Disability insurance can seem complicated and overwhelming. We simplify the process and help give you the confidence to determine which carrier is right for you through our physician disability insurance comparison summary.
Just like when Twin Oak advisors look at Board Exam materials, some of the terms used on this page might not make any sense. If so, please check out our please check out our definitions page.
Why pick up
Disability Insurance is an umbrella term that can mean several different things. Your employer offers coverage, the AMA offers coverage, and so do several other associations and companies. Where they differentiate from each other is the actual definition of disability.
Employers will typically offer some type of long-term disability insurance. However, to cover everyone at the hospital under the same policy, they often broaden the definition of disability for doctors to make this feasible.
Most group disability insurance policies have a definition of disability that says something like “the inability to perform ANY occupation for ANY wage.” Once you are an employee, a lot of employers automatically enroll their physicians into their group insurance and may not give you the option to opt out. You can use this group disability insurance to supplement the True Own-Occupation disability insurance you have on the private side.
We need something that is actually going to pay a benefit when you need it and follow you throughout your career. Why stick with less adequate coverage that may cost less, but may dodge you when it comes time to pay up?
Read more about DI on our Insurance Blog.
True Double dip
This definition of disability insurance provides the highest level of protection for physicians. It goes beyond your specialty and protects your daily duties at the time of disability. Said another way … as your progress through your career, specialize or change roles - the definition of disability will grow with you. This feature on a disability policy is the most important for physicians.
The double dip portion refers to the ability to earn an income while on disability claim. Let’s say you could re-train, teach or work in another occupation altogether - any income you earn will NOT offset the disability insurance benefit you are receiving.
Carriers at play
No one carrier is best because there are several factors that go into which carrier might be best for YOU. We run an objective comparison summary of all 6 tailored specifically for doctors.
Now that we understand the basics, below are the different aspects and riders we include in our physician disability Insurance comparisons:
The amount of time with a loss of income due to a disability that must pass in order to start receiving your disability benefit. Options include: 60, 90, 180 or 360 day elimination period.
Considering cost and risks –we’ve found a 90-day elimination period is the sweet spot for physicians. Anything shorter than 90 days, you can reasonably self-insure by building up an emergency reserve, so no need to pay an insurance company for that. Anything longer, you would have to at least double your emergency reserve making the additional risk not worth the slightly cheaper price for a longer elimination period.
This is the amount of money you would receive each month if you were to have a disability claim and be unable to work. Depending on what stage of your career you are in, we can help determine how much disability benefit is appropriate for you.
For physicians in training, all of the 6 carriers offer you an initial $5,000 per month of tax-free disability benefit. This is across the board based purely on the fact that you are a physician in residency or fellowship.
For doctors out in practice, the benefit amount will be based on your income minus any group disability insurance provided through your employer. Once we have the info, we can help figure out how much disability benefit you qualify for.
At a bare minimum, we want the benefit amount to cover your fixed monthly expenses. That’s your mortgage/rent, utilities, car payments, student loan payments etc.
Each disability carrier will not only offer you an initial benefit, but also give you the ability to increase in the future with no medical questions asked.
For example, physicians who pick up disability insurance as a resident at the initial $5,000/mo. of benefit can increase benefit up to $20,000/mo. (with most carriers) once out in practice with no medical questions asked. In order to qualify for that additional 10k/month, you simply have to show proof of income and no medical questions are asked.
This is a big reason to pick up physician disability insurance earlier rather than later … Even if you have had a change of health from when you initially picked up physician disability insurance as a PGY 1, you locked your previous health and no medical questions are asked when you go to purchase more disability benefit.
The “other riders”
These are the other riders that we include on the physician disability insurance comparison summary
RESIDUAL AND RECOVERY DISABILITY BENEFIT:
3/4 of claims are considered partial claims, meaning you can still do most of your daily duties but are limited in terms of workload. (think back injury or severe migraines).
Having a quality Residual and Recovery Benefit is important, especially one that does NOT require Total Disability first (like most Group or Association disability insurance policies). Said another way, some disability insurance policies require that you are totally disabled for 90 days…. then for doctors who could come back to work in a limited capacity - that would qualify for a ‘partial claim.’ We include a true residual and recovery benefit to all of our disability insurance quotes and comparison summaries that does not require you to be totally disabled before qualifying for a partial claim.
NON-CANCELABLE AND GUARANTEED RENEWABLE:
These two combined will have the greatest guarantees. This means your policy can never be taken from you (unless you don’t pay premiums), the definitions can never be changed on you, and your premiums can never be increased.
Common Misconception: Our doctors think that this means they are unable to cancel their policy at any time. Non-Cancelable refers to THE CARRIERS’ ability to cancel your disability insurance policy, or in this case their inability to cancel it.
COST OF LIVING ADJUSTMENT (COLA):
This is an important disability insurance feature, especially doctors that are under the age of 45. For doctors that are on disability claim for an extended period of time, the amount of ‘things’ (purchasing power) you can buy with your monthly disability benefit over time will decrease because the things around you get more expensive (due to inflation). The more earning years you have in front of you, the more important this is.
With the COLA feature, your monthly benefits will keep up with inflation while on claim. There are varying levels of COLA (3%, 6%, 7%). At a minimum, we typically add on the 3% COLA, which means that once you go on claim, your disability benefit will increase 3% per year to keep with inflation.
Additional Features that we did not include in your Physician Disability Insurance comparison summary:
Please check out our additional disability insurance features page to learn more about features that most our physicians will add to their disability insurance policy on top of the basic plan mapped out above.
We are here to help
For physicians who have already had their disability insurance quote ran by one of our risk management specialists, feel free to ask any questions that you still might have. Check out our blog here if you would like to dive deeper into our most common questions from our doctors.
The next step in the process would be to apply with the carrier offering the type of disability insurance that’s right for you. There is no obligation on your end when applying, we are simply looking for a formal offer and verifying price (refer to our timeline above). We will walk you through the entire process and review the offer with you once we have it.
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