The most valuable asset for almost every dermatologist is their ability to do their job, because their future income is significant and measurable. To protect this wealth for themselves and their dependents, dermatologists rely on disability and life insurance as “asset protectors”. Young dermatologists should protect these devices early in their careers, and established doctors should regularly review their existing insurance policies to ensure they maintain the necessary protection.
In part 1 of this two-part series, we’ll look at what doctors need to know about disability insurance, and we’ll cover life insurance in part 2.
THE NEED FOR DISABLED INSULATION
The disability of the family caregiver can be more costly to the family than an untimely death. With many disability cases, medical care alone can cost hundreds of dollars a day, adding up to even more when expenses are reduced or eliminated.
SERVICES PROVIDED BY SERVICE AT ALL TIMES
If you are an employee of a university, hospital, or dermatology major, your employer may offer you long-term care. Group disability, however, often limits the duration of treatment or the amount of benefits paid. For example, benefits may last only a few years or payments may be a small portion of your annual compensation. Since this is usually an employer-paid benefit, the income you received while on disability will be taxed. Additionally, coverage by an employer or disability group can be terminated at any time and for any reason, leaving you without coverage.
GETTING THE BEST FINANCIAL WORK: YOUR PERSONAL HEALTH
Because many doctors do not have access to group disability insurance and group coverage may seem non-existent when needed, all blind professionals should consider disability insurance to protect their future earnings. When evaluating disability insurance options, it is important to work with a reputable and experienced insurance advisor, who can help you with answers to the following questions:
1. WHAT IS THE PROFIT?
Most policies are priced at a benefit rate that equates to 60% of the premium. You should ask yourself how much money your family will need if you become disabled.
2. WHAT IS THE WAITING PERIOD (EXPIRE TIME)?
This is the length of time you must be disabled before the insurance company will pay you disability benefits. The longer you wait for benefits to start, the lower your down payment will be. Basically, the waiting period is like a deductible relative to time—you pay your premiums during the waiting period, then the insurance company kicks in from there.
3. HOW LONG CAN THE TRAINING BE?
It’s best to get a benefit period that lasts until Social Security payments start, sometime between ages 62 and 70. Unless you’re too young to qualify for Social Security, a plan that provides lifetime benefits, at a premium, usually doesn’t need to be extended.
4. WHAT IS THE GENERAL DEFINITION OF WEIGHT?
Definitions vary from insurance company to insurance company, and from policy to policy within the same company. The definition of disability used in the policy is very important. The main categories are your work, any work, and waste. Self-employment policies, which are beneficial if you are unable to continue your work (even if you can continue to work after the disability), are all.
5. DOES THE POLICY PROVIDE ITS OTHER BENEFITS?
If you work part-time instead of the hours you used to work, will you receive benefits? Unless your policy states that you are entitled to partial benefits, you will receive nothing unless you are unable to work. Also, are partial benefits paid if you return to work and experience a reduction in your income because you are no longer able to do what you were able to do before you became disabled?
6. ARE BUSINESS FINANCES PROVIDED?
If you are the owner, whether you have $10,000 or $20,000 a month in disability benefits, you may not have enough to cover the costs of your lost and operating expenses.
7. IS IT EASY OR WITH ADD-ONS?
The difference between these words is very important. If this process is not possible, you will pay a fixed amount for the duration of the contract and your payment will not progress. If it is an extended warranty, the policy may not be valid but your premium may go up. It is best to look for a plan that is fail-safe and guaranteed to be renewed.
8. HOW FINANCIALLY IS THE INSURANCE COMPANY?
Before buying a policy, check your insurance policy’s financial condition.
The benefit of the dermatologist’s future income is a valuable asset that needs protection, both for the doctor and for the dependents who depend on the income. Dermatologists rely on disability and life insurance to protect these items and should purchase these policies early in their career. Here, in part 1 of a two-part series, we focused on what doctors need to know about disability insurance. We will cover life insurance in part 2.
Jason O’Dell is a financial advisor, insurance professional, and partner at the wealth management firm OJM Group (www.ojmgroup.com) in Cincinnati, Ohio. Michael Lewellen is a partner and director of financial planning at OJM Group.
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