If you’re leaving residency and seeking your first job as a physician, there are many things you’re probably looking for: a practice or hospital with a solid reputation, an opportunity to work in your specialty, and income enough to help you pay back your medical school loans. But how should benefits figure into your assessment of a job opportunity?
“When looking for a job, people often focus on finding the job that pays the most,” financial expert Denise Appleby writes. “But, unless the difference in pay is significant, more pay does not always determine the best job offer.”1
One important benefit to consider when exploring a job opportunity, especially if you have school loans to repay and a family to support, is long-term disability insurance. Here’s one way of looking at the value of a long-term disability plan:
Let’s imagine you get two job offers: one that would pay $200,000 with no long-term disability coverage (which means no income if you get injured or sick), and another offer that would pay a little less — $195,000 — but would include a long-term disability plan that will pay you $120,000 per year (after taxes) until retirement age if you are disabled by illness or injury.
If you choose Medical Practice B and you suffer a disability, you’ll receive a sizeable benefit that will help you stay on track financially until you can start working again. While it may not seem important now, if you ever find yourself unable to work because of a disability, having that benefit to fall back on will be well worth the cost of a slightly lower income. And suffering from a disability is more likely than you may think. The probability of a white-collar worker becoming disabled for 90 days or longer between the ages of 35 and 65 is 27 percent for men and 31 percent for women.2
Besides looking for a solid long-term disability plan in a job offer, also consider the rest of the benefits package, including medical and dental benefits, other insurance coverage, and retirement plans.
Long-term disability policies offered through residency programs typically expire on June 30 after the residency is complete. Unless you can stay on your residency program’s long-term disability plan (check with your program administrator to find out), it’s a good idea to get another policy through your employer or, if you’re self-employed, to purchase an individual policy. If you’re a practice owner, consider the value of a long-term disability policy when deciding what benefits to offer your employees. Remember that a strong benefits package can help you attract and keep quality employees.
1. “Job Hunting: Higher Pay Vs. Better Benefits,” by Denise Appleby, http://www.investopedia.com/articles/retirement/09/job-retirement-benefits.asp. Accessed January 18, 2011.
2. “The Real Risk of Disability in the United States,” by Robert W. Beal, sponsored by Life and Health Insurance Foundation for Education (LIFE), http://www.lifehappens.org/pdf/Real-Risk-of-Disability-paper-FINAL.pdf. Accessed January 18, 2011.