When it comes to crisis, you may not always have warning. As a doctor, you want to protect yourself and your family, as well as your estate. When looking at ways to protect yourself, there are three major things that can happen to every doctor, and three major mitigators for these issues:

Premature death - can be mitigated with Life Insurance
Loosing your job - can be mitigated by having an emergency fund
Being too sick or injured to work - can be mitigated with Disability Insurance

Today’s episode of Money Minutes for Doctors is all about Disability Insurance (DI). You’ve probably heard the rumor that it’s best to get Disability Insurance as soon as you can, and we are here to confirm that. If possible, the best time to get your policy is while you’re a Resident. There are many benefits to getting DI early: you are likely to be eligible for a discount while in residency, you are at your youngest/healthiest which correlates to having the cheapest plans, and the earlier you lock in your policy the more you will save overtime. Financial advisors can work with you to find a minimal plan that won’t cost much when you are in residency, and many of the discounts stay on your policy as you increase the benefit to suit your increased future income or if you want to upgrade due to circumstance changes. Pre-existing conditions also play a huge role when applying for DI, so getting locked into a policy sooner, rather than later, will also benefit you with any conditions that may arise.

If you are unfamiliar with how to apply for disability insurance, think of it as insuring your house. Although you never want anything to happen, you very much want that insurance IF it does. The first step is getting a quote before entering into underwriting. The quote give you an idea of your options. You can then submit an application. The underwriting process is perfectly acceptable for even broke Residents, as there is no money transferred during the underwriting process. Although a physical exam is not always necessary, it may happen in the underwriting stage. At this stage, you still have the option to review quotes with your financial advisor to find the best policy for you. REMEMBER: the cheapest one is not always the best. This is why you want a professional helping you read the fine print and make sure they pick the best option for your situation.

When looking at policies, remember that there are a few different levels of policies:

Level One: This type of policy only pays out if you are too sick to do anything. No matter what! This policy is hard for many doctors, as they may be too sick to do their occupation, but to have someone sign them off as being “too sick for anything” may be unreasonable.

Level Two: You are too sick or injured to do your occupation of choice (at the time the insurance kicks in.) If you can do something else, many times you would have your other occupation’s salary taken off of what they are giving in your DI policy.

Level Three: Double dipping in your own occupation (considered the gold standard) – This comes into play if you are too sick to work in your own occupation but can function in other capacities. You can get full disability benefits, but then also allowed to keep income from alternate employment opportunities.

Takeaways:

If you haven’t had your policies reviewed in the last year or two, make sure you bring this to your independent financial advisor so that they make sure you have the best policy. It can save you tens of thousands of dollars in the long run.
In many cases, as long as paying the premiums on the policy the insurance company cannot cancel policy and can’t raise the rates, but be sure to read the fine print.
Having an agent/advisor that you trust is key to choosing the right product so you know what is covered and what is not as well as getting the best priced package. An independent financial advisor can also help you save on your taxable income, as there are differences whether the employer or the employee are paying for the insurance claim.

1-888-256-6855

Info@MDFinancialAdvisors.com

Katherine Vessenes, JD, CFP®, is the founder and CEO of MD Financial Advisors who serve 500 doctors from Hawaii to Cape Cod. An award-winning Financial Advisor, Attorney, Certified Financial Planner®, author and speaker, she is devoted to bringing ethical advice to physicians and dentists. She can be reached at Katherine@mdfinancialadvisors.com.

You can also check out the posting here, featured on Brown Emergency Medicine, or on iTunes.