Disability insurance ensures that doctors continue to get income when they get injured or become unwell deeming then unable to carry out the regular activities. A disability income is not the same as the usual wage/salary but is calculated on a certain percentage of the salary. It is one of the most expensive insurances due to its high demand, and remarkable benefits.
Look for these features in disability insurance:
Favorable Renewability Feature
Do not accept any that does not include a renewable element, irrespective of its price. That policy will only be good for the insuring company, and not you. It allows the company to cancel the agreement anytime or even raise the premiums amount without your acknowledge. A good insurance policy should be non-cancellable- meaning no party can end it with informing the other.
Since the inflation affects money value over time, the inflation protection feature becomes desirable only if it fits your budget. It increases the policy benefits by presetting of the annual purchasing power (If you worry about the longevity and the inflation risks, then disability insurance is the best investment for you).
Competitive monthly benefit
If you come across an insurance agent selling disability insurance which pays 15% or less of your basic salary, with a less than 15% payments of your salary, avoid it. A viable policy should provide between 50-60% of the wage you were getting before you became disabled. Still, you can get a benefit of up to 70% if you buy multiple disability policies.
Appropriate waiting period
Generally, you need a policy which specifies a waiting period of 6 months after the onset of your insurance. Keep in mind that a shorter waiting period might cost you more than the long one. Although some policies may pay you for 2-3 years, the more extended benefit period is the best-up to the age of 65.
A disability may occur when you are still young and become a permanent or long term. This means that the best time to take this coverage is during your young working years provided that the insurance fits your budget.
Employer group plans
The best disability insurance should have employer group plans. Employers bear the disability insurance costs for their workers through specific group coverage plans. The group plans which are paid by the workers are less costly than the individual policies. Insurance companies price their policies depending on the work plans for employment hazards. Office workers pay a lesser amount than the construction workers. For instance, benefits payable to the employee are not taxed, but those paid by the employer are taxed.
The bottom line
Disability insurance is essential, although many physicians don’t bother to purchase it. That’s risky because anything can happen and stop you from going to work. The insurance may not replace your regular paycheck, but it will at least cater for half of your expenses. Buy it today, and have your risks catered for.
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