You chose medicine as a career to help people and make a difference.
But what happens if you can’t practice medicine — whether temporarily or permanently — due to an accident or illness? What happens to the financial obligations you’ve incurred and the income to fund the lifestyle you enjoy?
If you’re fortunate, you won’t have to worry about that happening. But as a doctor, you deal with people who didn’t think accidents or illness would happen to them either.
Individual disability insurance is something most people should consider owning. For physicians and medical professionals, it’s even more important to own an individual disability insurance policy. Here are seven reasons why you need it:
1. A disability isn’t a long shot
Estimates range from 25 percent to 30 percent of American workers will endure some type of temporary disability during their careers that will prevent them from working.
You may not have a dangerous job or lifestyle, but there are still a number of ways you could become injured or sick enough to limit your ability to practice medicine. Here are just a few:
- You could injure yourself in a recreational activity like skiing, playing basketball, or boating.
- You could suffer a stroke that prevents you from some of the physical aspects of your practice, but still enable you to consult or teach.
- The treatment for cancer may prevent you from handling some or all of your medical duties.
- A cardiac episode could keep you out of practice for several months or longer.
- Chronic back pain, arthritis, or carpel tunnel syndrome could limit the number of patients you can see or how many procedures you can perform.
- A severe car accident, fall, or burn injury could completely affect your ability to practice medicine.
2. Your debts and obligations don’t go away
Chances are you incurred a sizable amount of student loan debt and still owe money on those loans, which in most cases won’t be forgiven because of a disability. If you bought a home, you will still have to pay your mortgage even if you can’t work. Your credit card debt will need to be paid.
An individual long term disability insurance policy can provide the income you need to continue making those payments if you can’t work or have a reduction in your income.
3. It doesn’t take much to affect your ability to earn income
As a physician, you have specialized skills that require exceptional cognitive abilities, complete vision, and full use of your hands. Lose any of these capabilities in any capacity and you may have to reduce your workload or stop practicing altogether. The impact could be temporary or permanent.
Long term disability insurance policies can cover a partial loss of income through a residual disability insurance rider. These riders provide features that will replace your income in the event that a disability causes a partial loss in income, but you are still able to work in some capacity.
4. Even a partial disability will cost you something
Think about what you would have to give up if a disability costs you, say, 25 percent of your income. If you earned $300,000 before disability and had that income reduced by $75,000, could you still save for retirement? What aspects of your current lifestyle would you have to do without? A vacation home? A club membership? Your football or theater season tickets?
The right individual disability insurance policy can make up the difference between your pre-disability income and what you lost because of an accident or illness.
5. Mental health issues are more common than you think
It’s not just the risk of physical disability you need to protect against. The stress of your profession, life circumstances, or the onset of mental illness can impact your ability to work.
According to the Council for Disability Awareness, mental disorders accounted for almost 9 percent of long-term disability claims in 2012. Mental disorders were the fourth highest cause of claims in that year’s review of claims and outnumbered those caused by cardiovascular and circulatory disorders.
Studies show mental illness is prevalent among physicians and dentists. An Australian study in 2013 revealed a rate of depression in doctors that was four times greater than the general population.
Individual long term disability insurance policies typically provide benefits when mental disorders, breakdowns, or abnormal stress affect your ability to work.
6. Other options won’t provide enough
Many people count on Social Security to help them through a disability, but it won’t pay near enough to compensate a high income physician or dentist.
Likewise, workers compensation only pays a fraction of your income and only if you’re injured on the job. Group life insurance typically limits the amount you can receive in benefits and the benefits are treated as taxable income.
Only an individual disability insurance policy can fully replace lost income due to injury or illness.
7. Consider the impact to the business side of your practice
Many medical professionals are also business owners. If a disability keeps you from practicing for an extended period, many of your patients may find other providers by the time you can return to work.
For those who also have to be concerned with keeping their private practices running in the event of short-term or long-term disability, there is an option called Business Overhead Expense Insurance.
Whereas regular disability insurance covers individual income, a business overhead expense policy will help cover monthly business expenses such as employee salaries, rent, utilities, maintenance, taxes, etc. Premiums for this type of insurance are considered a business expense and are therefore tax deductible.