Protect your income with this invaluable tool
Get familiar with the different types of insurance. Malpractice, umbrella, homeowners, auto, overhead, key man – it is sometimes dizzying what the number of different insurance policies a typical physician must contend with. One that is often overlooked by many physicians, particularly solo practitioners, is disability insurance.
When I first started my residency, I was married and had a young child. An insurance broker came to give the residents a talk on the importance of disability insurance. Obviously a doctor with a family needs life insurance, but few of us at the time even knew what disability insurance was. And what about elimination periods and own-occupation (known as “own-occ”) policies?
As with many other types of insurance, the younger you are, the cheaper the policy, and the easier it is to obtain. While at first it may seem to be wasted money, never underestimate the importance of protecting your income – you are more likely to be disabled than to die, and few people would argue against life insurance.
Your specialty has an impact on coverage. Some specialties such as anesthesiology are considered at high-risk for disability claims. For that reason it is practically impossible for some physicians to get own-occupation coverage, which is coverage that kicks in if you are unable to do your specific job (such as surgery) but can still work in a different specialty (general medicine, for example).
Maximize your coverage. It is best to get as much coverage as an individual as is allowed by the insurance company. Obviously most physicians will not get a $20 million policy. But it is important to get the maximum individual coverage prior to getting group coverage, which is generally available within a group practice. You may not be allowed to increase your individual policy once you have the group coverage.
Protect yourself in the short term. Most disability policies require a certain amount of time to pass before they are triggered (elimination period). What happens if you are injured for a few months and your policy’s elimination period is 6 months? That could be a rough few months. Short-term disability policies can be useful to bridge this gap. They kick in with a couple of weeks and run until the standard long-term policy begins. Many group insurance plans include a short-term disability policy and as such are very economical.
