Schechter Wealth Senior Managing Director & Principal, Jason Zimmerman, MBA, CLU, CAP, discusses the importance of long-term disability coverage for physicians in an article published July 27, 2017 for Investment News.
Considering many physicians have a lifestyle dependent upon a certain level of income and may have ownership in a practice, even a relatively minor accident or illness can interfere with their ability to practice medicine or perform surgeries, which in turn affects their financial well-being.
Zimmerman states for many doctors there is a serious gap between the benefits of traditional disability coverage and the replacement of their true income; highlighting that a basic individual disability policy typically covers only 60% to 65% of their monthly income – placing a benefits cap between $5,000 and $15,000 per month.
“These specialized and often rare high-end disability programs can fill the income gaps left by standard policies,” Zimmerman writes. “These high limit contracts have features that include benefits of up to $100,000 per month, $1 million lump sum payout and a key feature of guaranteed issue when obtained for more than three physicians in a group.”
When examining coverage options, Zimmerman says that one of the most advantageous features of the program is it can be guaranteed issue. This means that when two or more doctors are obtaining this disability insurance together, they may be able to waive the medical underwriting. Other important features of this program include: High coverage amounts, definition of total disability, residual or partial disability, recovery or transition benefits, benefit period, future increases and lump sum benefits.
“Not all disability policies are created equal,” Zimmerman writes in closing. “A high income earner like a physician shouldn’t assume they are protected against financial loss just because they have of standard group or individual disability policy.”
To read Zimmerman’s entire Investment News article on “Filling in the protection gap for high-income earning physicians,” click here.
About Schechter Wealth:
Schechter Wealth is a boutique, third-generation wealth advisory and financial services firm. For over 75 years, our multi-disciplined team consisting of JDs, CPAs, LLMs, CLUs, PFSs, CAPs, MBAs, CFA® charterholders, CFP® practitioners and CIMA® consultants have been quietly advising wealthy families on financial matters including: institutional quality investment advisory services, alternative investments, advanced life insurance planning, income and estate taxes, business succession and charitable planning.