Disability Insurance for Physicians
Why you need disability insurance
If you’re browsing this site, it’s likely that you already know why you need disability insurance – to protect your income – but few people really understand the magnitude of that statement.
According to the Bureau of Labor Statistics, the median pay for a physician in 2017 was $208,000. If you’re 35 years old and never earn more than the median income, that’s $6,240,000 in income that you’ll earn between now and age 65. It’s more than just the money, however.
Some specialties require four years of undergraduate study, four years of medical school leading to a Doctor of Medicine (M.D.) degree, and three to eight years of surgical residency at a hospital. That’s up to 16 years of training before you’re even able to earn that $200,000+ income.
What other asset that demands over a dozen years of commitment to training and will provide you with over $6,000,000 would you consider not insuring? Because of the high incomes and highly specialized training required, physicians require quality disability insurance more than any other occupation.
Features to include in your coverage
These are the most popular features we see when designing coverage for physicians:
- Enhanced True Own Occupation – This is perhaps the most important aspect of the coverage. Under this definition of disability, you will be considered totally disabled if due to sickness or injury you're unable to do the material and substantial duties of your own occupation, even if you’re engaged in another occupation. Furthermore, you’re also considered totally disabled if more than 50% of your income is from hands on patient care and you can no longer perform hands on patient care due to illness or injury, or 50% of your income is from performing surgical procedures and you can no longer perform surgical procedures because of illness or injury. This is the best definition of disability a physician can get.
- Enhanced Partial – This optional rider provides benefits when you are disabled and suffer a 15% loss of income. Unlike many policies that don’t provide for enhanced partial disability benefits, this feature allows you to work in your occupation full time, doing everything you were before, so long as you suffer a loss of income due to illness or injury of at least 15%. This is sometimes known as a recovery benefit, as it allows you to return to work full time once you’ve recovered medically from your total disability, even though you may still be rebuilding your practice financially.
- Future Increase Options (FIO) – Allows you to buy additional disability insurance as your income increases without getting medically underwritten again. Great for residents or new physicians who expect their income to grow rapidly over time.
- Cost of Living Adjustment (COLA) – Especially important for younger insureds who may have 20 or more years of possible claims. This feature ensures that your benefits increase to keep pace with inflation in the event you are totally disabled.
- Student Loan Protection – Since many new physicians have student loans, it’s important to make sure that these are taken care of in the event you become disabled. You can select an amount of benefit up to $2,500 per month to go towards paying back your student loans.
- Retirement Protection – Most physicians not only earn a good income, but they also save a lot for retirement. In the event of a disability, both of these things stop. If you just bought a disability insurance policy, but didn’t protect your savings for retirement, it’s possible that if you were disabled, your lifestyle would take a turn for the worse at age 65 after your last disability benefit check. A disability retirement protection rider will ensure that your retirement savings continue uninterrupted in the event you are totally disabled and can’t continue to save for life after age 65.
Having worked with thousands of physician clients, we understand that many like to have similar features and benefits in their policies. Over the past 18 years, we’ve compiled a database of all our physician clients’ coverage. This allows us to show you what the average physician in your age and income bracket has purchased, thus allowing you to make sure you’re getting the best options on your policy.
Individual disability insurance policy Forms 18ID, 18UD, and 18GI underwritten and issued by Berkshire Life Insurance
Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and availability may vary by state. In New York: These policies provide disability insurance only. They do not provide basic hospital, basic medical or major medical insurance as defined by the New York State Insurance Department. For policy form 18ID, the expected benefit ratio is 50%. For policy forms 18UD, 18GI, 18UD-F, an 18GIF, the expected benefit ratio is 60%. The expected benefit ratio is the portion of future premiums that the company expects to return as benefits, when averaged over all people with these policy forms Optional riders are available for an additional premium.
2018-63951 Exp 08/2020