Home General Doctors With Higher Incomes Need High Limits Disability Insurance to Get Adequate Benefits

Doctors With Higher Incomes Need High Limits Disability Insurance to Get Adequate Benefits

by Naveen Agarwal
Adequate Benefits

Some folks are under the impression that they can get total or near total replacement of their lost income as part of the benefits of their insurance against disability. Well, that is a difficult task with your standard individual disability insurance (IDI) policy but there are ways to get what is referred to as ‘adequate’ benefits accounting for around 60-70% of your after-tax income. It will help you to set your expectations of adequate benefits from your insurance policy when you are better informed. There are limitations in the benefits that you can get from an insurance policy covering you against disability related loss of work and income. However, there are also ways to work around such limitations at a nominal additional cost to maximize the benefits.

It’s Difficult To Get Adequate Replacement For Higher Incomes

The income replacement ratio in individual doctors’ disability insurance is proportional to your income up to a certain level. The average income of doctors in the United States is four times as much as the national per capita income. Adequate replacement of such income with a standard IDI policy becomes very difficult for the carrier.

A healthcare professionals disability insurance is perfect in terms of cost and benefits for young doctors whose incomes are high but not beyond adequate income replacement limits. However, as you grow older, more experienced and earn 6-7 figure income it becomes difficult to get adequate replacement ranging between 60-70% of such income with a standard IDI policy.

High Limits Policies Allow You To Optimize Your Benefits

There are exceptions to the rule though, and certain disability insurance services have come up with solutions to this challenge with high limits policies. The benefits could either be a lump-sum amount or paid monthly and will cover 70% of your after-tax income. For a high-income-earning doctor, that kind of coverage benefit is adequate income replacement.

It is necessary to draw the line about the utility of benefits that your physicians disability insurance fetches you. As a high-income earner, you obviously have a certain standard of living that you don’t want to compromise with even while you are disabled and not able to work and earn a livelihood. As long as the benefits pay your bills and you don’t have to dig into your savings, it’s adequate.

Get The Help Of An Insurance Broker To Select The Right Policy

Getting optimum benefits out of your standard IDI policy is not really easy if you are aiming to do it all by yourself. There are several ways of optimizing your healthcare professionals insurance through riders, stacking of insurance and choosing the most ideal carriers. While it’s not rocket science, it’s not just a straightforward reading and understanding of terms and conditions either.

It is much better to hire the services of a reliable disability insurance broker, who is an industry professional with knowledge and experience of most if not all the products in the market. However, you need to select the right broker to be assured of good professional services and the best way to go about it is to ask family and friends to refer to a broker they know to be good.

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