Disability Insurance for Doctors
Doctors have traditionally been a major market for disability insurance, and for good reason. Doctors have an income worth protecting. They also have a demanding job, and a disability could prevent them from fulfilling their work duties. Disability insurance for doctors provides critical coverage.
How Many Doctors Are There?
The U.S. Bureau of Labor Statistics (BLS) says there were 761,700 physician and surgeon jobs as of 2021. Family medicine was the most common specialty, with 112,200 doctors specializing in this area. Other specialties include anesthesiology, radiology, psychiatry, cardiology, orthopedic surgery, dermatology and many others. Just over half of all physicians work in an office setting, while 25% work in a hospital setting. Additionally, 6% of physicians are considered self-employed.
As the population grows and ages, demand for doctors will increase. The Association of American Medical Colleges (AAMC) says more doctors are needed, and that there may be a shortage of up to 139,000 physicians by 2033. More than half of all doctors are over the age of 50, so new doctors will be needed as the older doctors retire.
These new doctors will need disability insurance.
Disability Insurance for Doctors
Doctors have traditionally been a major market for disability insurance, and for good reason. Doctors have an income worth protecting. They also have a demanding job, and a disability could prevent them from fulfilling their work duties. Disability insurance for doctors provides critical coverage.
How Many Doctors Are There?
The U.S. Bureau of Labor Statistics (BLS) says there were 761,700 physician and surgeon jobs as of 2021. Family medicine was the most common specialty, with 112,200 doctors specializing in this area. Other specialties include anesthesiology, radiology, psychiatry, cardiology, orthopedic surgery, dermatology and many others. Just over half of all physicians work in an office setting, while 25% work in a hospital setting. Additionally, 6% of physicians are considered self-employed.
As the population grows and ages, demand for doctors will increase. The Association of American Medical Colleges (AAMC) says more doctors are needed, and that there may be a shortage of up to 139,000 physicians by 2033. More than half of all doctors are over the age of 50, so new doctors will be needed as the older doctors retire.
These new doctors will need disability insurance.
Doctors Need Disability Insurance Coverage
A doctor’s paycheck is a valuable asset, so it makes sense to protect it with physician disability insurance. BLS says that physicians and surgeons earned an average annual wage of $208,000 in 2021, well above the average median pay of $45,760 for all occupations.
Doctors also tend to have financial obligations. They may have families who depend on their income, and they may also have a mortgage, car loans and other bills to pay. Many doctors also have a substantial amount of student loan debt. The Education Data Initiative says 73% of medical school graduates have student loan debt, and the average medical school graduate has $250,990 in total student loan debt.
If a disability takes a doctor out of the workforce, they’re going to be stuck with the debt and financial obligations, but they won’t be able to earn an income anymore. Disability insurance provides protection by replacing a portion of the regular income during periods of disability, per the terms of the disability insurance policy.
The Social Security Administration says that one in four of today’s 20-year-olds will become disabled before turning 67. Disability is a real possibility that doctors should prepare for. Additionally, because doctors often have very demanding jobs, a disability might be severe enough to keep them from working without being severe enough to qualify them for Social Security Disability Benefits. In fact, the Social Security Administration says that only about one-third of disability insurance applications are ever approved due to the very strict eligibility requirements.
Long-Term Disability Insurance and Individual Disability Insurance
Some workers receive long-term disability insurance and short-term disability insurance through an employer. These benefits can be useful, but they are also limited. Group disability insurance may not be customizable or portable, meaning that workers can’t select the terms they need or take coverage with them when they change jobs.
Doctors have invested heavily into their careers. The best way to protect that investment is to purchase private disability insurance. It is possible to supplement job-based group disability insurance with a disability policy that you buy on your own.
Own-Occupation and Specialty-Specific Disability Insurance for Doctors
When doctors buy individual disability insurance from a disability insurance company, they have many options to choose from. One of the most critical differences involves the definition of disability.
An any-occupation disability insurance policy will only pay benefits if the policyholder’s disability prevents them from working in any occupation they’re reasonably suited for. An own-occupation disability insurance policy will pay benefits if they can no longer work in their regular occupation due to disability, even if they could switch to another occupation. Specialty-specific coverage defines the occupation at the specialty level, recognizing that an orthopedic surgeon is not the same as a family doctor, for example, even though they’re both physicians. With a true own-occupation disability insurance policy, the policyholder can continue to receive benefits even if they accept a position in a different occupation that doesn’t pay as well.
These nuances don’t matter for all workers, but they’re critical for doctors. When looking for disability insurance for physicians, look for an own-occupation definition that’s specialty-specific.
Some medical specialties earn significantly more than others. The 2021 Physician Compensation Report from Doximity shows that neurosurgeons are the top earnings, raking in an average of $773,201 a year. Thoracic surgeons earn $684,663 on average, orthopedic surgeons earn $633,620 on average and plastic surgeons earn $556,698 on average. On the other end of the spectrum, pediatric infectious disease specialists only earn $210,844 a year on average – that’s still a very respectable income, but it’s only a fraction of what top surgeons bring in. Family medicine specialists earn $273,865 on average.
So what happens if a neurosurgeon experiences a health condition that negatively affects their manual dexterity? They can still practice medicine, but they can no longer perform sensitive surgeries safely. If they switch to family medicine, their paycheck could drop from $773,201 to $273,865 a year. That’s a pay reduction of almost $500,000.
With some types of disability insurance policies, a physician in this situation would not qualify for monthly disability benefits. However, with true own-occupation, specialty-specific disability insurance, it’s possible to qualify for benefits in this type of situation.
