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Medical professionals — doctors in all fields, including dentists and oral surgeons — spend more than four years in school, and five or more additional years in a low-paying residency. Protecting that investment can mean protecting your standard of living and ability to carry on in the face of a debilitating illness or injury.
Why disability insurance is worth it for physicians
Disability insurance is a smart choice for today’s workforce, regardless of profession. But medical professionals may especially benefit from it.
The Social Security Administration released a fact sheet indicating that roughly 25% of 20 year olds will likely face disability before turning 67. With the amount of time, money and effort that goes into becoming a medical professional, it’s important to make sure your livelihood is secure in the event that you’re unable to continue in your field.
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What type of disability insurance is right for me?
Group and individual disability insurance offers short term and long term disability insurance. Depending on where you are in your career, it may be wise for you to carry one or both types.
- Group disability insurance for physicians
Also known as employer-sponsored insurance, group disability insurance is offered by many employers to its full-time employees. For those working directly with one hospital, this may be a good option for both short and long term disability coverage.
Keep in mind that group disability policies are dependent on you working for the employer you have the plan with. If you leave the hospital or practice you’re with, you won’t be able to keep your policy, unless it has a portability or conversion option.
- Individual disability insurance for physicians
While it’s typically more expensive than a group policy, individual disability insurance may be more reliable in terms of keeping your coverage. Individual policies are underwritten, meaning you have to qualify for them, and can keep coverage as long as you pay your premiums.
If you have your own practice, or you’re working with several hospitals as an individual contractor, you may find that an individual plan is more sensible for long and short term disability coverage. You may also be able to hold individual and group coverage.
- Short term disability insurance for physicians
You could benefit from having short term disability insurance if you have an accident, injury or illness that keeps you from working for up to 180 days, in rare cases even longer. You’ll have to be considered unable to work for a specified amount of time required by your elimination period — also known as the qualifying period — before you begin to receive benefits.
This can range from a week to 90 days, depending on what you choose when purchasing your policy. After you satisfy your elimination period, you’ll receive benefits up to the maximum benefit period.
Depending on your policy, some insurers only require you to be partially disabled during your qualifying period. Medical professionals may find this especially helpful when starting out, as it gives you a way to cover debts and other bills when you have to miss work and don’t have the savings to cover your time away.
- Long term disability insurance for physicians
Similar to short term disability, long term disability begins to pay out after you meet your elimination period requirements. Policies vary, but you may be able to receive benefits between two years up to retirement age depending on your policy and disability. The amount you receive is based on a predetermined percentage of your salary stated in your policy.
This income replacement protection is especially valuable for physicians because work is physically intensive and sometimes requires delicate procedures. By having long term disability, you can potentially maintain your standard of living, even if you’re unable to continue in the career you’ve built your life around.
What is an own-occupation policy?
One term you’ll see a lot when looking into insurance for medical professionals is own-occupation policy. This type of policy allows you to collect disability insurance even if you can still get a job outside of the field you trained for. In other words, you don’t have to be considered 100% disabled to benefit from it.
Physicians may find this type of disability policy useful because it replaces lost income that would be difficult to make in another profession while still allowing you to work outside of your original occupation.
How much does disability insurance cost for physicians?
The cost of disability insurance will vary greatly based on where you are in life. Your age, salary, elimination period, additions to the policy called riders and how your work is classified all impact what you’ll pay. As will factors like your gender, overall health and lifestyle.
According to Medscape as of October 2019, 2% to 5% of your gross income is the expected cost of long term disability insurance if you’re just starting out as a physician. Short term disability premiums are typically less.
Being a medical professional can mean fully committing to your occupation, which makes replacing income lost by a disability difficult without protection in place. Before you get coverage, learn more about disability insurance and how to compare providers so you can get the best policy for your situation.
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