Disability Insurance for Physicians, they need it, and don’t always have enough!

So often our agency, which has insured physicians and mid-level providers for 25 years, comes across the similar scenario, the physicians would like to qualify for more insurance, they are capped by a combination of their underlying group long term plus the individual, non-cancellable policy which they purchased years ago, at a lower rate, a lower benefit.  We would like to help our physicians obtain more disability insurance, so that if something happens, even if temporarily, the income stream provided by the insurance companies actually sustains the lifestyle rather than simply fills up the gaps short of the necessary income during a traumatic time of injury, illness and recovery.

[It may surprise you that in December of 2010, there were over 2.5 million disabled workers in their 20s, 30s, and 40s receiving Social Security insurance benefits due to a disability] * Source: Social Security Administration, Disabled Worker Beneficiary Statistics, ssa.gov

The majority of disability needs analysis calculations consider the following income and expenses:

Monthly Income

  • Spouse's after-tax income
  • Investment income
  • Group/Individual disability income
  • Other monthly income

Monthly Expenses

  • Mortgage or rent
  • Loan repayments
  • Utilities
  • Food
  • Clothing
  • Transportation
  • Education/Tuition
  • Medical/Personal
  • Insurance premiums
  • Other expenses

In a study released by the Council for disability, 78% of high income earners say that they would be financially significantly impacted by a disability, yet only 10% purchased an insurance policy. 

Solutions for Disability traditionally:

The traditional guaranteed issue long term disability insurance policies, which are issued to physicians in groups have limits to them.
Policies purchased in group form are not typically portable, employees are not in control of the continuity because the plan is tied to the job.
Group Disability Insurance Tied to Employer

The employer can cancel, the Carrier can cancel and the benefits are calculated on assumed income,without proving and considering finances which may come in onus or commissions.  When the disability is needed the most, the minors receives are taxed because the premiums were deducted by the employer. The benefit issued is usually too small to protect the employees incomes sufficiently.  The plans are also blended with workers compensation benefits, which further reduce the benefits of the income replacement purchased by the physician.  Non traditional high limit guaranteed disability plans are an incentive to employees.  When the need for the money is the strongest, medical bills. Diminished income are strangling physicians cash stream, many traditional disability insurance plans come up wanting.

Individual Non-Cancellable

Traditional plans have predictable limitations as well: usually, there is a $5,000 or a $10,000 limitation.  
The maximum issue limit for most plans is now, not likely to be greater than $15,000.  
Any physician who earns more than $15,000 pet month after tax would be underinsured.  Not less than 65% of income replaced income is considered sufficient by many analysts. 

A unique solution, will provide high income disability insurance where others will not allow you more monthly benefit.

The key to physician disability protection is to find the carriers which. will underwrite unusual income reporting, high net worth, hazardous employments, substandard risks and unique jobs are challenges for traditional insurance disability underwriters, but these high income high limit plans take all of this into consideration.

The guaranteed long term disability plans are often tied to the job, traditional individual DI is not sufficient,  the physician needs more protection in order to fully sustain the financial lifestyle and commitments that come with high earners salaries. High limit nontraditional plans can help provide the only coverage available in the market. 

Associate, plan, provide high limit disability income to physician stakeholders

The answer to providing higher limits is to write a supplemental multi life disability policy, maximizing coverage, employer employee connections, potability and flexibility.

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