The group long-term disability coverage is generally provided to doctors who are employed. It fulfills the basic need of some kind of cover against disability that an employer must provide for employees. Honestly, it won’t be enough to cover you adequately against any kind of disability. The other disadvantage of such a policy is that it lapses when you quit your job, which is quite normal for most working professionals including doctors. People hop jobs for better prospects. As a young doctor you just cannot afford to operate without a long term individual disability insurance (IDI) policy that provides the best possible cover. When we speak of the best possible cover against disability, it means an adequate cover that replaces 60-70% of your after-tax income.
Young doctors need an IDI policy more than others
The average student debt for medical school graduates in the United States is $200,000, which is a very large amount for a young doctor. It takes more than a decade for a doctor to repay this debt and this is where you have to confront the question – what happens if you get disabled with most of the debt still unpaid? If you have a long term doctors disability insurance policy, you can continue to pay all your bills including the student loan.
By the time you are 12-15 years into the profession, you are in a much better position financially. By this time you would have paid off your student loan although there are chances that you may have a house mortgage and/or an automobile loan to pay off. Since your income would also have grown three-fold, you are in a much more comfortable situation. Still you will need a physicians disability insurance policy to cover zero earnings due to disability.
Getting the most out of your disability cover
No disability insurance services, including the standard IDI policies offer more than 60-70% replacement of your after-tax income. This is enough to pay for your bills including your student loan repayment and that is why it is ideal for doctors who haven’t completed a decade of service when your earnings have not yet hit 7-8 figures.
Mid-way through your career when your earnings hit 7-8 figures it becomes difficult to get adequate coverage from your healthcare professionals disability insurance policy. That’s because most insurance carriers have a cap on the maximum amount of benefit they offer. Hence, with higher incomes, there will be a gap in coverage because 60-70% income replacement becomes impossible with a standard IDI policy.
It is very difficult to select the right policy
What do you do when your standard IDI healthcare professionals insurance policy fails to provide adequate income replacement of 60-70% of your mid-career income? You will have to choose a high limit IDI policy, select the right riders in it and chances are, you still may not make that income replacement mark which can be considered adequate.
There are still ways to get closer to that kind of income replacement benefit. You can go for a group long term policy that is economical and helps you to stack your disability cover with additional benefits. It is much better to hire the services of a reliable disability insurance broker who will guide you with his/her knowledge and experience to optimize your disability cover.