The profession of caring for people is full of risks. Physicians and doctors need to address the different exposures that are inherent in the medical profession. Most doctors however overlook certain types of insurance.
Some of these insurance covers can protect doctors’ assets and livelihood in case of any uncertainties in life. The financial catastrophes doctors must insure against include disability, illness or injury, personal and professional lawsuits, and death. Here are different types of insurance covers that doctors and physicians should have.
1. Disability insurance
As a doctor, your income is dependent on your ability to work. You are your most valuable asset. If for any reason you’re unable to work or you lost your job, your entire financial plan would come tumbling down. According to PhysiciansThrive, it is essential for physicians earning more than $200,000 annual salary to have disability insurance.
Imagine 25% of 20-year-olds become disabled before attaining retirement age. Disabilities like disabling accidents or long-term illnesses could take away a doctor’s career. Closer home, 30% of physicians miss out on their income due to injuries and unexpected sicknesses in their careers.
Disability insurance provides income to doctors in case they are unable to work due to illnesses or injury. Doctors can use disability benefits to pay for mortgages, loan payments, utilities, and personal expenses.
This insurance cover will protect them and their families by providing a part of their income to insulate them during any tough financial times. Some of the disabilities covered with disability insurance include broken bones, hand injuries, vision loss, and even pregnancy.
2. Life insurance
The main role of life insurance for doctors is to provide income to their dependents in case of their death. Life insurance covers death by any cause. There are usually no exclusions applied to life insurance policies. However, suicide and death due to self-harm are not covered in the first year of the life insurance policy. Benefits from life insurance can be used to cover funeral expenses, pay for children’s education and to pay any outstanding debt.
There are two life insurance options: term life insurance and permanent insurance.
- Term life insurance: This insurance cover lasts for a pre-set period like 5, 10, or 20 years. It is very affordable and in case of death of the insured party before the set period elapses, beneficiaries receive tax-free proceeds.
- Permanent insurance: This insurance cover lasts for a whole lifetime if payments are made. Upon the death of the insurer, proceeds will be directed to the beneficiaries. Permanent insurance accumulates cash value which can be withdrawn or even borrowed against. A permanent insurance option can either be participating or whole life. Participating in whole life insurance accumulates savings from the insurance company’s profits. But, in universal life insurance, the insured has the power to manage the investment component themselves or with help of their financial advisor.
3. Malpractice insurance
Doctors provide routine health care to individuals with many different conditions. Every day they face many complex challenges that need to be resolved in a timely manner. Mistakes can therefore happen, and this leads to lawsuits. Research has shown that 99% of physicians face at least one lawsuit by the age of 65.
Malpractice insurance covers doctors against any claims that they were negligent when they were treating a client. The client could have ended up suffering from physical and mental harm due to the negligence.
Medical malpractice insurance is available to doctors, physicians, surgeons, consultants, and medical business entities. In the U.S. some states need all doctors to have a minimum level of malpractice insurance. These states include Connecticut, Colorado, Kansas, New Jersey, Massachusetts, Rhode Island, and Wisconsin. However, the level of malpractice insurance required varies greatly from state to state.
4. Umbrella Insurance
Given all the insurance covers doctors get, it may seem that they don’t require any additional cover. However, experts recommend a policy that will safeguard doctors against any catastrophic awards that may exceed the limits of their other covers.
Umbrella insurance is named so because of the shelter it provides for everything beneath it. It is also known as personal liability insurance. This is a backup insurance plan that is activated once all other insurance covers have been paid out. For doctors and physicians, it can cover accidents that may occur because of them or even accidents that have occurred on their premises.
Umbrella insurance also covers equipment or property that can cause harm or damage. It can protect doctors from having their assets liquidated or seized because of lawsuits that may result from their practice.
Some additional insurance covers you may want to consider as a doctor include:
- Critical illness insurance: This cover will pay the insured a tax-free lump-sum payment in case they are diagnosed with any serious illness like stroke, heart attack, or cancer. The payment which may be used for health care is made even if the insured can still work.
- Long-term care insurance: This insurance cover seems like it’s only suited for old people. However, unexpected health events and accidents can occur at any age. Even with slight health challenges, you may find it difficult to perform simple day-to-day activities. You may end up relying on family and friends to do these simple tasks. Long-term care insurance benefits can fund the cost of care, either in a facility or through at-home services, during instances where you are unable to do daily tasks due to an injury or illness.
We can never predict the unknown. As a doctor, you may experience a disability, an illness or injury, malpractice or you may even die. These unexpected events can have a huge strain on your finances or even the finances of your family.
Insurance is an important tool that can protect doctors’ finances and safeguard their finances and wealth. All doctors should have disability insurance, life insurance, malpractice insurance, and umbrella insurance. Doctors should also consider purchasing critical illness and long-term care insurance covers.