Physician Specific Disability Insurance Why Preparing for the Unexpected is One of the Best Financial Decisions You Can Make

Posted on November 24, 2020

In an instant, an illness, accident or injury can derail the career you’ve worked so hard to build. Best case scenario, your ability to treat patients may be put on hold for a few weeks until you recover. Worst case, a life-changing diagnosis means you’re unable to practice medicine indefinitely.

Whether temporary or permanent, when your career comes to a sudden stop, your financial responsibilities keep right on rolling – you still need to provide for your family while also finding a way to pay off your medical school loans.

Securing private disability insurance while you’re in residency is a simple way to protect your financial security in the event of the unexpected. As a financial planner and independent insurance broker, Larson Financial Group can help you navigate the complicated world of own-occupation insurance and find a policy that best fits your budget—today and in the future.

Why disability insurance isn’t a one-size-fits-all solution

When comparing insurance carriers, it’s important for residents to focus on physician-specific, own-occupation options. Own-occupation policies, available from independent insurance providers, protect your personal earning potential if you’re forced to leave the medical career you trained for because of a disability. For instance, if you’re an orthopedic surgeon, and a hand injury suddenly pushes you out of the operating room, the right own-occupation policy ensures you continue to receive income until you retire.

As with any policy, there are different coverage tiers available, and understanding which fits your needs is crucial to your financial health:

  • Two-Year – At the lower end of the spectrum, a two-year policy will pay the income you would earn as a healthcare provider for two years. If your carrier determines you are physically and mentally able to switch to another occupation, they will no longer continue to cover your costs.
  • Not Working – For many physicians, their dedication to patient care doesn’t end because of physical limitations. A “not working” policy actually stifles your ability to use the knowledge and skills you acquired as a medical professional. For instance, if you invent a medical device that brings in income while on leave, your disability insurance payouts will be limited, if not canceled completely. 
  • Double Dip – The policy Larson often recommends as a firm is the “double dip.” This own-occupation option allows you to earn income from other sources if you go on disability, but continues to pay you the same income you would make if you were performing the career you trained for. 

Three factors residents should keep in mind when shopping for insurance

As a resident on a budget, disability insurance is often the last thing you want to think about. However, according to The White Coat Investor, getting disability insurance now is the most important financial decision a resident can make. But there are several important elements to take into consideration.

  1. Don’t limit yourself to your hospital’s group disability offerings. Most healthcare systems will cover the cost of your group disability insurance. However, because it’s employer-paid, any insurance benefits you receive while on disability leave will be taxable. Plus, most group policies are limited to two years. Finding supplemental disability insurance is crucial to ensure your payouts continue up until retirement.
  2. Get your policy while you’re young. As you grow older, new health issues will start to emerge. Even in your thirties and forties, it can be challenging to find an affordable policy – if you can find a carrier who will cover you at all! It’s important to shop for providers when you’re at your youngest and healthiest, and premiums are at their lowest. If you take advantage of a 30 percent discount while in residency, for instance, instead of waiting one year until you’re practicing, you can earn $218,000 more over the course of your career if you become disabled.
  3. Work with an independent broker. When you go directly to an insurance carrier, you’re limited to the policies they offer. In many cases, they may not provide the coverage you need, especially since policies are gender- and state-specific. An independent insurance broker like Larson can compare policies across numerous providers to find available discounts that best fit your budget.

Partner with Larson Financial Group for disability insurance

Larson’s independent insurance brokers are dedicated to finding residents their perfect match when it comes to disability insurance. By making a small financial sacrifice now, you can protect your future earning potential and your family’s financial security no matter what health crisis comes your way. To learn more about your options, contact Larson Financial Group at 314-787-7399. 

Advisory Services provided by Larson Financial Group LLC, a Registered Investment Adviser.

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