One great thing about insurance products is that they keep evolving at frequent intervals and every new product is designed to meet some risk factor that was not covered adequately earlier. One such healthcare professionals insurance product is the group life and accident death & dismemberment (AD&D) policy that insurance carriers covering disability offer. Such a group life policy offers some really good benefits – for instance, if you are terminally ill, you would be allowed to partially access your death benefit during your lifetime. It also waives your premium when you meet the required criteria of the policy. The AD&D benefits are also added to this policy and the combination gives you good additional coverage over your individual policy.
Advantages of a group long term policy
While it is true that a standard long term disability insurance policy is the best option for a doctor, there could be coverage inadequacy with time as your income increases. When you also have a group long term policy as well, the coverage gap is reduced at minimum cost.
If you want coverage against terminal illness or accidental death and dismemberment, a group life and AD&D policy would be ideal. Group policies can complement a standard individual doctors disability insurance and close the coverage gap. However, if you want comprehensive coverage, you will need the long term individual policy as your main cover against disability.
The main cause of disability is illness not accidents
It is true that accidental death and dismemberment cause disability but records show that just one out of every ten cases of disability is due to accidental injury. Nine out of ten cases of disability are due to illnesses. Hence, a group life and AD&D policy can be a good back up to your main individual disability policy but it cannot replace it.
When seeking disability insurance services, you need to keep in mind that the main risk is inability to work and earn a livelihood due to disability. That means you should get the benefits for the entire duration of your disability and it should be adequate. Records show that the average duration of disability in the United States is over 31 months, which only an individual long term policy can cover adequately.
Aim for adequacy rather than total income replacement
When buying physicians disability insurance you need to have your priorities right. That means, your main objective is adequate income replacement. If your individual long term policy along with all the riders as well as a short term policy to neutralize the elimination period does not cover you adequately, consolidate your policy.
One way of doing that is to stack up additional policies with your individual healthcare professionals disability insurance. However, you must keep the cost of additional coverage within normal limits so that it doesn’t become stressful. The additional coverage is just for the purpose of reducing the coverage gap.
The issue of coverage gap arises with higher income groups of which, doctors are a part. As you advance in your career, your income, which is already higher than peers in most other professions, increases even more. Most disability companies have a cap on the amount of coverage they offer and that leaves a gap in coverage for the individuals with higher incomes such as experienced doctors. Insurance stacking helps you close that gap considerably.