Protecting an asset
A 2014 survey by the American Medical Association revealed that roughly 75% of doctors had a long-term disability insurance policy. That number should be 100%, Davis says, especially in light of disability statistics.
According to the Social Security Administration, about a quarter of today’s 20-year-olds will become disabled before they turn 67. It’s a sobering fact that many young adults, including young doctors, simply ignore. “They think they’re exempt, that it’s not going to happen to them,” says Marc Feiner, MD, a retired OB/GYN. “Your health is something you can’t gamble with.”
Feiner should know: He spent the years from age 61 to age 65 on disability after his psoriatic arthritis became so bad he could no longer do surgeries and deliveries. Without the insurance benefits, he says he would have been forced to pull money from his retirement account.
“What would have happened if I had not had the disability insurance? I would’ve been screwed,” he says.
Davis says uninsured and underinsured physicians need to start viewing themselves as a valuable asset.
“If you don’t have disability insurance, it’s like having a million dollars and just leaving it out on your front lawn,” he says. “You can hope nothing happens to it, or you can invest $300 and buy a safe.”
Unlike a safe, however, LTD insurance is a complex financial product that experts say should be customized for each physician depending on specialty, age, gender, medical history and financial situation.
Here’s what physicians need to know about long-term disability insurance and how to get the right coverage and policy.
Where and when to get LTD insurance
Physicians have unique jobs and have high incomes, so when it comes to individual insurance policies only a half-dozen companies offer LTD insurance to doctors: Ameritas, Berkshire/Guardian, Mass Mutual, Ohio National Financial Services, Principal and The Standard.
Policies can be purchased from independent insurance brokers or “captive” agents, those working with only one of the big six.
Independent brokers are able to offer more options and more plans because they don’t favor one company over another, says Stephanie Pearson, MD, FACOG, who became an insurance adviser to physicians and an independent agent after an on-the-job injury ended her career as an OB/GYN.
She acknowledges that some captive agents may be able to offer discounts to which independent agents don’t have access. “I think that there are some really solid captive agents out there who know their product, and it’s great,” Pearson says. “But if you don’t know what your other options are, you can’t really make an educated, informed decision.”
As for when to buy coverage, the consensus is the earlier the better. LTD insurance, like life insurance, is cheaper at a younger age. Insurance companies often offer discounted policies—sometimes without medical underwriting requirements—to residents.
A young doctor may also find it easier to secure LTD insurance before age-related medical issues (chronic back pain, for example) can jeopardize coverage. Preexisting conditions may torpedo a doctor’s chances for a policy during the underwriting process.
Davis advises physicians to start LTD coverage with their first paycheck. “Paying right out of the gate, you never miss the money,” he says. “Premiums [for my wife and I] were eventually about $900 a month, and that’s a chunk of change, but we never missed it, because we started it from day one.”
Pearson says that it is also crucial for female physicians to get LTD insurance before they start a family. “The list of what can happen during and after pregnancy is huge,” she says. “Women really need to get it before they try to get pregnant.”