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Unexpected Life Events that Can Derail Your Finances


From debt to disability, bankruptcy to malpractice suits, and much more, doctors are exposed to a lot of risks throughout their careers. Here are nine unfortunate life events that can completely derail your financial future if you’re not adequately prepared.

Disabling injuries and illnesses

Even though there are safeguards in place to help protect you against the financial strain of medical emergencies or disabilities, health insurance may not keep your finances completely safe. There are many limitations to any health insurance policy and the cost of medical expenses is so astronomical that you can end up with bills costing tens of thousands of dollars in no time at all.

This highlights the importance of physician disability insurance. Doctors should seek a policy with an own-occupation definition of disability. This means it will pay benefits if you are unable to perform your medical specialty, even if you may be able to still work in another capacity. The benefit you receive will replace a portion your income each month while you get back on your feet.

Bad investments

Interested in investing as a doctor to grow your wealth? That’s great. But it’s best to steer clear of risky investments. If you make risky investments and lose the money you’ve invested, your finances may be in serious danger. This is especially true if you’ve invested beyond your means.

To protect yourself against bad investments, perform due diligence by conducting your own research. Consult a licensed investment advisor or financial professional if you’re unsure about something. And never put all of your eggs in one basket. Diversify.


Filing for bankruptcy obviously has a strong negative impact on your financial health when you first file. But it’s also important to note that after you do file, a record of your bankruptcy will remain on your credit score for up to ten years before it’s completely gone. This means that bankruptcy has one of the most far-reaching long-term impacts on your financial health. It can stop you from getting approved loans and insurance policies in the future. You may even lose some of your property when filing if bankruptcy court seizes it to repay your creditors.

Home foreclosure

Bankruptcies may seem worse in comparison to home foreclosures since they remain on your credit history for up to ten years while foreclosures only stay for seven, but to mortgage lenders, foreclosures are by far the more serious. With bankruptcies, you may still be able to keep your home, but foreclosures typically necessitate either selling your home or giving it to your creditors to help offset the balance of your debt.

A malpractice lawsuit

While medical malpractice suits shouldn’t adversely affect any doctor’s medical license, they can still have far-reaching side effects that impact a physician’s emotional, mental, and financial wellbeing. With finances specifically, doctors may be liable for huge sums of payments to suing parties, even if they have malpractice insurance in place to protect themselves. Financial planning for physicians includes being prepared for malpractice lawsuits that 1 in every 3 doctors will be served.

Death in the family

If you experience a death in the family, particularly that of a spouse, child, or parent, the grieving process takes time. Pair that with an array of difficult financial decisions and you certainly have your hands full. The cost of losing a loved one can quickly add up, too, if the deceased doesn’t have appropriate life insurance policies in place to assist with funeral or other expenses at the time of their death.


Divorce can take a huge toll on your finances — especially if the separation isn’t amicable. On top of needing to split your current finances in half, you also will need to take on child support bills, legal support from divorce lawyers, and any extra expenses that crop up during the course of divorce proceedings.

These bills can be incredibly high, but they may be even more costly for you if you are the breadwinner for your household (like many doctors are). If your spouse is accustomed to not needing to work much, you may end up paying more in alimony to make up for the toll your divorce takes on the quality of their life.

Natural disasters

Natural disasters are one among the most unpredictable and uncontrollable sources of financial stress you’ll ever encounter. These events come in many forms, from tornadoes to earthquakes, volcanic eruptions to hurricanes, and more. Most people will never have to deal with severe natural disasters, but others, like excessive flooding, destructive thunderstorms, and wildfires, may hit a lot closer to home for you.

While some geographic locations are more prone than others, natural disasters are virtually impossible to avoid. To protect yourself financially, purchase a reliable homeowners’ or renters’ insurance policy, depending on your situation.

A global pandemic

The COVID-19 pandemic has been a shining example of this. When the pandemic hit, businesses shut down, hours were cut, and strict regulations were put into effect all around the globe to preserve the physical health of individuals. Essential workers, like doctors, were allowed to remain on the job, but thousands of primary care physicians had to close their private practices as more and more patients began avoiding their doctors’ offices, afraid that if they went they may catch the coronavirus.