Use Today’s Good Health to Purchase Additional Physician Disability Income Protection in the Future
Updated: Sep 16, 2020
Many physicians purchasing a Doctor Disability Insurance policy want to protect their growing future income as well as their current income while they are in good health.
Although they can’t guarantee what their health will be like in the future, they anticipate needing additional disability protection because their income will be growing for a number of reasons:
They are new in practice
Their current practice is growing
They have just joined a profitable new partnership.
They want to hedge against Inflation
More than anyone, doctors are well aware that health can be transient. Why not use today’s good health to qualify to purchase increased disability income benefits in the future?
Future Purchase Option A Future Purchase Option protects your right to increase the amount of Physician’s Disability Income Protection you have – even if your health should change. While different disability insurance providers have slightly different stipulations, the key points are the same:
Qualify for a Physician Disability Insurance policy with “x” amount of coverage under a “y” definition of disability with “z” features.
Depending on how much disability protection you initially purchase for your base montly benefit, physicians can typically purchase a Future Increase Option (FIO) of up to 3 times that benefit depending on policy caps.
As your income increases and you become eligible for increased coverage, you can exercise all or a portion of your FIO (most commonly on the policy anniversary date, or when other coverage such as group coverage is lost).
Regardless of changes in your health, the premium for the increase is based on the policy provisions, occupation class and discounts in place on the original policy, and the physician’s current age.
All the features (“y,” and “z”) from your original policy will be honored in your benefit increase, even if they are no longer offered in the disability insurance market place.
Not only should physicians protect their current income from disability with a disability insurance policy, but they should also protect the future growth of their income by adding a Future Purchase Option (Future Increase Option). With this rider, for just pennies on the dollar, a physician receives the right to purchase additional monthly benefits in the future determined by their income at that time, but based on today’s health. In addition, policy features are always changing. A future increase rider is the best way to ensure you lock down these benefits for future purchases.
Policy Features The FIO offers you the ability to guarantee that the policy features you purchase now will be included on the benefits you purchase 5, 10 or 20 years down the road. For example, back in the 80s, disability insurance benefits could cover you for life (instead of the 65 to 70 year old range offered today). By having purchased an FIO Rider with your original policy, your future policy coverage increases would also cover you for the rest of your life. Take a look at your current policy, are there any features that you want to keep in place for the rest of your career?
Random Health Changes As a physician, you especially realize it’s impossible to predict where your health will be 5 years from now. Sometimes it is the sudden twisted knee while jogging or a slip on the ice that fractures a wrist, resulting in an exclusion of the injured area on any future policy. Other times, it may be the back pain that slowly develops, or a little lump, slight shortness of breath, or tiny tremor that turns unexpectedly into something more serious. Even a common controllable condition such as diabetes or even sleep apnea can severely curtail your ability to purchase additional physician’s disability income protection. A Future Purchase Option on your policy eliminates this worry*.
A Recent Scenario
Had this surgeon held an existing policy with a Future Increase Option, the underwriting process would not have presented any obstacles – even if there had been permanent damage!
In fact, we recently dealt with a surgeon, in great health, applying for disability insurance. While working with another agent, he was denied disability insurance. When he came to us, we learned he had recently taken his son to a parade, and like any father would do, lifted him on his shoulders so he could see. This left him with a stiff neck. He then visited a chiropractor to get this resolved, and was completely better in 2 weeks. However, because of the chiropractor’s notes for the treatment, the insurance company was only willing to cover this surgeon as long as he agreed to a complete shoulder-and-neck exclusion.
Fortunately he came to us and we were able to resolve this situation and get his policy issued without exclusions. However, had this physician held an existing policy with an Future Increase Option, the underwriting process would not have presented any obstacles – even if there had been permanent damage to his neck! This “random” situation happens far more frequently than you may think.
By purchasing a doctor’s disability insurance policy, you are being proactive and planning ahead. Be sure your plan includes the ability to protect your income as it grows.
Please feel free to contact us any time for a consultation or no obligation policy review. Find out for yourself if your physician’s disability income policy can grow with your income.
*Increased benefits are payable for future claims only.