Think of a pyramid when you
think of the importance of disability insurance (Fig.1). In our firm’s
experience, most physicians have
the same financial concerns: income protection, loan repayment,
mortgage/rent, partnership buy-in,
child’s education, retirement, etc.
All are considerable obligations and
are dependent upon your ability to
work. When looking at the pyramid,
the foundation must be your ability to earn income. If you cannot,
you must have disability insurance
to replace what you have lost. It’s
difficult for a young physician to
contemplate being faced with an
injury or illness so severe that it
changes the course of the career
they worked so hard to establish,
but that’s exactly why disability
insurance should be considered an
important component of a comprehensive insurance and financial
protection plan. As you transition
from being a fellow to an attending
physician, it is critical that your disability policy is structured to maximize your monthly benefit.
Why should a physician
purchase an individual
disability insurance policy?
An individual will spend anywhere
from 11 to 15 years in training to
become a physician. If we assume
you are age 32 when you become an
attending and have a starting salary
of $250,000, your income potential
to age 65 is $8,250,000. Taking into
consideration the time you have
committed, your income potential,
and the obligations you have as-
sumed, it is imperative to purchase a
comprehensive individual disability
When should a physician
purchase disability insurance?
You should purchase disability
insurance as soon as financially
possible. Disability insurance premiums are based on your age, benefit
amount, and your specialty. If you
purchase the policy using level rates,
your monthly premium is locked
in to age 65. Also, you want to take
advantage of your good health so
you have no difficulty qualifying for
Can fellows purchase individual
insurance if their current employer
provides group disability?
Yes. Most companies have special
issue limits for fellows. No income
documentation is required and your
group disability benefit is not used
in the calculation of how much individual disability insurance you can
What can you expect
the premium to be?
Individual disability insurance policies typically cost 2% of your current
How long does the
application process take?
The application process usually takes
two to four weeks.
What are the steps in the
This process typically includes completion of an application, a blood/
urine test, and a personal history
interview (e.g., medical questions,
confirmation of occupation and residence, etc.).
Who owns the disability policy?
Will you be able to obtain
coverage if you have a pre-existing condition?
Yes. Depending on the medical condition, most carriers will still offer
you some type of coverage. For
many medical conditions, a policy
can be issued with an exclusion for
the medical condition. An exclusion
allows the carrier to provide coverage except for a disability that
occurs from that pre-existing condition.
It’s difficult for a young physician to contemplate being faced with an injury or
illness so severe that it changes the course of the career they worked so hard
to establish, but that’s exactly why disability insurance should be considered an
important component of a comprehensive insurance and financial protection plan.