April 4, 2008, Newsletter Issue #8: Estimate What Good Doctor Disability Insurance Coverage Might Cost

Tip of the Week

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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