What's your most valuable asset? (Hint: It's not a house.)
Your income is your most valuable asset. Without it, how would you take care of your home, provide for your family, or retire in the future?
Disability Income Protection
Disability Income Protection, or disability insurance, is a critical component of a physician’s financial plan. Simply, disability insurance will replace your current and future earnings if you lose the ability to practice.
Following are the definitions that most physicians will need to understand, in order to make an informed and educated decision regarding appropriate disability protection:
Own Occupation (Specialty Specific) Wording:
- The own occupation (Own Occ./Own Specialty) period is the length of time that you will be eligible to receive FULL benefits under your contract, as long as you can not practice in your Medical specialty. Be aware that there are less comprehensive variations of own occupation.
Residual Disability
- This is as important as own occupation. Imagine you suffer an injury that keeps you out of practice for 8 months. If your burning desire is to get back in to your specialty as soon as possible, you need to understand your residual definition more than your own occupation definition. The residual clause will determine how much you receive and for how long, when you go back to work in your own occupation.
Guaranteed Purchase option
- An option to purchase gives you the right to increase your benefits in the future when you qualify financially. It ensures that any future change in your heath status will not affect your insurability.
Cost of Living
- Most individual contracts should have a cost of living (COLA) feature. This increases your benefit every year that you remain disabled, protecting your income from the rising cost of inflation over time. Given the state of our economy, this is very important.
Market Awareness & Strategic Opportunity
The disability market is currently very competitive with five insurance companies offering true own occupation / specialty specific contracts for physicians, in most states.
If you are in your final year of residency or fellowship, make sure you start to evaluate disability protection prior to signing a contract. Within the last six months of your training it is now possible to get up to $7,500 of tax free benefit!
Educational Resources
To better understand key contract provisions, underwriting requirements, and the value of disability insurance, refer to our Ressources section for a growing library of practical materials.