Disability insurance is important for doctors - maybe more than any other profession. Here are the best disability insurance companies for doctors.
The occupation “doctor” covers a lot of different fields (we’ll go into how these differences affect insurance costs later). But all doctors have something in common: More than any other job, doctors need disability insurance.
Because more than any other profession, their education investment sacrifices current income for potential future return.
There are stereotypes about doctors — medical school is expensive and they get paid a lot — but they’re largely true. According to the Bureau of Labor Statistics, 2016 median pay for physicians and surgeons (the jobs that come up when you simply search for “doctor”) was more than $208,000, or over $100 an hour.
That’s a lot of money, but it’s also after getting an undergraduate degree, spending four years in medical school and then spending three to seven years in a residency program where they’re not earning much.
That’s a lot of debt building up with the payoff coming potentially a decade down the line. That’s why it’s important for doctors to buy disability insurance while they’re young. It keeps coverage affordable, and protects future income potential — and the ability to pay off debts.
All financial advisers have stories of doctors who became disabled prior to realizing their earning potential. Disability insurance can prevent future doctors from becoming cautionary tales.
|Company||30 years old||40 years old||50 years old|
|Ameritas||$136.54/mo | $1,581.20/yr||$222.34/mo | $2,578.90/yr||$350.62/mo | $4,070.43/yr|
|Guardian||$142.34/mo | $1,708.06/yr||$216.53/mo | $2,598.38/yr||$325.46/mo | $3,905.52/yr|
|Principal||$123.09/mo | $1,405.80/yr||$185.53/mo | $2,119.05/yr||$274.26/mo | $3,132.45/yr|
|The Standard||$155.80/mo | $1,780.55/yr||$264.18/mo | $3,019.13/yr||$441.85/mo | $5,049.71/yr|
|MassMutual||$137.55/mo | $1,611.28/yr||$220.72/mo | $2,572.80/yr||$358.01/mo | $4,160.00/yr|
These rates assume the applicant is a male, non-smoker in New York with a degree and an income of $100,000.
The plans offer a $5,000 benefit with a 90-day waiting period and benefits to age 65, as well as the following features:
Your exact policy and rates depend on your specific needs, so while these prices are good guidelines, talk to a licensed expert about your situation.
It’s important for doctors to have disability insurance — and to have the right kind of insurance. Here are some specific points doctors should keep in mind when they’re shopping.
True own-occupation coverage means if you can’t do all the duties of your medical speciality, you can still collect a benefit even if you are working in a different role. For example, someone who can no longer perform surgery but could work as a general hospitalist or teach would still be eligible to collect the monthly benefit and their income.
Because doctors are so specialized, a true own-occupation policy provides the maximum amount of protection.
Riders are modifications made to customize your policy. Some disability insurance riders doctors should consider are:
Disability insurance companies allow doctors to “overinsure” at various stages of their career. For example, med school students can buy a policy with a disability benefit of $2,500 even though they have no income. During residency, they can get coverage starting at $5,000 a month. It’s a good incentive to lock in your coverage early.
Our sample disability insurance policy rates above are based on a general physician applicant. But depending on your specialty, your rates may be higher or lower.
Some carriers offer you a discount on your coverage if you buy while in residency.
Many physicians start as an employee at a specific hospital but end up as a 1099 employee at multiple hospitals later in their careers. This offers benefits, like writing off expenses, but has drawbacks – specifically losing any group coverage a hospital may offer. It’s dangerous to rely on workplace insurance, because it’s tied to your employer, and for doctors — who move around a lot over the course of their careers or choose to open their own practice — it’s an even bigger risk.
Disability insurance companies realize this, so, unlike other professions, they’ll let doctors buy the maximum amount of coverage even if you have workplace coverage. That way, you’re fully protected no matter where your residency is.
You can buy a disability policy that has level premiums — they’ll stay the same for as long as you own the policy — or graded premiums that start low and increase over the life of the policy.
Graded premiums can be a good option for residents who are still on a tight budget because the initial cost will be lower, and you could subsequently convert to a level policy when your income increases. It lets you lock in coverage when you’re young, because as you get older and your health naturally deteriorates it’s harder to get the best rates. However, if you can afford it, level premiums are the most cost-effective option in the long run.
Not a doctor? Find the best disability insurance companies for your career.
Colin Lalley is the Associate Director of SEO Content at Policygenius in New York City. His writing on insurance and personal finance has appeared on Betterment, Inc, Credit Sesame, and the Council for Disability Awareness. Colin has a degree in English from the University of North Carolina at Chapel Hill.