How Much Disability Insurance Do I Need as a Physician?

How Much Disability Insurance Do I Need as a Physician?

Disability insurance is a vital source of financial reassurance for Physicians should you become unable to earn due to medical disability. Physicians especially may need more cover than other professionals due to the money obtained over a lifetime or even in just a couple of months. However, how much is enough?

Accidents, illness, and mental health issues can all strike even the healthiest of us unexpectedly.

Accidents, illness, and mental health issues can all strike even the healthiest of us unexpectedly. 

Disabilities can directly impact someone’s ability to continue employment, either because of incapacity to perform the role, or their ability to sustain the average number of hours. This unfortunate situation will inevitably have a direct financial impact, leaving medical workers unemployed and without income, or forced to take on a different role at lower pay.

At an already distressing time, coping with life-changing medical issues, the threat of financial instability can be devastating. A physician disability insurance plan can provide financial support when it is most needed and relieve the worry around loss of income.

How much coverage do you need?

First ask yourself this, are you worried about not being able to do any type of work, or just not being able to be a doctor and earn a high salary?

Lets use Susan as an example. Susan earns $350k a year and wants to get herself disability coverage. If she damages her wrist and can’t perform surgery anymore, she’ll be out a large salary and need to find a way to support herself.

If she decides to find a job that doesn’t require specific motor skills in her hand, then she may be able to earn enough money to support herself. Let’s say she goes and becomes a sales representative at a pharmacy. This job doesn’t entail a lot of physical work, so for the most part, she’ll be okay with limited hand abilities. Because Susan can still work, she’d only need to replace a percentage of her income. However, if she were to become injured to the point of not being able to work at all, she’d need a sizable policy to replace all of her income.

 If she damages her wrist and can’t perform surgery anymore, she’ll be out a large salary and need to find a way to support herself.

Physicians should consider what they are willing to protect themselves against. If you’re ready to live with the risk that you could become incapacitated and hope that you’d still be able to work after suffering an injury, then partial coverage is for you. If you’re more conservative and want to be protected from the worst case, full coverage will be your best option.

How Much Does Disability Insurance Cost?

Plans vary from different insurance providers, but as they all accommodate the replacement of earned income due to disability, the premiums are directly related to a person’s income. As a rule of thumb, an annual cost will be around 10%-12% of the yearly salary.

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Navin Ramchandani, MD
About the author

Dr. Navin Ramchandani is a Medical Doctor, Diagnostician and Owner of R&R Medical Centre in Barbados. He is also an Advanced Pediatric Life Support (APLS) International instructor with the Advanced Life Support Group (ALSG), and a Pediatric BASIC (Basic Assessment and Support in Intensive Care) international instructor. His passion is diagnosing and treating/helping people with complicated health issues to improve their overall health and quality of life.

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