Introduction to Disability Insurance for Physicians
As a physician or dentist, it is critical that you insure the possibility of becoming disabled with the right insurance policy. According to the AMA’s Annual Physician Financial Preparedness Survey, approximately 70% of physicians purchase an individual disability insurance plan. However the products available and process to do so can be complex and full of misinformation. For that reason, Blankit has put together the ultimate guide to Disability Income Insurance for Physicians and Dentists. Throughout this guide, we will provide tips and advice for selecting the best disability insurance policy based on your unique needs in your specialty. Blankit will provide recommendations on ways to save money when buying and choosing the right amount of coverage for you and your family.
When is the best time to purchase disability insurance for physicians?
NOW. Insurance companies evaluate and price premiums based on multiple factors including your age and overall health. The older you are, the more risk the insurance company takes on to cover you in the event you become disabled, therefore the more they may have to pay in monthly benefits. All else equal, the premiums you pay over the life of the policy will be less expensive if you purchase a policy at 30 than they will at age 35, 40, 45 etc. Blankit is here is answer all of your questions, but as each day goes by, your policy premium goes up.
How much coverage do I need?
For doctors in residency or fellowship, benefits are typically capped between $5,000 and $6,500 regardless of your specialty and current annual income during training. When you complete your residency or fellowship, your monthly benefit from your disability insurance policy can be increased based on your new earnings. Doctors should determine their monthly living expenses and amount of income needed to be replaced in the event he or she becomes disabled, and is unable to perform the duties of his or her medical specialty. Generally, up to 60% of your annual income can be replaced. Use this quick tool here to help determine your shortfall.
What happens if I become disabled?
Hopefully this never happens, but in the event the insurance company determines you qualify for disability income, they will pay the agreed upon monthly benefit based on your Disability Income policy. However, this process can be daunting if you are unaware of what to expect. The insurance company will request documentation from your physician and will need to consider the language of your individual policy. For instance, there is a big difference between “temporary” and “permanent”, “total” and “partial”, and “qualified occupation” and “any occupation”. Luckily, if you own an individual disability income policy, the monthly benefit you receive will be tax free. It is important for everyone, not just physicians, to consider purchasing a disability income policy if you haven’t already. Contact a Blankit insurance specialist to determine the right policy for you.