Things to Consider When Buying Physician Disability Insurance
Physician disability insurance is an important financial planning tool that can help you maintain your income if you become unable to work due to illness or injury. With the high cost of medical school and the high-stress nature of the job, physicians are particularly vulnerable to disability.
When buying physician disability insurance, there are a number of factors to consider, including:
Definition of disability. The definition of disability is one of the most important factors to consider when evaluating a policy. Some policies have a strict definition of disability, requiring that you be unable to perform any occupation for which you are qualified. Other policies have a more liberal definition of disability, allowing you to receive benefits if you are unable to perform your own occupation or any other occupation for which you are reasonably suited.
Benefit amount. The benefit amount is the amount of money you will receive each month if you become disabled. It is important to choose a policy that will provide you with enough income to cover your living expenses and maintain your standard of living. Most experts recommend that physicians purchase disability insurance that will replace 60-70% of their pre-disability income.
Waiting period. The waiting period is the amount of time you must be disabled before you start receiving benefits. Most policies have a waiting period of 30, 60, or 90 days. A shorter waiting period will provide you with financial protection sooner, but it will also come with a higher premium.
Premium cost. The premium cost is the amount of money you pay each month to keep your policy in force. Premium costs vary depending on the factors listed above, as well as your age, health, and occupation.
Riders. Riders are optional features that can be added to your policy to provide additional coverage. Some common riders include:
- Cost of living adjustment (COLA): This rider increases your benefit amount each year to keep pace with inflation.
- Own occupation rider: This rider allows you to receive benefits if you are unable to perform your own occupation, even if you are able to perform another occupation.
- Student loan rider: This rider pays off your student loans if you become disabled.
Financial strength of the insurance company. It is important to choose a policy from a financially strong insurance company. This will help to ensure that the company will be able to pay your benefits if you become disabled.
Group coverage from your employer. Many employers offer group disability insurance coverage to their employees. This coverage may be sufficient for some physicians, but it is important to review your employer’s policy to make sure that it meets your needs.
Your individual needs. Your individual needs will vary depending on your age, health, income, and expenses. It is important to work with an experienced insurance agent to choose a policy that is right for you.
Here are some additional tips for buying physician disability insurance:
- Buy coverage when you’re young. The younger you are, the healthier you are likely to be, and the lower your premiums will be.
- Get pre-approved for coverage. This will give you an idea of how much coverage you can afford and what your premiums will be.
- Compare policies from multiple companies. Don’t just buy the first policy you see. Get quotes from multiple companies to compare premiums and coverage.
- Work with an experienced agent. An experienced agent can help you choose the right policy for your needs and budget.
Disability insurance is an important investment for physicians. By following these tips, you can choose the right policy for your needs and budget and protect your financial future.