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Disability Insurance for Doctors Tips
Estimate What Good Doctor Disability Insurance Coverage Might Cost
Physician disability insurance is a critical component of your doctor’s healthcare package of coverage. Estimating the cost of “good” coverage can be a bit challenging but here is a rule of thumb. If you budget from 1% to 4% of your gross income for the cost of appropriate doctor’s disability insurance, you should be in the right ball park.
The final cost of your temporary disability insurance will be commonly influenced by the following factors:
Using the standard definition of covered disability or the inclusion of an “own-occupation” provision, which provides benefits until you are able to resume the specific duties of your profession and specialty.
The addition of other provisions that may provide additional coverage or lump sum benefits, such as residual disability or presumptive disability coverage.
Adding business overhead expense coverage if you own your practice or are a partner in one.
Your personal medical history. You may enjoy premium pricing or be subject to a “rated” premium based on your personal health record.
Disability insurance for physicians is not inexpensive, but, when it’s needed, the small percentage of gross income you spend on adequate coverage will normally be a very modest price to pay for maintaining your income during periods of disability.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: How An “Own-Occupation” Definition of Disability Insurance Can Help You
Disability insurance can be a wonderful way to protect your income. Just make sure you understand the major provisions of your coverage. One of the most important is the common definition of covered disability situations that allow you to recover some otherwise lost income. Some group doctor disability insurance plans use language that defines disability as your inability to work in any gainful occupation. As a medical professional, this definition could obviously become a problem in certain situations.
There is a way to correct this deficiency. You may have little or no control over the language in group policies, but if you buy your own disability insurance for doctors, you can include an “own-occupation” provision that will have language similar to the following: “The policy will pay the insured benefits if the insured is unable to work in their specialty due to injury or illness.”
Since your occupation/profession is very specific and normally involves an income level above the average worker, this clause in a physician disability insurance plan helps eliminate the possibility that you may be judged to be no longer disabled since you might have the ability to work in any gainful occupation. By including an “own-occupation” provision in your physician’s health care package, you will normally continue to receive benefits until and if you are able to resume the duties of your specific profession.
Refer to your insurance policy contract for specific information regarding your coverages and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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The Difference Between a Group Long Term Disability and an Individual Physician Disability Insurance Policy
There are some important differences between a typical group disability plan and a more comprehensive physician disability insurance policy. The most significant of which are noted below:
Cost. A typical group disability policy is often less expensive than a doctors disability insurance plan. But, remember, you usually get what you pay for so the extra cost may not be an issue.
Definition of disability. This potential difference can be very significant to you. A typical group disability policy considers a person no longer disabled if they can perform the duties of “any gainful occupation.” Individual medical doctors insurance can often include an “own-occupation” provision, which considers the insured to be disabled (and eligible for income benefits) as long as they are unable to resume the duties of their medical specialty.
Taxability of benefits. Benefit income from a group disability policy that is paid for by an employer is normally taxable. Because most group insurance policies provide for a benefit level of around 60% of your gross monthly income, after taxation, your true benefit income will be around 45% or less. A doctor disability insurance program, that you purchase personally, normally provides that your benefit income is tax free. Therefore, even with an identical benefit income level (60%), you will generate 15% to 20% more real income with a physician disability insurance policy.
Portability of insurance. If you leave your group and move to another position, your insurance ceases. By having your own disability insurance for doctors program, you can take your coverage with you wherever you decide to practice.
These are some potentially major differences in the two types of coverage. Consider these differences carefully when you decide how to protect your income in the event of injury or illness.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: Why Good Physician Disability Insurance May Appear to Be Expensive
At first glance, you might believe that physician disability insurance appears to be a bit expensive – particularly when compared with some of the group disability plans of which you might be aware. However, as sometimes occurs with an initial diagnosis of a patient’s problems, all is not necessarily as it first appears. The nature of medical doctors and the invaluable service they perform suggests that doctor disability insurance coverage is adequate to provide appropriate benefits when needed.
A significant factor is the definition of disability in physician disability insurance. For example, most group disability insurance for employers states that one is no longer technically disabled if they can perform “any gainful occupation.” Therefore, unless you have the burning desire to give up your practice of medicine and join the fast food workforce or become a library employee, you should be aware of the disability determination of your coverage.
Disability insurance for physicians should, whenever possible, contain an “own-occupation” provision. This means that you would be considered disabled – and eligible to receive income benefits – until you were able to resume the specific duties of your specialty. There is a cost for this added protection, but most medical doctors should strongly consider having this protection.
You should also be aware that generally acknowledged statistics suggest that, in the case of disability insurance for doctors, there is a significant likelihood of the payout of benefits in the future. Some industry studies have concluded that approximately one of every seven people will suffer a five-year disability before the age of 65. Therefore, premiums must be calculated accordingly.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Where to Find Doctor Disability Insurance Company Financial Ratings
It is important to know that the company from which you purchase your disability insurance for doctors is financially stable to help ensure that they will be there for you should you need them. Learning about the financial condition of the companys' programs you might consider is fairly easy. There are a number of well-respected entities that provide ratings for many insurance companies. A few of the best are:
A.M. Best Company
Standard & Poor
Moody’s Investors Service
Fitch, Inc.
