Disability insurance is one of the most important elements of a doctor’s financial plan. Physician disability insurance protects a doctor’s income in the event they can’t work due to injury or illness. There are a lot of mistakes doctors make when it comes to disability insurance that can cause big problems. In this article, we’ll look at the five most common mistakes physicians make with disability insurance and how to avoid them.
Waiting too Long to Get Disability Insurance
The best time to purchase disability insurance is the day after you graduate from medical school. You can even get it during medical school if you’re on the ball. With that said, if you’re already practicing and don’t have it, get it ASAP. If you depend on your income to survive, you should do everything you can to protect it. Policies are less expensive the younger you are, and you can lock in a fixed rate policy when you’re younger and save loads of money in the long run. Every year you wait, the cost will increase by about 5%.
Relying too Much on Group Disability Insurance
If you work at a hospital or large group, you probably have some form of disability insurance through your employer. Many doctors make the mistake of assuming their employee disability insurance will be sufficient income protection. Unfortunately, that’s usually not the case. Most group plans only cover a portion of income. If you have insurance through your employer already, that’s great. Just make sure to supplement it with individual insurance, so you’re fully covered.
Not Getting Enough Coverage
If you’re ever disabled, you won’t complain about having more money than you need. Living with a disability can be very expensive. In addition to all of your normal living expenses, you will have additional medical expenses to manage. If you’re disabled indefinitely, you will likely lose your job and health insurance from work. On top of that, you’ll still need to save money for retirement.
Letting Your Policy Expire from Missed Premiums
You get small discounts if you pay your disability insurance premiums annually instead of monthly or quarterly. However, it’s easy to miss the annual bill in the mail when you get busy. Keeping your policy active is easy on auto-payment. If your policy lapses, your income is no longer protected. And on top of that, you may have to go through the medical underwriting process again to get coverage.
Not Using an Independent Agent to Help Purchase Disability Insurance
If you are working with an insurance agent who works for a company that has its own products, chances are the agent is only recommending his or her company’s disability policy. It doesn’t mean you’re necessarily getting a bad policy, it just means you might not be getting the best option for you. Working with an independent agent with a strong knowledge of disability insurance policies will ensure you get the best policy for your goals and budget.
