As a physician, you've seen the dramatic impact a sudden accident or illness can have – physically, mentally and emotionally.
But the financial impact can be equally enormous. Should you suffer a debilitating event, the period of recovery can stretch from months to years, draining the funds you and your family rely on to maintain your lifestyle.
Many physicians and other successful business professionals overlook one of the most significant threats to their long-term financial success—a disability. The economic effects of inadequate coverage can be more costly than a divorce, a lawsuit, or the premature death of the family’s primary earner.
While unexpected sickness or injury may interrupt your livelihood, your financial resources needn't be affected. Disability insuranceis the simplest, most cost-effective way to help protect yourself with a reliable flow of income during a period of disability, allowing you to focus on your recovery rather than worrying about financial security.
As opposed to group plans that are often very restrictive and usually do not present sufficient coverage, individual disability insurance offered through insurance advisors is generally considered the best for physicians. This type of coverage offers the highest benefit amounts and the most flexibility in additional coverage options. This option also is portable and can move with you from employer to employer.
If you are age 50 or younger, or if you are older than 50 and have pre-college age children, you should consider an appropriate individual disability insurance policy to be an absolute necessity. Simply put, one cannot undervalue the importance of disability insurance for practicing physicians.
Own-occupation disability insurance is a must for practicing physicians. This clause provides a policy that includes the most comprehensive definition of total disability available. This type of policy will have a definition that says something like:
The inability to perform the material and substantial duties of your regular occupation, the insurance company will consider your occupation to be the occupation you are engaged in at the time you become disabled, they will pay the claim even if you are working in some other capacity.
Own-occupation disability insurance is the only type of policy that does not penalize you for going back to work in a different occupation while you are considered disabled. Under this type of plan, if you cannot perform your occupation as a physician due to disability, you will be considered totally disabled, even if you choose to do something else.
Other Important Considerations
It is essential to know whether your policy is non-cancelable or guaranteed renewable. The difference between these two terms is very important. If a policy is non-cancelable, you will pay a fixed premium throughout the contract term. Your premium will not go up for the term of the contract, nor can it be cancelled. If it is guaranteed renewable, this also means it cannot be cancelled, but your premiums can increase.
It is also important to determine the financial stability of the insurance company underwriting your policies. When considering the purchase of a policy or reviewing a current policy, check the financial soundness of your insurer.
Work with your financial advisor to find high-quality, appropriate coverage with a reputable and respected insurer. The worst-case scenario is that your insurer goes out of business because their premiums were too low. In the disability insurance world, you generally get what you pay for.