Physician Disability Insurance

Physician heal thyself. Good advice but not always easy to achieve. What will you do if you are not able to work because of an injury or illness? Physician disability insurance is the insurance coverage you need to have in place in order to protect you and your family against catastrophic loss. There are some factors that go into the premium calculations for this type of insurance coverage. They are:

• Current health of the Physician
• Health history
• Medical specialty
• Duties within your specialty
• State of residence

According to Physician's News Digest these factors are extremely important in that the disability insurance industry continues to experience corporate mergers, higher-than-expected claim rates and, as a result, scaled-back features and benefits. Also, due to the industry's strict adherence to underwriting guidelines more and more applications are being declined or issued with some modifications to the insurance coverage. This has led to two other types of doctor disability insurance: Business Overhead Expense (BOE) insurance and Disability Buy/Out (DBO) insurance.

In regard to "own occupation: insurance, further segmenting of the physician market has split doctors into those whose duties involve invasive procedure and those who do not. That means that a non-invasive cardiologist will pay lower disability insurance premiums than a cardiologist that performs invasive procedures. What is "own occupation" coverage for physicians? It is coverage that begins only when a disabled person chooses to earn income from a new occupation or profession. This means that if the disability insurance policy contains this clause or rider, disability benefits are not reduced by income earned from another job. In the absence of this type of coverage, most carriers will only pay a benefit that is equal to the proportional amount of "lost earnings."

As an example, if a doctor is making $15,000 a month and has a disability insurance plan that pays $6000 a month and, after a covered disability event, is also making $5000 a month from another unrelated job the disability benefit of $6000 will still be paid since the doctor cannot perform his or her own occupation. If the physician didn't have an "own-occ" plan in effect her loss of earnings or "LE" plan would pay 2/3 of her benefit, or $4000, since her income has dropped to 2/3 of its normal amount.