June 3, 2021

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:

  1. Musculoskeletal disorders affecting the back and spine, knees, hips, shoulders, and other parts of the body (29%)
  2. Cancer (15%)
  3. Pregnancy (9.4%)
  4. Mental health issues including depression and anxiety (9.1%)
  5. 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:

  • 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, 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.

How To Get A Disability Insurance Policy

Step 1: Find an agent

The first step to finding the right physician disability insurance policy is finding a licensed insurance agent. Working with a licensed agent helps the underwriting process move along more quickly, as they can act as a liaison between you and the company and answer any important questions. They will communicate with the insurance company to make sure you’re getting the correct rates and be able to negotiate around any potential exclusions to your policy.

There are two types of disability insurance agents to choose from – independent and captive agents. While independent agents are usually contracted with several insurers, captive agents work with one insurance company. Working with an independent agent gives you the ability to compare policy rates across multiple companies to ensure you’re getting the best offer. 

Before enlisting the services of an independent agent, do some research to avoid wasting your time and money. Seek referrals from people you trust, your medical association, and set up an initial conversation with the agent to talk about your needs. 

Step 2: The application

After comparing quotes with your agent, the next thing to do is to kick-start the application process. Most applications can be completed online, but paper options are also available for those who prefer. The application form gathers your contact, demographic, and employment information. After completing the form, your agent will review it with you, then submit it to the insurance company.

You will attach some supporting documents like your proof of income or employment. Some insurance companies request driving records and medical records. You may have to fill out a record release form, but the insurance company will cover all and any costs associated with requesting those records. 

Step 3: The interview and exam

Most insurance companies require an interview to go over your medical history. This interview generally takes place over the phone, but some carriers have started doing an online questionnaire.

Depending on your age and benefits applied for, the insurance company can request a mini-medical exam to assess your health. During the exam, a nurse will check your height, weight, vitals, and take a blood and urine sample. This exam is also paid for by the insurance company, and can be completed at your home or place of work. The process should not take more than 45 minutes.

Step 4: The underwriting

The insurance company will review your application, records, interview and exam results, and financial information to underwrite your case. The underwriter’s goal is to assess your risk of filing a claim, so they will be the ones deciding if your application is approved or if any exclusions apply. Your insurance agent will keep you updated about any questions the underwriters may have or any outstanding requirements.

Step 5: The offer

After determining your risk, you’ll receive your disability insurance policy offer. You and your agent should review the offer together to go over your proposed benefits and any changes from your quoted offer.

Once you accept the offer, the company will issue your policy, you’ll sign the delivery receipts and pay your first premium, then your policy is active! The timing of the process varies, but averages around 4 – 6 weeks.

From here, you’ll continue paying your insurance premiums on the agreed upon schedule with peace of mind that you and your family are protected in the event of an illness or injury.

Disability Insurance Awareness Month

Each May is designated as Disability Insurance Awareness Month (DIAM). DIAM is championed to raise awareness about the benefits of income protection. Like we earlier mentioned, without disability insurance, an illness, injury, or a chronic condition could result in financial hardship. Even a temporary illness can push you towards debt or harm the nest-egg you’ve built for yourself, so protecting your income is important.

If you are ready to talk about disability insurance with a reputable agent, we’ve got you covered. As Disability Insurance Awareness Month wraps up, learn more about the policies that are available to you. We offer own-occupation policies with discounts up to 20%, exclusive to physicians. Get your quote today, or reach out for questions or a no-cost review of your current policy.