blownlight.com

By Jamie Fleischner

Your income as a Physician. It is the lifeblood of your finances. Could you survive without it? Many people who have lost their jobs recently would attest that their income is hard to live without. But what if you are gainfully employed? Would you be able to survive if you became sick or injured and couldn’t work?

To take care of our important assets that we couldn’t live without, we leverage our risk with insurance. This includes homeowners insurance, auto insurance, and even life insurance.

However, have you considered covering your most valuable asset-your income? Imagine surviving without your income. How would you survive? Do you have enough money in savings to cover you if you couldn’t work for 6 months? What about 2 years? Or longer?! Most Doctors overlook protecting their income. However, most people could not survive without it.

Chances of becoming disabled as a doctor are actually pretty steep. Between ages 30 and 65, a third of those in the medical field will become disabled. Yet most people don’t take care of this need. It’s much more likely to happen than a flood or fire to your home and the ramifications are much greater.

Doctor disability insurance is designed to pay you a monthly benefit if you become sick or injured and can’t work. A personal policy is non taxable (if paid with after tax dollars) and typically kicks in after a waiting period of 90 days or longer. You may choose a benefit period of 5 years, age 65 and lifetime. The longer the period, the more expensive the policy.

There are various types of definitions and policy provisions. These include definition of disability (try to purchase a policy that covers you if you couldn’t work any longer as a doctor), partial disability, inflation riders, and the ability to purchase more in the future without further medical underwriting.

It is important to work with an expert that can help guide you through the process and find the most suitable policy for your needs. The underwriting process requires a look at your previous medical history and a paramedical exam (blood and urine test). Look for an independent broker that works with multiple companies instead of an agent that will only show you one company that may or may not be the best fit for you.

Premiums for doctor disability insurance will vary based on gender, age, occupation, geographic location and policy definitions and riders. Rates are 30-40% higher for women than men based on risk. However, there are ways to create discounts if more than 3 people from the same employer apply. Plan on spending approximately 1-3% of your gross income to protect 60-75% of your take home pay.

As a physician, it is critical that you choose a definition of disability that covers you in your medical specialty. This means if you become too sick or injured to work in your medical specialty, you can still work in another medical specialty or occupation and continue to receive benefits.

When you purchase a policy, each company classifies your medical specialty into an occupational class to determine rates. The higher risk specialties, such as surgery, are in a separate (typically more expensive class) than less risky specialties such as general pediatrics. It is important to note that the policy is based on the occupational class at the time of application, but will base the claim on your occupation at the time of claim.

About the Author: Jamie K. Fleischner, CLU, ChFC, LUTCF is it the President of Set for Life Insurance by KF Financial, Inc. We provide Doctor Disability Insurance, life insurance, and general disability insurance to white collar professionals around the country.

Source: isnare.com

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