Since you were in medical school, it has probably been drilled into your head that you must have disability insurance. Your ability to earn an income is your most important asset.
Not having the proper protection plan in place if you suffer an injury or illness can put this asset in danger. However, knowing where to start is not always straightforward, as your insurance needs can vary based on individual circumstances and preferences.
Disability insurance is designed to help replace a portion of your income should you be unable to work due to an injury or illness. It is also one of the most critical components of a comprehensive financial plan and one of the 6 Money Decisions™ for a physician or dentist.
However, it is often overlooked. Rushing through the process of obtaining disability insurance or not having all the facts before purchasing can lead to doctors making mistakes.
Failing to accurately estimate the amount of coverage required to maintain your lifestyle and cover expenses during a disability period can leave you underinsured.
Not fully understanding the policy's definition of disability can lead to a situation where you're unable to claim benefits even if you're unable to perform your medical specialty.
Ideally, you want a policy that provides "own-occupation" coverage, which means you'll be covered if you can't perform the duties of your specific medical specialty, even if you could work in a different capacity.
Failing to thoroughly review policy exclusions and limitations can lead to unpleasant surprises when you try to make a claim.
While it's important to get adequate coverage, finding a policy that's affordable over the long term is also crucial.
Doctors often experience rising income over the course of their careers. Make sure your policy has a provision for increasing your coverage to reflect potential future earnings.
Not taking the time to compare policies from different insurers can result in missed opportunities for better coverage or lower premiums.
Disability insurance riders can add valuable benefits to your policy, such as cost-of-living adjustments, partial disability benefits, and more. Not exploring these options could mean missing out on essential protections.
Most residents and fellows can qualify for a discounted policy.
Choosing an insurance company with a poor reputation for claim processing or financial stability can lead to frustration and uncertainty when you need to file a claim.
Remember that buying disability insurance is a complex decision. Ensuring you have enough income to support your family in the event that you suffer an injury or illness and cannot work for an extended period of time is an essential part of any financial plan.
Our team can help you navigate the nuances of disability insurance and find a policy that best suits your needs and circumstances. Schedule a complimentary meeting with one of our financial planners today to get started!
A disability income policy has exclusions and limitations. For costs and complete details of coverage call 704-557-8750.
John Dameron has been a financial planner and partner with Spaugh Dameron Tenny since 2002. With the help of the SDT team, John created a lecture series called Physicians Financial Focus, authored a book entitled The Residents and Fellows Financial Survival Guide, and has coached hundreds of physicians from residency/fellowship into practice. His expertise has also been featured on KevinMD.
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