Disability Income Protection
Getting disability income insurance at an early age may offer lower rates and long-term peace of mind.
By Glenn C. Breslauer, Financial Professional,
Most physicians already realize the importance of insuring their lives, their cars, and their homes, but often overlook insuring their most important asset - their ability to earn an income. Think about it, your income is the primary source of funding for a lifetime, from basic necessities, to the hopes and dreams you have for yourself and those you love.
Think about your income over an entire working lifetime – for example, a $200,000 annual income at age 30 today accumulates to $7,000,000 at age 65.
But what would happen if your income stopped because you were too sick or injured to work?
Without a paycheck, how long could you pay your mortgage and utilities, buy groceries, make student loan payments, etc.? In all likelihood, your life would be thrown significantly off course.
Before you say this could never happen to you, consider the fact that 1 in 4 of today’s 20-year-olds will become disabled before they retire. 1
I know, you are probably thinking that most disabilities are the result of freak accidents. Well, you’re in for a surprise. The vast majority of disabilities, about 90%, are caused by various forms of illness including cancer, mental disorders such as anxiety and depression, muscle and back problems, and heart disease. 2
What you should look for in a Disability Income Policy
Disability income insurance (DI) can help replace your income if you become too sick or hurt to work. It provides a buffer against the unexpected.
Should disability strike, DI provides income that can be used to keep your household running as well as to help you adjust to your changed circumstances.
But before you go shopping for a DI policy, you need to know what features to look for to get income protection you can count on, and also make sure you are working with someone who specializes in the medical industry.
How Disability is Defined
The definition of Total Disability outlines what constitutes being totally disabled.
If a policy defines Total Disability as inability to return to work in any occupation, then it would typically pay benefits only if you were unable to perform any job, either your own or a job in a new field or occupation.
If the policy defines Total Disability as an inability to work in your own occupation, it typically pays benefits if you cannot perform the duties of the occupation you were engaged in prior to becoming ill or injured. The wording in a Disability policy for a physician is absolutely critical.
Coverage for a Partial Disability and/or Recovery
Not all disabilities will result in a total disability. Sometimes an injury or sickness will result in a partial disability.
Partial benefits are typically paid in an amount that is proportionate to the loss of income you suffer due to partial disability
Recovery benefits support your financial recovery even after you have physically recovered
These benefits are not available with most group plans.
Flexibility to Tailor Coverage to Your Specific Needs 3
Optional features (also called “riders”) can offer you additional coverage based on your specific needs. Riders can let you:
Increase coverage as your income grows with no medical insurability requirement. 4
Adjust benefits to help keep pace with the cost of living.
Safeguard retirement contributions.
Protect student loan payments.
Most professionals expect to change jobs or employers multiple times during the course of their career.
You can take individual DI coverage with you when you change jobs.
Group Long-Term Disability (Group LTD) plans typically are not portable.
To avoid the possibility of losing your coverage just when you need it most, choose a policy that’s both non-cancellable and guaranteed renewable to age 65 or 67— your policy cannot be cancelled by the insurance company and premium cannot be increased.
With group or association group coverage, you run the risk of being dropped and left unprotected at a time in your life when, due to your age or to a change in your health, it would be very difficult to qualify for coverage from another provider.
It’s important to note that the cost of individual disability income protection is age-based, so you can lock in a lower rate by buying now while you’re young and healthy.
Remember, you will not get any younger, or healthier than you are today, so time is of the essence!
You’ve made a significant investment of time and money to build your career in medicine with the promise of financial security and the other rewards that being a physician provides.
But should you become too ill or injured to work, that promise evaporates. Contact a reputable DI insurance agent, ideally one who specializes in the medical industry, to ensure you have adequate protection for your greatest asset.
Contact us for individual Disability Income Protection
About Glenn C. Breslauer
Glenn C. Breslauer is a founding partner of WealthScope Financial, a Financial Strategizing group that specializes in working with medical professionals.
Before forming WealthScope with his business partners, Michael Engler and Michael Steigerwalt, Glenn spent years in Dermatology and Aesthetic Medicine building dynamic organizations and helping them reach new levels of success through proven, actionable strategies. Glenn is the author of “There are no life lessons” which is available on Amazon and Apple Books.
WealthScope Financial is not an affiliate or subsidiary of Penn Mutual. Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
U.S. Social Security Administration Fact Sheet, December 2018.
Council for Disability Awareness 2014 Long-Term Disability Claims Review.
Product provisions and availability may vary by state. Optional riders are available for an additional premium.
Restrictions and limitations apply. The amount of additional coverage available will be financially underwritten based on the amount of disability insurance you have or are eligible to receive, as well as your income at the time you apply. Prepared by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY.