As a doctor, your ability to earn an income is your most valuable financial asset. Disability insurance protects that income if an illness or injury prevents you from working. But how much of your income will a disability policy actually replace? Let’s break it down.
How Disability Insurance Replaces Income
Disability insurance provides a monthly benefit to help you cover your living expenses if you’re unable to work due to a disability. The amount you can receive depends on your income, your stage of career, and the policy you choose. Policies are designed to replace a portion of your income—typically 60%—to ensure you can maintain financial stability during a challenging time.
Coverage for Medical Residents and Fellows
If you’re still in training, your income may not yet reflect your full earning potential. However, disability insurance companies recognize the importance of protecting your future income.
- Monthly Benefit Limits: Residents and fellows can qualify for up to $5,000 per month in disability benefits. During your final year of training, this increases to $7,500 per month..
- Future Income Protection: Many policies include a feature called a Future Increase Option (FIO), allowing you to increase your benefit amount as your income grows, without needing to undergo medical underwriting again.
This means you can secure affordable coverage now and adjust it later to match your attending salary.
Coverage for Attendings and Dentists
Once you’ve transitioned into practice, your income significantly increases, and so do the available disability benefit amounts. Here’s what you can expect:
- Income Replacement Limits: For attendings and dentists, coverage can range from $10,000 to $30,000 per month, depending on your income and any other disability coverage you may have.
- Participation with Group Coverage: If you have employer-provided group long-term disability (LTD) insurance, your individual policy will work alongside it. Insurers typically limit the total replacement to around 60%-70% of your income, accounting for all sources of coverage. For high-earning specialists, additional riders like the Catastrophic Disability Rider or the Retirement Protection Rider can provide even more coverage in case of severe disabilities.
How to Determine Your Coverage Needs
To calculate how much income your disability insurance should replace, consider the following:
- Monthly Expenses: Factor in your mortgage, student loans, and living costs.
- Employer Coverage: Check if your workplace offers group LTD and its benefit limits.
- Future Earning Potential: As a high-income professional, you may want coverage that reflects your anticipated earnings.
Why Start Early?
Purchasing disability insurance while you’re young and healthy locks in lower rates and ensures coverage before any potential health issues arise. For residents and fellows, policies often include discounts and flexible terms that grow with your career.
Take the Next Step
Disability insurance is a critical part of your financial plan, ensuring your income—and your family’s security—is protected no matter what life brings.
If you’re ready to explore your options, reach out to a disability insurance specialist who understands the unique needs of physicians and dentists. Start protecting your income today for peace of mind tomorrow.
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