Dental and medical professionals invest a great deal of time, effort, and money into their careers. The resulting income can provide a comfortable lifestyle, while it is being earned and provided it has been safeguarded.
How can you safeguard your income? Let’s take a look at disability income insurance, one of the important risk management tools for dentists and physicians at all stages of their careers.
Just like its name implies, disability income insurance, commonly known as DI, is a type of insurance that may pay you a benefit if you are no longer able to work due to injury or illness. Say, for example, you injure your back or are diagnosed with cancer: if you had a DI policy, it would help replace at least a portion of your income while you are unable to work.
A good way to think of it is as insurance for your income.
Since a physician’s or dentist’s ability to generate an income is primarily dependent on his or her ability to physically complete clinical work, you see how critical it is to have DI.
If you’re in dental school or residency, you’ve more than likely had a presenter visit your program to speak about disability income insurance. Most of the time, these presentations focus on the company itself as opposed to explaining what this insurance can actually do for you. If you’re a practicing doctor, you may have previously opted out of this coverage and are now interested in learning more.
In this article, we'll outline some of the basics of a disability income insurance policy.
Disability income insurance benefits don’t begin the moment you experience an injury or illness. First, you must satisfy something called an “Elimination Period.” Similar to a deductible on other types of insurance, this is the number of days that you must be disabled before any benefits are payable. The most common elimination period on an individual disability income insurance policy is 90 days.
The benefit period is the length of time for which disability benefits may be payable in the event of a disability. Common benefit periods include "to age 65", "to age 67", and "to age 70". Say, for example, you had a policy with a benefit period of "to age 70" and you became disabled at age 32, benefits may be payable each month to age 70 while you continue to be disabled under the terms of the policy.
Here is more information about disability income insurance (DI) that you may find helpful. Although some of these articles were written for a specific audience of dentists or physicians, they will all hold relevant information for dental and medical professionals.
Disability policies usually have “riders” attached to them. Riders are available at an additional cost and may add important enhancements or coverages to the basic policy. Your broker or agent will know the types of riders to attach to a policy. Examples of riders may include the following:
As a medical or dental professional, you are very susceptible to disability. Disabilities that may be a minor inconvenience for those engaged in other occupations may result in your inability to ever practice your profession again.
"Own Occupation" is a definition of disability covering disabilities that prevent you from working in the specific occupation for which you have been trained and are currently working in. Full benefits may be payable even if you return to work in a new occupation.
Not all disabilities are total disabilities; some disabilities are partial or residual in nature. For example, you suffer a back disorder and are able to continue to work, but on a more limited basis.
Even though you are still working in your practice, you may be suffering a significant income loss due to the disability. Partial/residual disability riders may help make up some of your lost income.
These are riders that provide additional monthly benefits in the event that you become catastrophically disabled. Different companies will have different definitions for what they consider catastrophic disabilities.
You’ll want the ability to increase your coverage throughout your career since your income will typically increase over time. Increase options allow you to increase your coverage level as your income grows without regard to any changes in your health..
Cost of living rider, as this is often called, may provide post disability increases to your monthly benefit after the first claim anniversary and annually thereafter while you continue to be disabled under the terms of your disability insurance policy.
This rider helps offset the impact of inflation and is important in the event of a long-running claim. For example, $5000/month will typically have more buying power today than it will have in 20 years.
This rider provides additional monthly benefits payable directly to your student loans.
Safeguarding your income is an important aspect of building a strong financial foundation, and disability income insurance may help you do so.
Are you ready to learn more about disability income insurance?
At Treloar & Heisel, we know you need more than insurance; you need a guide who takes the time to understand you. To talk through your unique situation, contact us today.
About Treloar & Heisel
Treloar & Heisel, an EPIC Company, is a premier financial services provider to dental and medical professionals across the country. We assist thousands of clients from residency to practice and through retirement with a comprehensive suite of financial services, custom-tailored advice, and a strong national network focused on delivering the highest level of service.
Insurance products offered through Treloar & Heisel, LLC.