For anyone who earns an income and desires financial wellness, disability insurance is vital. For physicians, disability insurance is also a must-have. As a physician, it can be time-consuming, overwhelming, and confusing to find the right disability insurance policy for your situation.

In this post, you will learn the basics of disability insurance, why it’s so important for physicians, what to look for, and how to get your own physician disability insurance policy. This post will help guide you towards getting the right disability insurance policy with confidence.

But before we go deeper, let’s quickly run through the meaning of disability insurance and how it applies to physicians to bring newer doctors up to speed.

Sounds good, right? Let’s get started.

Why Do Physicians Need Disability Insurance?

Disability insurance is an insurance policy that pays you an income when you are not able to perform your occupational duties in the event of an injury or illness.

The Social Security Administration has asserted that more than 25% of today’s American 20-year old’s will become disabled before age 67, and accidents and illnesses can happen to anybody. As a physician, ask yourself the following questions:

What happens if you are unable to perform your medical duties?
What does your income pay for and who relies on it?
How would the loss of your income affect your lifestyle?

Dentists, surgeons, and other doctors aren’t immune to illness or injury, and disability insurance protects your ability to earn an income. Many disabling situations are not covered by worker’s compensation and Social Security Disability Insurance (SSDI) benefits are substantially less than an individual policy. These types of benefits would not cater to a physician’s income needs and lifestyle.

Many physicians are offered a group disability insurance policy through their employer. Group policies are a great start, but benefits are often limited, usually taxed, and don’t cover enough income to cover your monthly expenses. Group policies often aren’t transferable, so you lose your benefits if you change employers. An individual policy provides higher benefit amounts that stay with you through job changes, and additional riders that protect more of your hard-earned income.

An illness or bad accident could result in significant financial hardship. If your ability to work is taken away, the right disability insurance policy can replace some of your lost income.

What Does It Cover?

Disability insurance can pay for things like your mortgage, rent, car payment, groceries, student loans, or anything else while you’re out of work. It helps you maintain your lifestyle when you are not getting a paycheck.

According to the Council for Disability Awareness, the most common long-term disability insurance claims are for:

Musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body (29%)
Cancer (15%)
Pregnancy (9.4%)
Mental health issues including depression and anxiety (9.1%)
Injuries such as fractures, sprains, and strains of muscles and ligaments (9%)

As you can see, oftentimes it isn’t a tragic accident that stops someone from working. Even the most careful doctors could lose their ability to earn an income due to an underlying condition.

So, what does a disability insurance policy for doctors look like? Generally, a physician’s disability insurance policies should feature:

A true own-occupation definition, you get your money even if working in another specialty
High monthly benefits, up to 60-70% of your income so you don’t have to change your lifestyle if you can’t work
Portable benefits, the coverage that goes with you if you change employers

Other common features can include options for partial or total disability, flexible waiting periods, coverage up to age 70, and lump sum benefits.

How Much Does Physician Disability Insurance Cost?

Physicians should expect to pay between 1% and 5% of their gross income on an individual disability insurance policy. Policy premiums increase as you age, so getting a policy when you are young or in residency is good practice to lock in those lower premiums.

Some other items that affect disability insurance cost are:

Riders: Additional benefits can be added to an insurance policy, like a Future Increase Option, Cost of Living Adjustment, or Student Loan Rider.
Gender: Women generally pay slightly more than men, due to the higher chance of going on claim and longer life expectancy.
Specialty: Every medical specialty is coded into an “occupation class” that has its own premium rate based on risk level.

BUSINESS OVERHEAD EXPENSE DISABILITY POLICY FOR PHYSICIANS
If you are a sole practitioner, it would be important to explore how a business overhead expense insurance policy can work to protect your practice in the event you are disabled. Business overhead expense insurance helps cover the business expenses necessary to keep your practice open while you are disabled. Without it, many sole practitioners wouldn’t have a practice to return to should their disability keep them from generating revenue for any length of time