Over the course of helping thousands of physicians evaluate their options for disability insurance, these are the the seven questions we get the most often.
When do the payments start and how long do they last in the event of a claim?
The elimination period is the length of time you must be continuously disabled before your policy benefits begin to pay. Elimination periods for short term disability policies are typically under 14 days after injury, whereas long term disability can range from 30 days to 1 year. The most common is 90 days for long term disability.
There is short-term (3 months, 6 months, 1 year) and long-term (10 years, to age 65 or even 70) disability income insurance. Therefore, how long the payments last is based on the type of policy you choose.
What type of coverage can I get with disability insurance?
There are a few options for how much coverage one can get with disability income insurance and this is based on the carrier and your individual circumstance. Each carrier has their own parameters and offers different types of conditions for a disability income insurance policy. Three common conditions for a disability insurance policy to pay benefits are:
- True own occupation – you are unable to perform the duties of your specific occupation
- Modified own occupation – you cannot do substantial duties in your current occupation and you choose to work in another occupation; benefits will be adjusted according to the supplemental income
- Any occupation – you are unable to complete substantial duties of any occupation from which you have training or skills
True own occupation is the most common for physicians, definitely with specialists, and the most valuable as it covers you if you are unable to perform your customary duties even if you receive any income doing something else.
Different specialties are grouped by the risks they pose for the insurance company. Some specialties pose more of a risk; therefore, they will receive higher rates. For instance, Neurosurgeons will likely have a more expensive rate than a Hematologist. This is based on past claim history in the specialty and risk of the physician becoming fully disabled and unable to perform his/her specific duties.
Note: your inability to work must be a result of sickness or injury
Should I buy insurance in Residency versus as a practicing Physician?
The earlier, the better. Factors such as age, health, gender, and family health history play a major role in determining how much coverage you will receive. Age can increase pricing by around 2.5% per year that we age, therefore starting a policy while you are young and in the best shape of your life is best practice.
Securing premium rate discounts in residency versus waiting allows you to lock in a discount that may not be available after residency.
Is it portable and can I purchase more as my income increases?
Yes, the policies we offer are non-cancellable so once you purchase you can take your plan with you no matter where you work.
We highly recommend making sure your policy contains the future purchase option, which allows you to buy more coverage without having to qualify medically. This means the company cannot exclude conditions or decline additional coverage, even if developed after purchasing your original policy. Many of the strategies we build allow you to add $25k or more of monthly benefit as your income increases.
What are the most important riders* for disability income for a Resident/Fellow?
True Own Occupation – With many carriers true own occupation coverage is available either built in to the base contract or as an optional rider. This rider/provision, which adds to the cost, covers you if you are disabled from your regular occupation, whether you work in another occupation or not. The benefit is not reduced by the income you earn. This is the most favorable coverage as many physicians would like to work in some capacity, even if it is another field such as education or consulting.
Partial Disability Benefit – Some companies offer this benefit as a rider. It serves to cover you if you become partially disabled, but not fully disabled. Without this rider, you must be fully unable to perform your customary duties to receive any coverage or benefits.
Future Purchase Option/Benefit Update – This feature allows you to increase the amount of coverage based on financial eligibility without needing any additional medical records or screening. This can be important to resident physicians and fellows who expect an income increase in the future.
Cost of Living – This rider increases the benefit amount each year to help offset inflation rates in the event of a disability lasting longer than 12 months. This rider is particularly important for young doctors because it protects against any market inflation and offer more coverage in older age due to the power of the dollar.
Student Loan Rider – Many companies offer a rider that will cover a portion of your student loan debt while you are totally disabled.
*Riders are optional and are typically offered at an additional cost. The availability of riders and the terms of coverage vary by insurance carrier.
As a resident/fellow, it is vital to protect yourself against future financial and physical risks. Your ability to generate income depends on your specialized skills. Individual disability income insurance allows you to protect your assets and yourself as your grow in your field. It is advised to strike while
the iron is hot and get a policy in-force while you are young and in good health to secure the best rates. Furthermore, individual discounts are available through carriers like MassMutual that may not be applicable after residency.
Taking advantage of these benefits can set you up for the best possible policy. For direct information on individual disability income insurance, give Whit Ferguson a call at 770-551-3441 or email at firstname.lastname@example.org
*Policies may have exclusions and limitations