As a medical professional, your skills and expertise are invaluable, making it essential to protect your ability to earn an income. Individual Disability Insurance (IDI) is a safety net that can safeguard you financially in the event of a disability that prevents you from practicing medicine. However, not all IDI policies are created equal, and as a doctor, there are specific considerations you should keep in mind when purchasing one. In this blog post, we will explore ten crucial factors doctors should consider when selecting an individual disability insurance policy.
What Doctors Should Know About IDI Policies
1. Definition of Disability
The definition of disability is the foundation of any IDI policy. Look for a policy that provides a true “own-occupation” definition, meaning you will be considered disabled if you cannot perform the substantial and material duties of your specific medical specialty, even if you could potentially work in another occupation. Sometimes this coverage is called “specialty own occupation” coverage.
2. Coverage Amount and Benefit Period
Determine the level of coverage you require to maintain your lifestyle and meet financial obligations if you become disabled. Consider a benefit period that covers you until your expected retirement age for comprehensive protection.
3. Elimination Period
The elimination period is the waiting period between the onset of disability and when you start receiving benefits. Select a period that aligns with your financial reserves, as a longer elimination period can lower your premiums.
4. Non-Cancelable and Guaranteed Renewable
Ensure that your policy is non-cancelable and guaranteed renewable. This means the insurance company cannot cancel your policy or increase premiums as long as you pay your premiums on time, giving you greater peace of mind.
5. Additional Riders and Options
Explore the availability of riders and options that can enhance your policy’s coverage. Common riders include cost-of-living adjustments (COLA), future purchase options, and partial disability benefits, among others.
6. Premiums and Discounts
Shop around for competitive premiums and inquire about discounts available to medical professionals. Some insurance companies offer special rates for doctors due to their lower-risk profiles.
7. Exclusions and Limitations
Thoroughly review any exclusions or limitations in the policy, such as pre-existing conditions or certain medical specialties with higher risk profiles. Understanding these factors will help you make an informed decision. In particular, look out for limitations on benefits for mental/nervous conditions, and consider the importance of that coverage to you before purchasing a policy.
If you suffer from a pre-existing condition, your application for individual disability insurance coverage may be denied. You would still be eligible for group long term disability insurance, assuming your employer offers it. If you are self-employed, you might consider purchasing a group disability policy for yourself and your employees, which you can then supplement with guaranteed standard issue disability insurance.
8. Financial Strength of the Insurer
Select a reputable and financially stable insurance company with a strong track record of fulfilling its obligations to policyholders. Look for ratings from independent agencies like A.M. Best and Standard & Poor’s to assess the company’s financial strength.
9. Claims Process and Support
Research the insurer’s claims process and the level of support provided during a disability claim process. A smooth and efficient claims process is crucial when you are dealing with a disability and its associated challenges. Look up the insurer on your Department of Insurance’s website to see if it has been the subject of many complaints relative to its market share.
10. Seek Professional Advice
Given the complexity of individual disability insurance policies, it is wise to seek advice from a qualified insurance broker, financial advisor, and/or lawyer who specializes in working with medical professionals. They can help you navigate the options and find the best policy to suit your unique needs.
Investing in an individual disability insurance policy is a critical decision for doctors to protect their financial security in case of a disability. By considering the ten factors outlined in this blog post, you can make an informed choice and ensure you have the most appropriate coverage for your specific circumstances. Remember, your ability to practice medicine is your most valuable asset, and safeguarding it with the right IDI policy will provide you and your loved ones with peace of mind for the future.