A couple of seasons ago, I tore my ACL while skiing a flat corduroy groomer. I was devastated, not only because I couldn’t ski or run for the rest of the year but also because I was not able to see patients until I could get back on my feet.
I had surgery right after my injury and was in physical therapy for months. Hobbling around an ER was out of the question. Not being able to work, be independent, or able to engage in the outdoor hobbies that I love created a world of difficulty, not to mention financial instability.
The importance of having the right insurance
During this time, I collected short-term disability, which meant I had enough money to cover my living expenses and my student loan payment.
However, my short-term disability insurance only covered 60% of my salary, so I was forced to cut back on spending. I also couldn’t contribute to the stock market, my retirement, or my savings accounts.
Although I was beyond grateful I was able to cover my bills without tapping into my savings (or worse, go into debt) I was lucky that I did not need to access long-term disability—something I quickly found out I didn't even have access to.
The more research I did into disability insurance, the more I realized how underinsured I was. I nearly dodged a bullet that could have affected my entire future and financial stability. Here’s how you can do the same if it happens to you.
Protecting your income
When we think of disabilities, we often think of injuries such as broken bones, hearing loss, vision loss, inability to walk, and similar. However, the majority of disabilities are related to medical illness. As a physician, becoming extremely ill or injured impacts your ability to care for patients, and as a result, you most likely will have to take some time off work, meaning you won’t be earning a paycheck.
Protecting your income as a physician is extremely important, and disability insurance is one of the most important types of insurance. If you become sick or injured and have to take a step away from your work or end your career early, disability insurance can save you from the grief of potentially losing future financial security, especially if retirement is still many years away.
"Every high earner should have a disability insurance policy, because your ability to work and earn a living is your greatest asset."
— Kristen Fuller, MD
Protecting your emotional well-being
If you become injured or ill and require long-term disability, you may face resistance from your employer about going on long-term disability, as they most likely do not want to pay for this. As a result, you may have to use all of your PTO and short-term disability before your long-term disability kicks in, and during this time, you may feel pressure from your employer to resign.
From a cost perspective, your employer would rather have you resign than leave your job on long-term disability. If you are experiencing this pressure from your employer, contact your HR department or an attorney specializing in disability law.
The mental and emotional effects associated with disability can be heavy. Having a solid support system and considering therapy is essential. This journey can be cumbersome—as physicians, our identities are often tied to our careers, so it is important to take care of yourself, be resilient, find happiness through other outlets, and take things one step at a time.
The quick and dirty of disability insurance
Short-term vs long-term disability
An article in Family Practice Management provides a practical guide to disability insurance for physicians.
Short-term disability covers temporary illnesses or injuries for physicians who are expected to recover and return to work fully. They generally pay out immediately and can last, on average, for 3–6 months, with some policies up to 2 years. Your employer most likely offers short-term disability insurance, and although this can be a financially stressful time, it usually does not impact your long-term future or retirement.
Long-term disability generally takes a few weeks to months to pay out due to the waiting period. Still, it then continues to pay you a monthly benefit until age 65, 67, or 70, depending on the policy, assuming you can no longer return to your specific line of work or can no longer make your total income. As a result, it is recommended that physicians take out an extra policy for long-term disability.
This is the gold-standard policy for physicians, because if you are not able to work in your specialty due to an illness or an injury, your plan will pay out, even if you can work in another occupation/specialty to earn a living.
This is known as an “own occupation” policy (as opposed to an “any occupation” policy), according to the authors of the Family Practice Management guide. These are the key words to look for in the policy: “You are not able to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation.”
The authors write: “A newly disabled physician who takes a different job with a lower salary will still usually have that salary subtracted from disability benefits, but the combination of the two should keep the physician financially whole. With an ‘any occupation’ policy, a physician who can take a different job may lose benefits entirely.”
These are additional features of insurance policies that may or may not cost an additional premium. There are a few “important riders” that physicians must look into/carry:
Residual/partial disability covers partial disability and provides some benefits as you recover from your illness/injury. Long-term disability plans often don’t cover partial disability if you can still make a tiny fraction of your income (20%), so this rider is important.
Inflation protection is essential for younger physicians in their 30s and 40s, as it indexes your benefits to inflation.
Future purchase options are especially important for residents or physicians in the early years of their careers who currently cannot afford to purchase as much coverage as they need but have a higher earning potential in years to come. This rider will allow you to buy additional coverage in the future without opening a new policy and having to go through the underwriting process again.
As a rule of thumb, you want at least one personal disability insurance policy, because group policies through your employer will often subtract benefits from other group disability sources like medical association policies and Social Security disability payments.
On the other hand, personal disability insurance policies rarely ever subtract from group policy benefits. You are best protected with an individual disability plan with riders and your employer-covered (group) disability plan.
Most disability insurance does not cover mental health or addiction, so if you have struggled with these in the past, you may want to consider carrying a more comprehensive policy.
Each week in our "Real Talk" series, mental health advocate Kristen Fuller, MD, shares straight talk about situations that affect the mental and emotional health of today's healthcare providers. Each column offers key insights to help you navigate these challenging experiences. We invite you to submit a topic you'd like to see covered.