount: Higher payout amount increases cost.
- Policy Features: Riders like cost-of-living adjustments (COLA) add to premiums.
Determining how much disability coverage you need as a physician involves assessing your financial obligations (mortgage, med school loans, family) and future goals (retirement, vacation, college fund, etc). Disability insurance typically covers 45%-65% of your gross income.
To maintain financial stability, aim for coverage that aligns with or exceeds your monthly expenses.
Here's a detailed approach to estimating an appropriate coverage:
Start by listing all your monthly expenses, including:
- Living Expenses: Rent or mortgage, utilities, groceries, transportation, and other day-to-day costs.
- Debts: Student loans, credit card payments, car loans, etc.
- Insurance: Health, life, and professional liability insurance premiums.
- Savings and Investments: Contributions to retirement accounts, education funds, and other savings.
Let's consider Dr. Smith, a 35-year-old pediatrician:
- Annual Income: $200,000
- Monthly Expenses:
- Living expenses: $3,000
- Mortgage: $2,500
- Student loans: $1,000
- Insurance: $500
- Savings: $1,000
Dr. Smith's total monthly expenses are $8,000.
Coverage Example:
- If Dr. Smith wants to replace 60% of her $200,000 income, she would need $120,000 annually in benefits.
- This translates to $10,000 per month, exceeding her total monthly expenses.
Think about potential future expenses, such as:
- Children's Education: Anticipate future costs for private school or college tuition.
- Career Changes: Coverage should accommodate any potential changes in your professional role or specialty.
- Lifestyle Adjustments: Account for lifestyle changes or upgrades you might plan.
Review any existing disability coverage from your employer or other sources. Supplementary policies may be needed to fill gaps in coverage. Employer disability policies commonly have narrow definitions of disabilities that they pay out for. If your employer's disability policy looks confusing or inadequate, reach out to me so I can look over it.
Consider policy features like:
- Own-Occupation vs. Any-Occupation: Own-occupation policies provide better coverage for specialized roles. Our firm only writes true own-occupation policies for physicians.
- Benefit Period: Choose a benefit period that aligns with your long-term financial plans.
- Elimination Period: Balance the waiting period before benefits begin with premium costs.
Example Breakdown for Dr. Smith
1. Monthly Expenses: $8,000
2. Desired Income Replacement: 60% of $200,000 = $120,000 annually or $10,000 monthly
3. Future Costs: Plan for additional savings for children's education and potential career changes.
By considering these factors and comparing several policies from multiple carriers, Dr. Smith ensures her disability insurance coverage adequately protects her financial well-being in case of a disability. This approach helps maintain her lifestyle and supports her long-term financial goals.
Finally, consult with a financial advisor or insurance expert to tailor a policy that meets your unique needs and provides comprehensive protection.
To start this journey, fill out the short form for a custom quote. Let us help you create a safety net that lets you focus on your patients, knowing that your financial future is in safe hands.
