There is a lot of confusion among physicians about what makes a disability insurance policy truly good for physicians. This is often the fault of untrained financial advisers or deceptive insurance companies.
Here we’ve consolidated our list of the most important things to look for in a disability insurance policy so you can be successful at obtaining the best coverage that fits you as a physician.
1. Specialty-specific coverage: This kind of coverage will pay you the full benefit amount if you are disabled and unable to perform the duties of your specialty, even if you can still work in medicine or any other occupation. Correct classification of your specialty is extremely important in determining the premium rate that the insurance company will charge. Different insurance companies may even assign specialties to different classes, with the result that premiums rates may vary widely across companies. Independent insurance agents that specialize in disability insurance will be able to help you find the company that assigns that most favorable class to your medical specialty, which results in you paying lower premiums.
2. High guaranteed increase limit: When you are in training, you are eligible for much less coverage than you will be as an attending. However, you can “lock in” the guaranteed right to increase your policy in the future without any more physicals or labs. Since physicians’ incomes increase substantially once they leave training and throughout their careers, it’s important to make sure that the cap or maximum is high enough to allow you to protect a large percentage of your income without a health checkup in the future.
3. Partial/residual disability riders: More physicians are partially disabled each year than totally disabled. This means that they are prevented from earning their previous full income, but they are still practicing in their specialty. A good partial benefit rider, sometimes called a residual benefit rider, is key to making sure doctors will have any partial loss in income replaced if this much more likely scenario occurs.
4. Non-cancelable and guaranteed renewable: A policy that is both non-cancelable and guaranteed renewable means that premiums can’t be raised nor can the contract be changed. It’s important to make sure that this language is in the disability insurance policy; otherwise, the insurance company has the right to change your premium rates.
5. Quality companies: Don’t waste your time working with companies that are not financially stable or that have bad reputations of an overly difficult claims departments. Especially in the case of injury or illness, you do not want to spend the time putting up with the hassles of a failing company nor an obstinate claims department if you need to file a claim.
6. Discounts: Almost all physicians are eligible for discounted rates on their policies. Since they typically have larger policies due to their larger incomes, it’s important to get the best price possible. Discounts can save a you tens of thousands of dollars over the course of your career.
If you have questions, make sure to talk to an independent adviser who can help find the best policy for you, as opposed to an insurance company representative.