After you’ve spent thousands of dollars and hours investing in medical school and your training, your biggest asset is your future income—which is why it’s so essential to protect it.
Disability insurance is a type of insurance that provides income in the case that you are unable to work due to an injury or illness.
A disability ranging from a long-term illness to a disabling accident could end your career and your financial stability.
Protecting yourself and those who depend on you is essential, and to do so you need disability insurance to cover the loss of income you would face in unfortunate circumstances.
In this blog post, we are going to be covering the 5 ways to get the most out of your disability insurance policy.
FIVE WAYS TO MAKE THE MOST OUT OF YOUR POLICY
1. Make Sure it’s True Own-Occupation
True own-occupation is a type of disability insurance that is highly recommended, but what does “own- occupation” mean?
True own-occupation means if you are disabled to the point where you can’t perform the responsibilities of your specialty, but you are able to work at another job, they will continue to pay you the full benefit!
If you don't have own-occupation coverage and you can no longer work in your specialty but you can do another job (like working at a library, teaching, or anything else), you are going to find yourself having your benefit decreased. They may even stop paying you altogether.
Own-occupation is the most important thing that you should look for in your disability insurance policy.
2. Pay Attention to Your Benefit Period
Another important piece of your policy to pay attention to is the Benefit Period. A benefit period is the maximum length of time a policy will continue to pay your benefits.
Ideally, you would like to have a Benefit Period of 65, which means that the insurance company would continue to pay you your benefit until you are 65. This is important to be sure that you are receiving the most out of your policy.
4. Take Advantage of Riders & Benefits
Riders & benefits are optional additions that you can choose to add to your policy to customize it specifically for you, and some are very helpful and highly recommended for doctors.
Catastrophic Disability Benefit
Typically your long-term disability policy will cover 60% of your salary. However, an important rider to look for and be sure you have is the Catastrophic Disability Benefit.
Catastrophic Disability Benefit will pay you an extra benefit amount in the event you become catastrophically disabled due to an injury or sickness.
Catastrophically disabled means that you have a total loss of use, without any possibility of recovery, of the power of speech, hearing, sight in both eyes, activities of daily living or the use of your hands and feet.
The catastrophic disability benefit is paid from the date of disability and does not require an elimination period, so it is always important to pay attention to this rider to ensure your financial security in case of a catastrophic loss.
Residual or Partial Disability Coverage Rider
Residual or Partial Disability Coverage rider is something else that will make your policy work the best for you and is considered an asset to your policy
Residual Disability Insurance comes into play if you can still work after an injury or illness but you have to decrease the amount of time you're able to work by 15-20%. Residual Disability insurance will make up the difference in your pay to keep your income at a steady and stable level.
Cost of Living Adjustment Benefit
A Cost of Living Adjustment is an important feature that helps to keep your benefit at pace with inflation during a claim.
This could make a big difference in the event of claiming a policy, as the average inflation rate over the last 20 years is 2.2%. That means that your benefit would get less valuable every year. So be sure to keep that on the list to get the best policy.
4. Be Sure it is Increasable
To be sure that your policy can adapt to the changes in your income and lifestyle over time, you need to make sure that your disability insurance policy has a Guaranteed Future Insurability Feature.
So as your future income increases, you’ll be able to increase your policy to match. That means that you will always have a stable and secure lifestyle.
Even in the case of an unfortunate event, you won’t have to move or sell your house or underfund your children’s educations due to a loss of income.
The last thing you should keep in mind is getting your Discount! Huge discounts are offered to residents and students before they are out of training, which is something you really should take advantage of.
Discounts can be enormous, ranging from 10% - 40%. These discounts carry over with you when you leave your training program, so you have those discounts for the life of your policy.
While you are in training, you are often in the best health of your life because you are young and have fewer health risks. This would mean a cheaper policy even without your discounts! So the earlier you look into getting a policy the better.
Keeping these five necessities in mind when looking into your disability insurance policy options can make a huge difference in making sure that you can get the best policy for you.
If you need help determining if the policy you are considering is true own-occupation coverage or has any of the other six features, complete a quote request form and set up a time to speak with us so you can review your options with an expert.