The Cost of Physician Disability Insurance
The Cost of Physician Disability Insurance
As a physician, your life revolves around ensuring the health and well-being of others. But what about your own financial health? Have you considered safeguarding it with disability insurance? This guide will assist you in understanding the average cost of physician disability insurance and how to secure your financial future.
Understanding the Average Cost of Physician Disability Insurance
The average cost of physician disability insurance typically falls between 1% to 3% of your annual income.
For example, the premium for a policy that protects an annual salary of $350,000 the insurance cost could range from approximately $290 to $900 per month. Keep in mind that this is an approximation and your actual cost will depend on several factors such as your medical specialty, the coverage amount you want, the waiting period before you can start claiming, your age, health, and more.
Factors Influencing Physician Disability Insurance Rates
Medical Specialty
Your area of specialization can significantly impact your disability insurance’s monthly premiums. For instance, physicians engaged in high-risk specialties like surgery or podiatry might have to pay a higher premium compared to those involved in lower-risk specialties like radiology or general practice.
Coverage Amount
The amount of coverage you opt for directly influences your monthly premiums. In order to know the right amount of disability insurance you need to consider your financial obligations, existing savings, and your desired saving rate during the disability period.
Waiting Period
The waiting period is also known as the elimination period – this is the time interval between when you become disabled and when you start receiving benefits. The longer you can wait to collect benefits, the lower your premiums will be.
Definition of “Disability”
Your policy’s definition of “disability” can impact the cost. An “own-occupation” policy, which covers you if your injury or illness prevents you from working in your current specialty, is pricier compared to an “any occupation” policy, which is cheaper but requires that you can’t work in any job.
Age and Health
Younger and healthier physicians typically pay less for disability insurance. When you buy a policy at a younger age, your rates stay the same for the life of your policy. For each year you delay getting coverage, rates increase by approximately 3% to 5% per year. If you have a pre-existing condition, expect to pay more.
Location
The rules and regulations in your state and the cost of living can affect the insurance costs. More regulations often mean fewer provider options, leading to higher prices.
The Impact of Policy Riders on Costs
Policy riders, or optional add-ons, can enhance your coverage but will increase your insurance costs. Here are several common riders you would find on a physician disability insurance policy:
Cost of Living Adjustment (COLA) Rider: This rider adjusts your monthly benefit with the cost of living, ensuring your benefits increase with inflation.
Future Purchase Rider: It allows you to increase your insurance coverage in the future, regardless of health changes.
Student Loan Rider: If you’re still repaying your educational debts, this rider ensures your monthly loan payments are covered during a disability.
Catastrophic Disability Rider: This rider provides additional benefits in case you suffer a catastrophic disability.
Key Takeaways
While disability insurance isn’t cheap, it’s a small price for peace of mind and financial stability during unexpected life events. Remember that while it’s nice to have the lowest payment possible, it’s more important to select a policy that sufficiently protects your future income. At Leverage, we are committed to helping you navigate the complexity of long-term care insurance options. Request your free quotes today and let one of our licensed insurance experts find the best disability insurance policy for you.