Mental and Substance Abuse Coverage for Doctors
Another issue to consider when shopping for disability insurance for doctors is whether the disability income insurance policy covers mental and substance use disorders.
Some disability policies exclude nervous and substance use disorders from coverage, but others provide benefits for these conditions. There may also be separate benefit periods for nervous and substance abuse disorders.
A policy that covers mental and substance use disorders will typically cost more than a policy that does not. However, doctors may want to think twice before accepting a policy that limits or excludes this coverage. The state licensing board may revoke a doctor’s license if the doctor is determined to be unfit to practice medicine due to a mental health or substance use disorder. At the same time, doctors are vulnerable to depression, anxiety and other metal health issues because of the stressful nature of medicine.
Disability Income Insurance for Other Medical Workers
Doctors need disability insurance, but so do other medical professionals. When serving the doctor disability insurance market, insurance agents should also consider the needs of these workers:
- Medical Residents: These doctors-in-training have finished medical school, and now they’ll spend several years in a post-graduate training program. They haven’t reached their full income potential yet, but they are earning a paycheck that’s worth protecting.
- Nurses: BLS says that nurses earn an average of $77,600 a year. Traveling nurses and nurse practitioners can earn even more.
- Physician Assistants: BLS says that physician assistants earn an average of $77,940 a year.
Multi-Life and Guaranteed Standard Issue Disability Insurance for Doctors
A multi-life disability insurance discount may be available when multiple people with the same employer buy disability insurance. These groups may also be eligible for guaranteed standard issue disability insurance, which simplifies the underwriting process.
The group doesn’t need to include only doctors. If you have nurses, office mangers and assistants who also need coverage, they can be part of the group as long as they have the same employer.
If you’re selling disability insurance to a medical practice, see if multiple people are interested in buying disability insurance. If they’re on the fence about coverage, the discount and simplified underwriting might convince them to buy.
Disability Insurance for Doctors with Their Own Practice
The American Medical Association says that 49.1% of patient care physicians work in physician-owned practices. Doctors with their own practice are also business owners, and that means they need additional disability insurance products to protect their business. They may be interested in business overhead expense disability insurance, bank loan disability insurance and buy-sell disability insurance.
Comparing Disability Insurance Companies
Doctors need quality disability insurance with the right definitions of disability, monthly benefit amounts, elimination period, benefit period and riders to meet their needs.
Many different disability insurance companies offer disability insurance that suits the needs of doctor. However, the terms and underwriting can vary, and the best disability insurance for one doctor might not be the best for another. A licensed insurance agent can help doctors compare quotes and purchase disability insurance.
Steps to Obtain Disability Insurance for Doctors
Securing disability insurance is crucial for medical professionals who want to safeguard their future income. Here’s how you can help your clients get coverage effectively:
1. Determine Their Coverage Needs
- Start by assessing how much coverage clients require.
- Consider their desired monthly benefits and the duration of payout.
- Decide on the elimination period—the interval between becoming disabled and beginning to receive benefits.
2. Consider Optional Riders
- Evaluate additional riders to enhance the policy.
- Look into options like cost-of-living adjustments, future income increases, student loan riders, and retirement protection to safeguard against inflation and changes in earnings.
3. Compare Quotes from Multiple Providers
- Use the DIS Analyzer to quickly see quotes from several insurance companies.
- Compare these disability insurance quotes.
4. Complete Your Application
- Ask your client to provide essential details such as age, gender, location, medical specialty, and job duties.
- Ensure the application is accurate and thorough.
5. Educate Your Client About the Phone Interview
- Make sure they ready for a detailed discussion about medical background and lifestyle.
- Prepare for questions regarding any risky activities or habits, such as smoking.
6. Navigate the Underwriting Process
- Clients may need to undergo medical examinations, income verification, and submission of an attending physician’s statement.
- Understand this step is vital for the insurance company to assess risk accurately.
7. Finalize the Policy
- Once the underwriting is complete, review the policy sent by the insurance provider.
- The client will begin coverage by signing the document and arranging for the first payment.
Following these steps will help ensure that your clients obtain the disability insurance coverage that best suits their professional needs, offering peace of mind and financial security.
Understanding the Student Loan Rider in Disability Insurance
The student loan rider in disability insurance is an important add-on that specifically addresses the financial burden of student loans for medical professionals when they can’t work due to a disability. This rider ensures that your client won’t fall behind on student loan payments if they’re unable to earn an income.
Key Features:
- Financial Cushion: This rider allocates funds to cover student loan obligations, providing peace of mind and financial stability during challenging times.
- Targeted Support: It is particularly beneficial for medical school graduates who often carry significant student debt.
- Stress Reduction: By continuing loan payments, this rider helps clients prevent default and damage to their credit score while recovering.
Why Consider a Student Loan Rider?
Medical professionals often accumulate substantial educational debt. In the event of an unexpected disability, managing these debts can add to the stress. The student loan rider ensures that loan payments are automatically managed, allowing doctors to focus on recovery without worrying about financial penalties or accumulated interest. Incorporating this rider into your client’s disability insurance plan could be a game-changer, offering not just financial relief but also essential peace of mind.
Are You Ready to Serve the Doctor Disability Insurance Market?
If you’re a doctor, an insurance agent can help you find coverage. Find an agent.
If you’re an insurance agent, DIS can help you serve the doctor market. Get a quote.
The following resources can help agents master the disability insurance for doctors market:
Little-Known Secrets About Selling DI to Doctors
The Disability Insurance for Doctors Sales Kit
