Why Should a Physician Have Disability Insurance?
Your skills are in your knowledge and your ability to physically and mentally apply that knowledge. You have made an extraordinary investment in time and money to get where you are today and you and your family’s continuing financial well-being is tied to application of your medical knowledge and skills. The right disability policy protects that investment.
If you are unable to perform your duties as a physician, you are aware of the need to insure the replacement of that income with quality disability insurance from the right insurance company.
Some of the features to look for in disability insurance policy for physicians:
- It should be backed by a financially strong disability insurance company with top financial strength ratings from the independent rating services. Financial strength is the first consideration. After all you will be making a “deposit of your future earnings” with this financial institution in the event of your disability i.e. they’ll be the “bank” that holds your income. Make sure it’s strong.
- A physician’s disability insurance policy should have an “Own Occupation” definition of disability. The insurance policy should define disability as the inability to perform the material and substantial duties of your occupation known as the true “Own Occupation” definition of disability.
- Ideally, the disability insurance policy should have an even stronger own occupation definition of disability. It should define your occupation not only as a physician but further define your occupation as your specialty.
- There are other important issues to consider, including the important issue of residual and recovery benefits. These differ widely among companies Disability insurance for physicians should have residual and recovery(partial disability) definitions properly defined.
Many physicians are aware that when choosing disability insurance that an occupation and a specialty definition of disability is important but may not be as aware of the differences of how a claim is paid during recovery and when there is still a residual disability after a doctor returns to their profession on a partial basis.
To simplify this part of a doctor’s disability insurance policy: One should get a disability insurance policy that covers loss of income during recovery versus one that defines residual disability as loss of “time and duties.” An example of a more beneficial doctor disability insurance policy may be helpful in demonstrating this important aspect:
Doctor Smith has a physicians’ disability insurance policy and has been receiving income payments for total disability and has recovered to the point where she has returned to her practice but there is likely a reduced cash flow. Even though Dr. Smith is seeing patients and working full time it may be quite awhile, if ever, before her practice builds up again and she has the same income as before disability occurred.
So how do two different disability insurance companies treat this? The physicians disability insurance through Company A with a time and duties definition of residual disability would say after six months of Dr. Smith being full time at work that Dr. Smith has recovered and benefit payments would end. The physicians disability insurance through Company B with an income definition of disability would pay pro-rata payments to Dr. Smith until she was earning more than 85% of her pre-disability income.
Your LifeInsure.com representative can tell you more about these riders and how the various definitions can impact a claim.