Many dermatologists begin their comparison of disability insurance policies with the premium costs, so it’s not surprising that most are taken aback by the big disparity in rates from one carrier to the next. For what you are trying to accomplish – the optimum protection of your specialty in the event of a disability – the premium should be your last concern, at least for the moment. Far more important is determining which policy will pay benefits when they are needed most, and optimizing your benefits under any circumstance.
There are five essential points of comparison in disability insurance for dermatologists:
The Carrier You Choose: The quality of your disability insurance contract, the policy definitions’ and the price you pay are all determined by the insurance company you choose. Plans vary by state as well as by the duties you perform in the course of your day. Invasive procedures matter to some carriers but don’t to others; some companies have great plans in Georgia buy lousy contracts in Florida. It’s important to get quotes from multiple companies.
“True” Own Occupation Definition of Disability: For dermatologists, nothing less than an own occupation definition that includes specialty language will be adequate. Avoid “modified own occupation” or worse yet, “any occupation” policies.
Residual Disability Benefit: Many dermatologist disabilities are partial, meaning that they only cause a reduction in income, not the complete inability to work. Unless a policy contains a residual disability benefit that will pay a partial benefit once your income falls below 15-20 percent, without requiring you to be totally disabled first (like many group plans), walk away. The reason is that many disabilities are progressive in nature (think MS or Parkinson’s). If you have to satisfy a period of total disability before collecting partial benefits, it could be years before you collect on an illness that progressively deteriorates your ability to work (and your income).
Future Income Option (FIO): Dermatologists who purchase disability policies early in their career automatically cap their benefit to the level of their income at the time of purchase. With the average physician’s income increasing at 5 percent a year (or 500% for a resident/fellow), this would quickly render their coverage inadequate. A future income option allows you to increase your monthly benefit without evidence of insurability based on your attained income at certain intervals. Some FIOs are more restrictive than others. Look for one with frequent intervals and no limits on benefit increases.
Cost of Living Adjustment (COLA): Because you can’t predict how long a disability will last, a COLA rider would be important to protect the purchasing power of your monthly benefits over a long period of disability. There are two types of COLA riders – a flat percentage increase and an increase linked to an inflation index. The last option is the most ideal option; however, it is also the most expensive.
Putting it all Together
You are likely to find variations of each of these components among the carriers, and these particular features are also among the key factors in disability insurance pricing. So comparing them along with the nuanced language that describes them is vitally important. Remember, the lowest cost disability insurance policy may be the lowest cost for a reason – one that you can’t afford in the long run.
Needless to say, without the right guidance, it can be very easy to make a costly mistake. The experienced disability specialists with Doctor Disability can provide you with a complete comparison of disability insurance for dermatologists from all of the major carriers, their key features and pricing with objective clarity. Contact us today.