Physicians are a daily witness to the devastating effects that disabilities can have on one's family and career. Disability Insurance is a critical way to protect yourself and your family in the eventuality that you may one day become disabled. While there are many insurers and policies to choose from, there are a few facts you should know before seeking coverage.
Key items on Physician Disability Insurance
Own Occupation: This policy definition requires that a Physician seeking benefits be deemed disabled and unable to practice within their current specialty. This coverage does not preclude a Physician from working in a new occupation or practicing in another medical specialty that is not affected by the disability.
Any Occupation: This coverage designates a beneficiary as disabled if they are unable to perform any occupation that would align with any of their education, skills or experience. This is the most limiting of the disability definitions.
There are key riders and clauses you can add to enhance your benefit levels.
Future Purchase Option: Policy benefits are based on earnings reported at the time of policy initiation. With the passage of time, Physicians frequently experience an increase in earnings that are not reflected in their policy numbers. The Future Purchase Option allows you to amend a policy in the future to reflect any increases in earnings. This is a good way to increase your benefit levels even after your coverage begins.
Partial/Residual Disability Coverage: Partial Disability coverage is an essential component of any comprehensive policy. This ensures that partially disabled Physicians are covered if they do not meet total disability requirements.
Cost Of Living Adjustments: Inflation is a reality and the costs of living increase with each passing year. A comprehensive disability policy should include a clause accounting for cost of living increases to ensure that you have top level protection.
Premium Costs
The cost of a disability policy can vary based on factors like age, health, occupation, type of coverage and additional riders. A general starting point to calculate policy costs for a young Physician is between 2-6% of expected benefit per month(1).
Check the Fine Print
There are a few things to think about when evaluating a policy.
Policy Portability: Not all policies are portable. Many employer-provided policies cannot be taken with you when you leave for other employment opportunities.
Premium Rate Changes: Be sure to check whether your premiums will be fixed or variable. Locking in fixed rates early can help avoid future financial stresses.
Exclusions It is critical to evaluate all policies for their exclusions. Some policies exclude psychiatric/addiction issues, pregnancy, SCUBA diving, foreign travel, rock climbing, or activities deemed dangerous.