Understanding Physician Disability Insurance in 2023

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Disability insurance can replace a portion of your income if you become sick or disabled and are unable to work. It provides financial protection for your most valuable asset: Your ability to work after years and money spent learning your medical or dental specialty.

But it isn’t a straight-forward product, like term life insurance. So, it’s often misunderstood or overlooked by the people who need it most.

Use our form below to learn about disability coverage options tailored for your profession and household needs.

Who needs to buy disability insurance?

If you’re in the medical, dental, veterinary, or other professional field that requires a graduate degree to practice — or if you’re the primary income earner for your family — then you need disability insurance. If both apply to you, then you really need it.

What is long-term disability insurance?

Long-term disability insurance replaces a percentage of your income if you become disabled and can no longer work. Depending on the policy, disability coverage can be up to 65% of your gross income and continues providing a monthly benefit until you either recover or reach retirement age (or max out your benefit period if it’s shorter).

What does disability insurance cover?

Unlike short-term disability that’s limited to temporary conditions that resolve within three to 12 months, long-term disability insurance covers injuries and illnesses for an extended period of time.

Some of the most common long-term disability claims include musculoskeletal disorders, cancer, heart attack, stroke, mental health issues, and injuries such as fractures, sprains and strains.

But depending on the disability insurance policy, the definition of disability (meaning what is versus what isn’t covered) can vary. For example, disability coverage can cover everything from total to partial disability. In some cases, you might receive disability benefits even if you’re able to work in another capacity.

This is why it’s so important to understand your existing coverage and supplement any gaps when needed.

What types of long-term disability insurance are there?

There are two main categories of long-term disability insurance: “any-occupation” and “own-occupation”.

With any-occupation coverage, you can only collect disability benefits if you can’t perform the main duties of any job. Therefore, it’s harder to qualify when the time comes to file a disability claim.

Own-occupation coverage creates a stronger definition of disability as you’ll receive a payout as long as you can’t perform the main duties of your profession (regardless of employer). In which case, you can work in another field or career entirely while still receiving disability benefits.

Own-occupation

Disability insurance policies aren’t black and white like term life insurance. The broader the definition of disability, the better coverage you’ll receive (and the more expensive the policy will be).

When choosing your level of coverage as a physician with specialized training, consider the following definitions of disability:

  • Specialty-Specific. This is a true-occupation policy that allows you to make as much money as you want in another field or profession, while still receiving disability benefits.
  • Transitional Own-Occupation. You’ll receive an adjusted benefit based on your earnings from your new job while being disabled.
  • Modified Own-Occupation. Sometimes called “own-occupation, not engaged” or “own-occupation, not working”, this definition only pays if you don’t take another job during your qualifying disability.

There are nuances to each type of policy, but having an own-occupation definition provides better income protection than an any-occupation definition. We only recommend purchasing policies that include an own-occupation rider.

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