Purchasing disability insurance during medical residency is a smart idea for young physicians. Obtaining coverage during training allows one to benefit from better health, lower premiums and less financial documentation. Most of the top insurers providing high quality coverage for physicians today have special limit programs that allow residents and fellows to obtain disability insurance KY based on their level of training rather than their current income. This is advantageous for young physicians but only if the planning is done properly.
Many individuals take for granted that Social Security dis-ability benefits will be paid to them when they are no longer able to work and earn a paycheck for their small business, however, this is not generally the case. It is notoriously difficult to get the Social Security Administration (SSA) to approve your application for dis-ability benefits. In addition, when relying exclusively on Social Security, you are subject to their definition of dis-ability, their waiting period and their benefit limits.
As a small business owner, you benefit from taking the risks that all entrepreneurs accept. Your drive can directly contribute to the amount of income you're able to take from your business. Accepting the risk of Social Security taking care of you, and limiting your dis-ability income to social security levels is not an acceptable risk nor is it reflective of the actual income you could have if you have your own disability insurance policy.
The factor of health is a bit more complex than the average person would believe. The biggest risk a medical resident will run in not purchasing coverage today, is the discovery of an illness that may prevent him/her from qualifying for it in the future. However, there is also the risk of simply discovering a smaller medical condition that still allows one to purchase a Disability policy, but requires an exclusion.
Another concern when you rely on Social Security is not only will you have to wait for your application to be approved but you must also go through the SSA's waiting period of five months before benefit payments begin. When you buy your own dis-ability policy, you can determine what waiting period you're comfortable with. The longer your waiting period, the lower your premium will be as a long waiting period reduces the overall amount that the disability policy cover must pay out.
As noted, the true own-occupation definition of total disability does not forbid a person from being gainfully employed in a different occupation, while on claim. For a highly educated and skilled professional, like a physician, this can be a critical provision.
In reviewing this provision, young physicians should be sure to also inquire as to the period for which this definition is applicable. Few insurers will offer a true own-occupation definition of total dis-ability with medical specialty language for the full benefit period. For medical residents and young physicians, it is advisable to obtain only a policy that will provide this definition for the full benefit period.
Another benefit you can add to your D/I policy is guaranteed insurability benefits. This will allow you to add additional insurance amounts without going through underwriting again as this benefit guarantees your continued insurability. That means as your small business income goes up, you can mirror that increase through your disability insurance policy without worrying about how your health or age might affect your rates.
Many individuals take for granted that Social Security dis-ability benefits will be paid to them when they are no longer able to work and earn a paycheck for their small business, however, this is not generally the case. It is notoriously difficult to get the Social Security Administration (SSA) to approve your application for dis-ability benefits. In addition, when relying exclusively on Social Security, you are subject to their definition of dis-ability, their waiting period and their benefit limits.
As a small business owner, you benefit from taking the risks that all entrepreneurs accept. Your drive can directly contribute to the amount of income you're able to take from your business. Accepting the risk of Social Security taking care of you, and limiting your dis-ability income to social security levels is not an acceptable risk nor is it reflective of the actual income you could have if you have your own disability insurance policy.
The factor of health is a bit more complex than the average person would believe. The biggest risk a medical resident will run in not purchasing coverage today, is the discovery of an illness that may prevent him/her from qualifying for it in the future. However, there is also the risk of simply discovering a smaller medical condition that still allows one to purchase a Disability policy, but requires an exclusion.
Another concern when you rely on Social Security is not only will you have to wait for your application to be approved but you must also go through the SSA's waiting period of five months before benefit payments begin. When you buy your own dis-ability policy, you can determine what waiting period you're comfortable with. The longer your waiting period, the lower your premium will be as a long waiting period reduces the overall amount that the disability policy cover must pay out.
As noted, the true own-occupation definition of total disability does not forbid a person from being gainfully employed in a different occupation, while on claim. For a highly educated and skilled professional, like a physician, this can be a critical provision.
In reviewing this provision, young physicians should be sure to also inquire as to the period for which this definition is applicable. Few insurers will offer a true own-occupation definition of total dis-ability with medical specialty language for the full benefit period. For medical residents and young physicians, it is advisable to obtain only a policy that will provide this definition for the full benefit period.
Another benefit you can add to your D/I policy is guaranteed insurability benefits. This will allow you to add additional insurance amounts without going through underwriting again as this benefit guarantees your continued insurability. That means as your small business income goes up, you can mirror that increase through your disability insurance policy without worrying about how your health or age might affect your rates.
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