Like many physicians, you may believe that your individual long-term disability insurance and savings would help protect you, if you were unable to work due to an illness or injury. But individual disability benefits are designed to cover your personal and family expenses, not pay overhead expenses for your practice.

Can Your Practice Run Without You?

According to the Medical Group Management Association, the median overhead expense for a primary care physician’s practice is estimated at almost 60% of the revenue generated.*

Consider this scenario. If you were in partnership with two other physicians, and the practice was bringing in $1,200,000 in yearly revenue (resulting in $60,000/month of business overhead expenses), your share of the those expenses would be $20,000 a month or $240,000 a year.

Could You Afford a Quarter of a Million Dollar Loss?

Since the average recovery time for a serious illness or injury is at least 31.6 months**, you could easily exhaust your savings and derail your practice, if you couldn’t meet your share of the business expenses. In the event you needed more time to recover, the cost of maintaining your practice would only increase. And if you’re a solo practitioner, the financial hardship may even be more severe.

An Affordable Way to Help Protect Your Practice

Having a TMA Member Business Overhead Expense (BOE) policy in place is well worth some peace of mind.

For $80 a month, a 40-year-old physician can buy a TMA Member BOE plan, issued by The Prudential Insurance Company of America, that provides a $20,000 monthly disability benefit.

The plan also gives you the flexibility of covering actual overhead costs — including rent and utilities, staff salaries and benefits, loan payments, maintenance services and more — up to the benefit amount you select. That means you can tailor your policy to meet actual expenses, helping ensure that if the unexpected happens your share of the bills can be paid on time, and your practice can run smoothly without you.

Exclusive Benefits for TMA Members

In addition, when you buy your policy through TMA Insurance Trust, you’ll receive these competitive advantages:

• Lower premiums for twice the term. The TMA member plan provides up to 24 months of coverage — while some other plans only cover 12 months.
• No long waiting period before benefits are paid. A TMA member plan pays the first benefit retroactively after being disabled for 30 continuous days.
• During disability, coverage is continued at no cost to you.
• You can receive benefits even if you’re partially disabled and your practice’s revenue suffers.
• Payments can be paid either to you or your practice.
• If you decide to move out of state, you can continue your coverage as an affiliate TMA member until you reach age 75.

In the end, evaluating whether business overhead expense insurance makes sense comes down to the people in your life. Does saving the yearly cost of coverage outweigh the financial risks to your partners, staff and the health care of your patients? And, would a long-term illness deplete your individual disability insurance and savings, putting your family’s future in jeopardy?

Talk to your TMA Insurance Trust advisor about the benefits of TMA Member Business Overhead Expense coverage. It’s the sensible, cost effective way to help protect the practice you’ve worked hard to build.

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.