What medical professionals early in their career should know when it comes to individual disability insurance policies.
Physicians understand better than most why income protection is so important. They see firsthand how often injuries and illnesses can occur, and how an unexpected disability can disrupt a person’s life and their income. As busy medical professionals with countless demands and stressors, it can be a challenge to find the time to purchase income protection. But that is why it’s so important — because if an illness or injury prevents a doctor from working, they need the peace of mind knowing they’re covered. Selecting the right individual disability insurance, or IDI, policy for an individual’s lifestyle and career can save time and headaches.
Doctors invest years of hard work, time and money to get where they are, and protecting future earning potential is an important decision. IDI provides monthly benefits if an insured individual is unable to work due to sickness or injury. Several IDI carriers have designed robust income protection plans that are specifically built to protect physicians throughout their careers. With many options in the marketplace, it’s important to understand what to look for in an IDI policy. For example, a policy that evolves with a policy owner’s career and future earning potential should be standard to maximize coverage. In addition, look for IDI policies that offer:
A strong definition of disability.
For specialty professions, the ability to select an own occupation rider can provide protection from a disability that prevents someone from performing a specialized job. An own occupation rider will then allow for other work. For example, a surgeon who develops a hand tremor and who can no longer perform surgery could collect benefits while choosing to work in another capacity that the hand tremor doesn’t affect.
Student loan riders.
Many IDI carriers offer riders that can reimburse student loan payments if the policyowner becomes disabled. These riders usually cover some or all student loan payments, up to a maximum amount and/or period. The reimbursement benefits can often cover up to $450,000 in student loan payments and are paid in addition to a policy’s base monthly benefits. It is common for medical professionals to carry substantial student loan debt for some time during their careers, so student loan relief in the face of a disabling event can provide real peace of mind.
Opportunities to increase coverage.
A rider that allows increased coverage in the future to keep pace with rising income is a must for those early in their medical careers. This will help ensure that as a young professional adequate coverage is available no matter if or when a disabling event occurs. Some riders supply steady increases each year, while others allow for larger jumps in coverage. Make sure the option to significantly increase coverage after education and training are complete is available to ensure coverage keeps pace with rising income.
Protection if a loved one has a serious health condition.
Some policies provide family caregiving benefits if the insured individual must take time off work to care for a family member with a serious health condition. This can offer extra peace of mind knowing income is protected if a family member becomes seriously ill or injured.
Discounts and affordable options for medical residents and fellows.
Many carriers offer special programs and discounts to encourage applications from residents and fellows. Typical discounts range from 10% to 20%. On top of that, some carriers offer a streamlined application process for residents and fellows that require no proof of income, medical labs or exams up to a certain amount of coverage – often around $7,500 in monthly benefits.
To entice residents to buy a policy earlier in their training, some carriers offer smaller affordable policies only to residents and fellows that are coupled with comprehensive rider and coverage increase options. This locks in quality income protection for doctors in training for a lower cost with the opportunity to increase coverage in the future when they’re earning more — even significantly more.
For residents or fellows nearing completion of training who have secured an employment contract, many carriers require only a short application and a signed employment contract to get a policy to cover post-training new income. Often the carrier won’t require medical labs or exams in this scenario either.
Medical professionals have invested many dollars and years into education and training, and protecting that investment is essential. By purchasing an IDI policyearly in a career, a doctor can save time, ensure lower premium rates and secure quality coverage that will protect income for years to come, no matter what happens.
Chris Coy is a regional director of IDI Sales at The Standard. Chris works with brokers and agencies across the country to find sales opportunities for individual disability insurance. He works to educate sales partners about new technologies and sales programs that make IDI easier to buy. Chris has a bachelor’s degree from Portland State University. He received his CLU and ChFC designations from the American College and is L&H licensed in Oregon.