Making the Optimal Choice for Your Insurance Coverage

Although doctors often play a larger-than-life role in the wellness of their patients, physicians are mortal and will inevitably have to face their own health risks at some point. Despite the tremendous value of a physician’s nest egg, most of their financial security can be derived from their ability to work.

According to Larry Keller, CFP, founder of Physician Financial Services in Long Island,  physicians are best suited to face the fear and uncertainty of their own mortality by choosing amongst term life coverage, disability insurance, and personal liability umbrella policies (PLUPs) for their optimal insurance plan.

The most commonly purchased term life insurance policies usually range anywhere from 5- to 30-year terms. Keller finds that term life insurance is particularly beneficial for married physicians and those with children (or other dependents) who might rely on their income. It is also necessary for physicians with a known family history of certain illnesses or conditions. More specifically, he suggests that physicians opt for either level term or level premium policies, both of which have fixed premiums and fixed death benefits.

Investing in an Own-Occupation Disability Insurance Policy Is Key

Physicians may also choose a ladder term life coverage policy, where they enroll in a number of policies that offer different payouts and term lengths during various life stages, thereby arranging for precise financial protection as doctors advance in their careers. Another term life option is universal insurance, but Keller only recommends that for those who want to leave money to a charity, those who have a dependent with a disability (warranting life-long financial support), or those who earn beyond $20 million and are trying to save on taxes.

Given that much of a physician’s financial security rests in their ability to do their job, investing in an own-occupation disability insurance policy is an essential strategy for ensuring that doctors can collect money, even if they are unable to work. According to Keller, if physicians rely solely on their employer’s group policy, they are at the mercy of that policy’s ruling. In other words, if a group policy determines that an injured (or otherwise ailing) physician is not disabled, that physician will not receive any payments.

However, if that physician has an individual own-occupation disability insurance policy, they will still receive benefits. What’s more, whereas group policies reduce payouts for recipients of other benefits like social security and disability, own-occupation policies do not.