Doctors put themselves and their medical practicesin jeopardy when they don't have disabilityinsurance. Many doctors mistakenlybuy only a group policy for their practice.They don't realize that it's just as important to have anindividual insurance policy. Group insuranceoften falls short when you need it most.
In addition, most people, including doctors, thinkthey can prevent disability by taking precautions. Thetruth is, disability is far more common than peoplethink. According to a recent Gallup survey, most peopleestimate that they have only a 16% chance ofbecoming disabled during their working years. Buthere are the startling facts:
Terms to Learn
The right disability insurance policy can help supportyour household, even if you suffer a long-term disability.But before you begin shopping for an insurance policy,you need to know what features to consider and a fewimportant definitions. Following is a list of insuranceterms you'll need to know:
As a physician, you must protect the source of yourincomeâ€”your practice. Special policies offer practiceprotection while a doctor is recovering from a disability.For example, a professional overhead expense (POE)policy can help you meet office expenses during therecovery. Benefits reimburse your practice for rent, electricity,and utilities, as well as for the interest on businessdebts and lease payments on furniture and equipment.
Physicians who are partners in a group practiceshould consider purchasing a disability buy-out (DBO)policy. In much the same way that life insurance benefitscan be used to fund a buyout, a DBO policy is designedto fund the healthy partners' purchase of the disabledpartner's share of the business. In combination with thedisabled partner's individual disability income coverageand POE policy, a DBO policy allows the business tocontinue generating an income for the healthy partners.The disabled partner is supported by the benefits fromtheir individual policy. Any continuing share of the businessexpenses is reimbursed by the disabled partner'sPOE policy until the buyout is affected.
Susan M. Baker is manager of disability sales andmarketing for Berkshire Life Insurance Company,a subsidiary of The Guardian Life InsuranceCompany of America. Ms. Baker has been in theinsurance industry since 1971 and has specializedin disability income for much of that time. She welcomesquestions or comments at 413-499-4321.