5 minute read
5 minute read
Insurance seems simple enough. You pay premiums in exchange for the insurer’s promise to compensate you in the event of a covered loss. It’s pretty easy to assume that all insurance products are essentially alike and fairly straightforward.
When it comes to physician own-occupation disability insurance, however, things are no longer so simple. Physician own-occupation disability insurance is unique and works in a way that no other product in the insurance marketplace does. Here we’ll lay out the ways in which physician disability insurance is unique, and what you should look for if you’re considering obtaining a policy. This is especially important to consider now, as insurance companies often change their policies at the beginning of a new year—and these changes are rarely beneficial to physicians seeking own-occupation disability insurance.
What is physician disability insurance?
Disability insurance insures a worker in case of an injury or illness that prevents them from working. This insurance offers income protection by paying a monthly benefit to individuals who become disabled and cannot work during that time.
The main feature that you should be looking for when it comes to disability insurance is the “own occupation” label. This is compared to “any occupation,” where you do receive benefits only if you are unable to work in any job that is reasonably suitable for you based on education and experience. Own occupation disability is preferable, because it’s more likely to pay you a benefit if you become disabled through injury or illness.
The difficult thing is that not all policies define “own occupation” in the same way. When looking for a disability insurance policy, look for one that is “true own occupation.” This type of policy ensures that if you can’t work in your own occupation (speciality) the benefit is paid, even if you choose to work elsewhere.
Why do you need disability insurance, anyway?
Disability insurance is especially important for you if you are just finishing your training or are early in your attending career. At that point your most valuable assets are your education and your ability to earn a future income, which reflects an enormous investment of time, cost of education, and postponed income due to years spent in training.
Anything from a back injury, vision loss, or a hand injury will threaten those assets that you built through years of difficult work in training. You may also have liabilities in the form of student loan debt. If you are injured and can’t work, and even if you declare bankruptcy, your student loans are not discharged.
Statistics show that physicians have a 30% chance of missing out on income because of an unexpected sickness or disability-causing injury in their careers. Physician disability insurance guards you against this risk, and for that reason is highly recommended.
Why do training program discounts set physician disability insurance apart?
Residents and fellows have the opportunity to use available training program discounts to get disability insurance at lower rates than at any other point as long as disability insurance is requested before graduation.
If you purchase disability insurance while you are still a resident or fellow, your policy will stack on top of whatever group coverage you receive from your eventual employer. This feature not only makes physician disability insurance unique, but it makes residency or fellowship the best time to buy it.
The thinking behind this feature is to give physicians a valuable benefit at a time when they are most financially vulnerable. If you are like many physicians, you will complete your residency or fellowship with a significant amount of debt, which you acquired in pursuit of your medical degree. While the income returns that doctors typically make will likely enable you to pay off your loans quickly, in the waning months of your residency or fellowship you are in a somewhat vulnerable position financially.
Residents and fellows typically earn the lowest level of income that they ever will in the course of their professional careers and are saddled with the highest level of debt. This is why it is an ideal time to get disability insurance to ensure that you are protected from financial loss in case of injury.
You will still be able to purchase disability insurance after you complete your training but the insurance company underwriting your policy will look at your income and offer only what you are eligible for after accounting for your group disability insurance coverage. This practice often results in less coverage for practicing physicians.
What's the best way to get own-occupation disability insurance?
If you've decided to protect your future earnings from illness or injury, the best way to get physician own-occupation disability insurance is by working with an independent agent who can get you policies from the companies that still offer true own-occupation coverage. By working with an independent agent, you won't have to shop around—someone else will do it for you. The agent will explain the policies in detail so that you know what you're getting, and as they don't work for the insurance companies they will be able to offer an unbiased professional opinion on the best policy for you.
If you're interested in disability insurance, it would be a good idea to check out policies now, in the case of changes at the beginning of the new year.
If you'd like more information, click below to download our free guide to disability insurance written specifically for physicians!