Everything You Need to Know About Physician Disability Insurance

What would you do if, all of a sudden, you became so ill or injured that you couldn’t work and earn income?

As a physician earning a high income, you probably have some liquid assets, some investments, and some savings in the bank. But will you be able to sustain your lifestyle if you can’t earn any income going forward?

With disability insurance, you can.

Here’s everything you need to know about physician disability insurance, including what it costs, how to get it, and why you need it.

What is Disability Insurance?

Disability insurance is not health insurance or supplemental medical insurance. It’s actually income protection insurance.

A disability insurance policy is a way to guarantee that you can earn income, even if you’re too ill or injured to go to work and earn your normal paycheck.

You can use the benefits from a disability insurance policy to pay for anything, including the cost of medical bills, your mortgage, utilities, car insurance, and other monthly expenses.

You can also use your benefits to contribute to retirement savings plans and continue to build wealth for your future. Disability insurance coverage provides you with both freedom and financial protection, and every physician should have it.

How Much Does Disability Insurance Cost?

There is no standard price for a disability insurance policy, but most physicians spend between 1% and 3% of their annual salary on monthly premiums.

There are a variety of factors that determine the price of disability insurance:

• Age

• Gender

• Occupation

• Location

• Coverage amount

• Optional riders

• Benefit period

• Waiting period

• Definition of disability

Riders are additional coverage options that provide added benefits, and every one you add to your policy will increase the price of your premium. They are optional, so you can decide which ones to add and which ones to opt out of.

The benefit period refers to the length of time that you can collect benefits. The longer the benefit period, the higher your premium will be.

The waiting period refers to the time frame between the date of your injury and the date that you can start collecting benefits. The shorter the benefit period, the higher your premium will be.

The benefit period and waiting period are crucial elements as to when and for how long you can collect your benefits. But before you can collect a single cent, you’ll need to meet the definition of disability as stated in your policy.

Protect Yourself With the Own-Occupation Definition of Disability

In order to be eligible to receive disability insurance benefits, you have to meet the definition of disability as stated in your policy. The two most common definitions are:

• Any-occupation

• Own-occupation

With an “any occupation” definition you have to be disabled so severely that you cannot work in any occupation. With the “own-occupation” you can collect benefits as long as you suffer a small injury that prevents you from doing your current job.

For example, a surgeon with nerve damage in one hand could collect benefits under an own-occupation policy, as that hand injury would prevent you from performing surgery safely. Yet under an any-occupation policy, that surgeon would be rendered ineligible for benefits.

Why?

Because that never damage wouldn’t prevent you from working as a teacher, an administrator, or a fast food worker serving up French fries.

The higher your annual income the more future income you have to lose, and the more important it is to select the own-occupation definition of disability.

How to Get Disability Insurance

You can get disability insurance through almost any insurance company, but there are only six that offer the true own-occupation definition of disability.

To obtain a quote, you can contact your local insurance agent to provide you with multiple quotes from different insurance providers. You can also contact insurance companies directly for individual quotes.

Before you choose any insurance policy, do your homework and compare quotes and policies to make sure you’re getting the most bang for your buck.

No matter what riders, benefit period, or waiting period you choose, be sure to choose the own-occupation definition of disability. Without it, there’s a good chance that you’ll never become eligible to collect your benefits at all.

Here’s an in-depth guide to the Big Six insurance companies that offer disability insurance with the own-occupation definition.

The more you make each year, the more important it is to protect the income you haven’t earned yet. Disability insurance guarantees future income, protect your assets, and provides your family with financial security. Without it, your current financial security and future plans for retirement are both at risk.

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