Best Disability Insurance for Doctors
Imagine a 33-year-old physician who becomes disabled after working in her own practice for a decade. Because she opted for individual disability insurance, her amount of income will not change during the extent of her disability. Even more importantly, she chose a rider on her individual disability insurance that covers her future as well as her present since her policy pays into her retirement savings as if she had continued working. The right disability insurance can protect a physician’s future.
How are these retirement contributions given, though? Individual disability insurance companies offering retirement contributions disability insurance choose to deposit the revenue into a trust account (similar to a 401(k) or an IRA that earns tax-free income. It is your choice how the money is invested since high-risk investments have a greater earning capability while low-risk investment earn a slower, more reliable income. You choose the investment option as you would a mutual fund or annuity and let the money work toward your retirement. The investments are held in the trust account until you retire or the benefit period ends, at which time you receive the income.
What about retirement benefits, though? Many insurance carriers have an either/or clause stating that a claimant can receive retirement benefits or disability benefits, but not both. It is also beneficial to ask about the age limitations on your disability insurance retirement protection since most continue only until age 65 or 67. At that point, even if you continue working, no more income is deposited into the trust account and no further money is earned toward retirement.
What Happens If I Start Working Again?
In the event that you begin working again, whether in your chosen field or in another position, contributions from your retirement account will revert to your personal income rather than the retirement contributions disability insurance.
When it comes to disability insurance, the future benefits can be substantial. A young physician has an earning capacity of several million dollars, which means retirement savings could take a direct hit with either group or association disability insurance; most do not offer a retirement contributions disability rider. Company-provided group insurance or private association disability insurance generally will not pay into retirement. Even if a disability occurs much later in a physician’s career, the loss of potential retirement funds is significant with losses of tens of thousands of dollars.
It is well worth it for you to invest in True Own Specialty Disability Insurance while you are young and healthy and the rates are low, rather than face the consequences of a Group or Association policy and finding your retirement funds depleted because of a long-term disability.
To speak to one of our True Own Speciality Disability insurance coverage specialists, give us a call at 800-997-0148 or