Disability Insurance for Physicians: Keeping Pace
Most physicians purchase their initial disability insurance policy when they are finishing medical residency. You buy $3-$5000/month, set it up on a monthly bank draft and don’t give it much thought.
As the years go by, your income increases as do your living expenses. It is important that your disability policy keeps pace with these changes. The worst time to find out how much disability benefit you carry is at the time of claim. By that point it is too late.
There a few key times to pay attention to your policy:
- Policy anniversaries. If you have the type of policy with a pool of increase options, you are eligible to increase your policy on your policy anniversary. You usually will receive correspondence from the company as well as from Set for Life. Contact Set for Life to see if you are eligible for the increase and how much it would cost.
- Every 3rd policy anniversary. If you have a policy with Principal Financial Group and have the benefit update rider or if you have the Guardian Limited product with the benefit purchase rider, it is important that you read the correspondence. They request your financial information every 3 years, even if you have not had a change in income. By submitting your information, you can retain this rider and increase the policy in the future without medical underwriting. On your 3rd anniversary, they will let you know if you are eligible to increase your policy and if so, by how much and how much it will cost. To keep the rider on the policy, you need to take 50% of the offer. This is an excellent way to keep your policy up to pace with your income.
- If you change jobs or lose your group disability benefits. Some companies will allow this to be a triggering event and allow you to increase your policy even if it is off anniversary.
- If you make partner or have a large increase in income. If you have more than a 50% increase in income, some companies will allow you to increase your policy at this time even if it is not on your policy anniversary.
- If you change medical specialties or careers. If you make a drastic career change, this may allow you to change your policy to a more favorable occupational class and a better premium rate. I had a client who was an emergency physician who went back to law school and started his own practice. His premiums reduced by more than 60% since rates for attorney are significantly less than for emergency physicians.
For more information about disability insurance for physicians, contact Set for Life Insurance today!