If you are a high-earning physician and shopping for disability insurance, we have some information that may surprise you. Traditional long-term disability insurance generally protects up to 60% of an average physician's income. But traditional disability policies that most carriers offer are not designed to meet the needs of higher income earners; in fact, traditional coverage may actually leave you with gaps in protection.
There are four reasons a traditional policy could fail to meet your unique needs.
Four Foes Working Against You
Income Exclusions: Many disability plans may only replace about 60% of your base salary. Bonuses, performance and productivity incentives, pension contributions, as well as any outside income are generally excluded from consideration toward income in a traditional disability policy.
Caps: Most employer-provided plans place a cap on the maximum monthly benefit they will issue. While this capped benefit amount may provide adequate protection for some physicians, as a high-earning medical or surgical specialist, you may find that the cap leaves you woefully underinsured.
Participation Limits: When you apply for individual disability insurance, traditional disability insurance carriers will only participate in your total coverage up to certain amounts. For the high-earning physician, this participation limit will likely leave you with a gap in coverage.
Taxes: Many employed physicians receive all or some of their disability insurance from their employers. For this employer provided coverage, you will most likely have to pay taxes on any benefits you receive.* The amount you owe in taxes could be considerable, which would leave you with even less income than the 60% of protection you thought you had - right when you need it the most.
A Policy Designed With You In Mind
As a high-earning physician, it can be frustrating to deal with this situation. It’s not your fault traditional disability carriers can’t provide you with the coverage you deserve. TMA Insurance Trust was created to serve the unique needs of Texas physicians. We understand that as a high-earning physician, you have more to protect than traditional disability insurers will cover. As a result, we have negotiated a special arrangement through Lloyds of London to provide TMA members with a high-limit disability plan with several unique features, including:
• “Own-occupation” coverage
• Generous coverage can be added on top of traditional participation limits
• Simplified underwriting with no medical exam or lab work
• Fixed, level premiums
• Choice of payment options – lump sum payment, level payments or both
• Extended ages – TMA members up to age 70 can apply
• Exclusive 20% TMA member discount
You’ve invested years of training and experience to achieve your position in life, but a disability could take it all away. Disability can strike any person at any time, and can come from various, unexpected sources: an accident, injury, debilitating illness or a chronic condition such as arthritis. Call us today and let us help protect what you’ve worked so hard to build.
*Consult your tax professional for advice.
For over 60 years, TMA Insurance Trust advisors have been serving Texas physicians, their families and staff. TMA Insurance Trust prides itself on offering unbiased information and strategies to members, along with exclusive group rates on a range of the highest-rated plans in the industry.
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