Whether you check these or other services, be sure to understand their rating code system. A company rated “A” by one service may be the highest evaluation given, but if a service company ratings go to “AAA”, an “A” rated company may only be ranked in third, not first, place. While that, by itself is not a “bad” situation, you should always be aware of the ratings definitions so you can make profitable judgments.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: Some Common Physician Disability Insurance Policy Exclusions
Almost all insurance policies of any kind include situations that are excluded from coverage and physician disability insurance coverage is not different in that aspect. Disability insurance for doctors, often different in benefit levels, can often look like other coverages in its exclusions. Here are a few that tend to be common to many plans:
Mental disorders. While often a debilitating condition, this type of disability is often limited in a disability insurance policy.
Acts of war. A common exclusion from many insurance policies.
HIV (Human Immunodeficiency Virus). HIV infection is excluded from the majority of coverages.
Pregnancy. Pregnancy is sometimes not covered in a disability policy; read the proposal and the policy carefully.
Active military duty. A physician called to active duty is a noble and worthy activity, but most disability insurance policies will not cover an injury incurred during active military service.
Foreign travel. An injury or illness contracted while traveling outside of the country is often excluded from coverage in many disability insurance policies.
Other exclusions may be included in your doctor disability insurance policy. Take the time to read all the provisions of your doctor's disability insurance policy so you become familiar with the specific exclusions included in your coverage.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Learn the Different Types of “Disability” as Defined by Doctor Disability Insurance Coverage
Some areas of disability insurance, unlike life insurance for instance, can sometimes appear to be more gray than black or white. Defining disability, then determining whether it is covered or excluded from a doctor disability insurance policy, can vary a bit from insurance company to company. There is some consensus on three major categories of disability that you should know.
Total disability. Physician disability insurance normally pays benefits if you have suffered an injury or sickness that causes you to be unable to perform most material duties of your regular occupation. Total disability can be further classified as temporary or permanent.
Residual disability. Some doctor’s disability insurance coverage allows for this category with varying definitions. Basically this term refers to partial, not total, disability and may be covered in some policies, using a rider or addendum. For example, assume you suffer injury or sickness that does not totally prevent you from generating income, but results in a 20%, 30%, etc. loss in earning ability. If you have purchased this coverage, you may still be eligible for benefit payments to help make up for your loss.
Presumptive disability. Although there are some variations in definition, this provision generally states that, should you lose certain required abilities, you qualify for benefit payments. In general, should you lose your sight, hearing, speech, or two limbs, you may qualify for benefits under this type of disability. The loss of these abilities often need not be permanent, so even a temporary loss may make you eligible for benefits. For instance, assume you suffer an injury that takes away your sight temporarily or you severely break both arms or legs, making you unable to perform any of your duties for some period of time. If you have this coverage, you may be eligible for benefits.
As you consider disability insurance for doctors as part of your physician health care package, learn how your insurer defines disability in your specific policy to avoid any future misunderstandings.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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ProtectYourIncome.com Tip: Learn How a Covered Disability Is Determined for Insurance Purposes
Your insurance company and the stated terms of your physician disability insurance policy define a “covered disability” and those conditions which are excluded from coverage. Medicare disability is attached or linked to the SSDI (Social Security Disability Income) program and follows their guidelines, benefit levels, and definitions.
Claims examiners employed by doctor disability insurance companies normally make the final decision as to covered disability and your eligibility for benefits. They usually consider physician reports, results of medical tests, conditions at the time of the injury or sickness, and any supporting information available. Should an examiner conclude your disability is not covered by the terms and conditions of your policy, you often have the right to provide more information that supports your claim and to request a review.
To avoid future problems, try to learn exactly how your insurance policy defines disability. If you suffer an injury or sickness that might be questionable, or if there may be a question if your injury or sickness has caused you to be unable to perform the duties of your specialty, you should be prepared to present complete information that validates your position.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
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Your Medical History Can Influence Your Ability to Get Disability Insurance for Doctors?
Your medical history may influence your ability to get physician disability insurance. Prior medical issues or lack thereof may also affect the rates you might be charged for doctor’s disability insurance. You may qualify for the lowest available rates or be required to have a “rated” policy, with costs higher than you’d like. However, if you have less than a clean medical history, procuring a rated policy is still better than being deemed uninsurable.
Your practice and income are, over the long term, your most valuable asset. Just as you’d never neglect to insure your home, auto, etc., you should protect an asset even more important than those, with disability insurance for physicians. Regardless of your medical history, you should consider adding some features to your standard doctor disability insurance program.
Residual disability coverage. Should you suffer a partial disability that causes you to lose 20% of your income or more, you may be eligible for benefits.
Non-cancelable and guaranteed renewable. This helps protect your future insurability.
Presumptive disability coverage. The loss of your sight, hearing, speech, or limbs may be covered disabilities, even if these conditions are only temporary.
Waiver of premium. Eliminates the requirement to pay premiums during a covered disability.
Your medical history, if less than perfect, may make these or other available additional provisions take on greater importance. Should you be denied doctor disability insurance coverage by one company does not mean there is no company that will insure you. Check the available sources and use helpful websites like ProtectYourIncome.com to give you more valuable information.
Refer to your insurance policy contract for specific information regarding your coverage and for actual terms, conditions and exclusions. The above statements are general in nature and may or may not reflect the actual terms of your insurance policy.
