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Disability insurance for physicians
A policy can protect the investment you've made in your career — and your standard of living.
Medical professionals spend more than four years in school, and five or more additional years in residency. That’s a huge investment of time and money, and a disability insurance policy can protect the paycheck you worked so hard to earn in case you suffer an injury or illness and can’t work.
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. 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.
A disability insurance policy can replace a portion of your paycheck if you become disabled and can’t work for a period of time.
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What type of disability insurance is right for me?
There are two main ways to get disability insurance: through your employer, or on your own. Depending on where you are in your career, it may be wise for you to carry both short-term and long-term coverage.
Group disability insurance for physicians
Also known as employer-sponsored insurance, group disability insurance is offered by many employers as part of a benefits package. If you work with one clinic or hospital, this may be a good option for you. Plus, the premiums are subsidized, so you won’t pay as much for 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 on a case by case basis, meaning you have to qualify for it, 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.
There are two types of disability insurance to choose from:
- Short-term disability insurance. 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, and in rare cases up to a year. You’ll have to be considered unable to work for a specified amount of time required by your elimination 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.
- Long-term disability insurance. These policies pay out for longer, and usually have longer waiting periods to match. Depending on your policy and the severity of your disability, you may be able to collect benefits for somewhere between two years up to retirement age. 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 depends on a range of factors, like your age, gender, health, lifestyle, and salary. The benefit and elimination period you choose, as well as any riders you add to your policy, also come into play.
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.
As a medical professional, you’re likely bringing in a paycheck that reflects the time, money and commitment you’ve put in to your profession. A disability insurance policy can protect that paycheck in case you get ill or injured and can’t work in the medical field.
If you’re ready to purchase income protection, compare disability insurance companies so you can get the best policy for where you’re at in your career.
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