DISABILITY INCOME RISK FOR THE PHYSICIAN

What is your most valuable asset? For most of us it is our ability to generate a paycheck. Physicians or other medical professionals may earn millions of dollars during their working career, and this income provides our lifestyles. You should pay very close attention to your personal Disability Income coverage. If you suffer an injury or prolonged illness, and need to use this important insurance, your claim will be governed by this contract. If your disability claim gets denied, you may seek Disability Legal Services from a social security disability lawyer to help you make an appeal.

Personal Disability plans should be periodically reviewed because income and lifestyles change over our working careers. You can self-insure or purchase coverage from an expert who understands how to tailor a program for your specific needs. Earned income is a multimillion-dollar asset. If you suffer an injury or illness, you need an Advocate to help you when you need it most. Are you totally disabled or returning to work? What if you have a relapse? This is when a great agent can help you know your options and provide assistance.

So what do you look for in high quality Personal Disability Income Insurance? Most physicians and other medical professionals want a contract with a definition of disability in their specialty practice of medicine. But there are other very important contract features that need to be considered. What is the definition of residual disability? Do I need recovery benefits? Do I receive a cost of living raise if totally disabled? Can the price of my insurance increase or the coverage be canceled during my working career?

When disability strikes are you prepared? How will you continue paying your mortgage, auto, and other monthly expenses? Does your retirement contribution stop? Could you pay any student loans? There are options in these contracts that will pay your loans, retirement plans, and other expenses in the event of a disabling injury or illness. Most claims are illness not injury and suffering a long-term reduction in income could be devastating.

If you own a Practice or purchase one, you have turned into a Business Owner, this provides opportunity and presents expanded risk. As the Owner if you were to suffer from a disabling injury or prolonged illness for 60 days or 180 days and are unable to work, would you sell or could you return? Or more importantly how much is it worth? These are important considerations. Do you have a succession plan?

There are several important ways to protect your Practice from the disability of the primary Physician. One idea is tax-deductible Overhead Expense Insurance. This will reimburse the Practice for expenses incurred to help with employee salaries, temporary replacement Physician if needed, rent, utilities, equipment costs/leasing, malpractice. After accounts receivable are exhausted, how would you keep the Business going while you decide if you can return or not?

If there are multiple Owners, there are important procedures that should be followed to keep the health of the organism that is the shared business. A carefully drafted Partnership Agreement is critical and should be regularly reviewed. What are the provisions for an injury or illness? How long do the healthy remaining Partners cover for someone that is not financially contributing? What do you do if a disabled Partner is only working part time and suffering relapses? Do you have liability if they are not 100 percent healthy?

As a Business Owner it would be wise to create the exit ramp and buyout for a disabled Partner. This agreement can allow for return to work which may include relapses, setbacks or total recovery for a disabled Physician and Partner. The Practice will run better if these important guidelines are set in place prior to a disabling event, put in writing, and communicated. These are easy prevention strategies that are cost effective, can be tax favored, and benefit everyone involved.

Summer Westerbur, founder of Kairos Insurance Group, is experienced in all types of insurance including employee benefit packages, product liability, general liability, professional liability and building insurance. Kairos also has expanded to include a Cannabis Division to address the unique challenges facing the cannabis industry and its employees. For more information, contact Summer@kairosinsurancegroup.com or call (719) 331-1832.