Insurance and Risk Management | Practice Management

Physician-Specific Disability Insurance

Posted on November 24, 2020

Preparing for the Unexpected is One of the Best Financial Decisions You Can Make

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

Whether temporary or permanent, when your career stops suddenly, your financial responsibilities keep right on rolling. You still need to provide for your family while paying off your medical school debt.

Securing disability insurance while you’re in residency is a simple way to protect your financial security in the event of the unexpected. Larson’s expert financial advisors can help you navigate the complicated world of own-occupation insurance and find a policy that best fits your budget—both for today and in the future.

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. These types of policies protect your personal earning potential if you’re forced to leave your medical career. For instance, if you’re an orthopedic surgeon, and a hand injury suddenly pushes you out of the operating room, the correct own-occupation policy ensures you continue to receive income until you retire.

As with any policy, there are different coverage tiers available with disability insurance for physicians. Understanding what coverage you need 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 can actually stifle your ability to use the knowledge and skills you acquired as a medical professional. For instance, if you invent a medical device that earns income while you’re on leave, your disability insurance payouts may be limited, if not canceled completely. 
  • Double Dip: The policy we often recommend 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. 
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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, getting disability insurance is the most important financial decision a resident can make. Right now, you are the youngest you will ever be again, and probably the healthiest. 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, you can earn $218,000 more over the course of your career if you become disabled.
  3. Work with an independent broker. Insurance companies can only sell you their own insurance products. In many cases, they may not provide the coverage you need, especially since policies are gender- and state-specific. Independent insurance brokers, like Larson, can compare policies across numerous providers to find the best fit for you.
Talk with a Larson advisor for your disability insurance options

We are dedicated to finding the perfect match for our clients when it comes to disability insurance for physicians. By making a small financial investment now, you can protect your future earning potential. This helps protect your family’s financial security, no matter what health crisis may come your way.

To learn more about your options, call us today at (866) 569-2450, or click the Schedule a Consult button.

Advisory Services offered through Larson Financial Group, LLC, a Registered Investment Advisor. Securities offered through Larson Financial Securities, LLC, Member FINRA/SIPC.  
Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs. 

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