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What is your most valuable asset? For most of us, it’s our ability to generate a paycheck. Physicians and other health care professionals can earn millions of dollars over the course of their professional careers, and this income provides our lifestyles. You should pay special attention to your personal disability insurance coverage. If you suffer from a prolonged injury or illness and need to use this important insurance, your claim will be governed by this contract.
Personal disability plans should be reviewed periodically because incomes and lifestyles change during our professional careers. You can self-insure or purchase coverage from an expert who knows how to tailor a program to your specific needs. Earned income is a multi-million dollar asset. If you are suffering from an injury or illness, you need a lawyer to help you when you need it most. Are you totally disabled or are you returning to work? What if you have a relapse? This is when a great agent can help you learn about your options and provide assistance.
So what are you looking for in high quality personal disability insurance? Most physicians and other health care professionals want a contract with a definition of disability in their specialty practice of medicine. But there are other very important characteristics of the contract that must be taken into account. What is the definition of residual disability? Do i need recovery benefits? Do I get an increase in the cost of living if I am totally disabled? Can the price of my insurance increase or can the cover be canceled during my professional career?
When are disability strikes ready? How will you continue to pay for your mortgage, car, and other monthly expenses? Does your retirement contribution stop? Could you pay off student loans? There are options in these contracts that will pay off your loans, retirement plans, and other expenses in the event of an injury or disabling illness. Most of the claims are illnesses, not injuries and suffering a long term income reduction could be devastating.
If you own or buy a Firm, you have become a Business Owner, this offers an opportunity and presents an increased risk. As an owner, if you were to suffer a crippling injury or prolonged illness for 60 days or 180 days and you were unable to work, would you sell or could you return? Or more importantly, how much is it worth? These are important considerations. Do you have a succession plan?
There are several important ways to protect your practice from Primary Physician Disability. One idea is the insurance of tax-deductible overheads. This will reimburse the office for expenses incurred to help with employee salaries, temporary physician replacement if needed, rent, utilities, equipment / rental costs, malpractice. Once the accounts receivable are depleted, how would you go about sustaining the business while you decide whether or not you can come back?
If there are multiple owners, there are important procedures that must be followed to maintain the health of the organization that is the shared business. A carefully drafted partnership agreement is essential and should be regularly reviewed. What are the arrangements in the event of injury or illness? How long do the remaining healthy partners cover for someone who is not contributing financially? What if a partner with a disability only works part time and suffers from relapses? Are you responsible if they are not 100% healthy?
As a business owner, it would be wise to create the exit ramp and buyout for a disabled partner. This agreement may allow a return to work which may include relapses, setbacks or full recovery for a disabled physician and partner. Practice will work best if these important guidelines are put in place before a disabling event, written down and communicated. These are easy prevention strategies that pay off, can be tax-efficient, and benefit everyone involved.
Summer Westerbur, founder of Kairos Insurance Group, is experienced in all types of insurance including employee benefits, product liability, general liability, professional liability and building insurance. Kairos has also expanded to include a Cannabis division to address the unique challenges facing the cannabis industry and its employees. for more information, contact [email protected] or call (719) 331-1832.
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