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KF Financial has been 'practicing' in our specialty area – disability insurance for physicians, residents and medical students – for over 15 years. Our experience gives us a vast understanding of your unique situation, its complexities, and your insurance needs.
Disability insurance has gone through drastic changes in the medical community. Ten years ago a doctor could easily obtain an own-occupation disability insurance policy that would pay very high monthly benefits in the event of a disability.
Today, there still a few companies who will offer an own-occupation disability insurance policy to a physician. Monthly benefit amounts are now available up to $15,000/month. Some companies only offer up to $7500/month.
Own-occupation is one of the most important provisions for a physician. It means that the policy will pay you a benefit if you cannot perform the substantial and material duties of your occupation (your medical specialty) EVEN IF you choose to earn income in another specialty. For example, if you are a gastroenterologist and hurt yourself, and can't practice in that specialty, the policy will pay you a benefit even if you decide to pursue another specialty or occupation. The benefit will not be offset by any income you bring in from the other specialty.
As a physician, your occupational class is determined by your medical specialty. Certain specialties are considered higher risk such as surgeons, emergency room physicians and anesthesiologists. These policies can be more expensive and in some policies, there may be a reduced period of own- occupation definitions of disability. It is important to note that the policy is based on the occupational class at the time of application, but will base the claim on your occupation at the time of claim.
KF Financial is now able to offer lifetime own-occupation insurance to physicians in all medical specialties (only to age 65 in California). Ask us about this important aspect of your disability insurance coverage.
- Your most valuable asset is your ability to bring in an income. For physicians like yourself, your future income is your payoff for all of your years of training, hard work and accumulated debt.
- You are at higher risk to become disabled in some capacity than other professionals since your job is very physically demanding.
- Your student loans do not go away if you become disabled.
- You may be in better occupational class now, giving you better rates. If you are considering a fellowship or a riskier specialty, it may make sense to purchase your policy early. Once you have your policy at lower rates, you will still be covered in your new specialty, but possibly at a reduced rate.
- You may be eligible for a group rate or discounts. This requires two or more employees at the same employer to purchase a policy. For more information about possible discounts for physicians, please contact KF Financial.
If you work for a large group or practice, you may be offered a group policy. Usually you cannot opt out of taking the policy. Group policies typically offer a limited monthly benefit (60 percent of your income to a maximum amount). Group policies can't discriminate – they must offer coverage to everyone in the group. Consequently, they often lack the important provisions of a personal policy.
- Your group policy may require you to be totally disabled and not able to work in any capacity before you can receive any benefit.
- The benefit may be taxable income to you if the employer is paying the premiums.
- Your employer may cancel your policy at any time.
- Even if you have a group policy, it is still important to consider supplementing with an individual policy.
- Your individual policy is portable and you may take it with you if/when you leave your employer.
- The policy definitions on an individual policy are usually superior (own-occupation, inflation protection).
- If you are only partially disabled, your group policy may not pay you.
- Having an individual policy protects your insurability by purchasing increase options. If your health changes, you may still purchase more coverage in the future based only on financial underwriting.
If you are concerned about paying for your disability insurance while you finish your residency or become established, there are several things we can do to reduce your premium as much as possible.
- Some companies allow a "graded" or increasing premium. This is initially less expensive and your premium will increase each year. If you wish to lock it in at a later time, you may do so on any policy anniversary.
- You may choose to simply supplement what your group policy already offers and load up your policy with increase options. This will allow you to keep your premium low during residency and still reserve the right to increase it in the future without any medical underwriting.
As a first-year physician out of residency, you have a couple options when it comes to disability insurance. You can take the first-year physician amount of $5,000 a month regardless of your income. Or, if you already have an employment agreement signed for your first year income outside of residency, we can use that agreement as income verification to issue you a higher amount of coverage now.
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