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Protecting What Matters Most

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8 reasons why your disability coverage may not provide enough income.

You may have a long-term disability policy provided by the hospital or medical group where you’re employed or you may have bought a plan yourself and filed it away. So why would you need to revisit and update your coverage? For most physicians, the answer lies in one simple question, “If you become disabled and cannot continue your career, will your disability coverage provide enough income to maintain your lifestyle for a significant amount of time?”

Here are the 8 reasons to have your current policy reviewed:

1. You haven’t updated your disability coverage since your residency.

While you may have group disability insurance from your employer, your coverage may replace only 50 to 60% of your income. Don’t wait for an untimely event to find out how much coverage your monthly benefit provides. It most likely will not be as much as you expect.

Updating your current policy or purchasing an individual plan with higher income replacement coverage can protect your family’s standard of living, while potentially saving you money in the long run. For example, one of our advisors recently found a way to retain the same level of coverage for a TMA member while saving him $2,300 annually.

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2. Your income and lifestyle have changed but your coverage hasn’t.

As your career takes off, you’ll need more coverage to accommodate a higher income and additional financial obligations. You may be getting married, buying a home, starting a family or saving for your children’s education. You’ll want a policy that provides the right amount of income replacement to ensure the bills are paid and your family is supported without depleting household accounts or jeopardizing college or retirement savings.

3. Taxable benefits reduce income.

Long-term disability benefits provided by a hospital or medical group are taxed as income. That means the income you’d receive if you become disabled would be reduced. When you purchase an individual plan and pay the premiums, the income is tax-free.

4. Employer-sponsored plans aren’t portable.

Coverage provided by a medical group or hospital ends when you finish your residency or change employment. You’ll need to buy your own coverage and make sure it can travel with you throughout your career.

5. Premiums cost more the longer you wait.

Buying coverage when you’re young and healthy is smart because it’s more affordable and you’re likely to be approved by the insurance company. As you age, premiums become more expensive.

6. Inflation depletes the buying power of benefits.

A Cost of Living Adjustment Rider (COLA) is a good way to provide automatic annual increases to your disability benefits.

7. Limited benefits.

Ensure that your income is secure to age 65 by having a “true own occupation” plan. This policy pays benefits, if you cannot work in your occupation or medical specialty, without ever being re-evaluated for a disability by the insurance company. There is no reduction in benefits if income is earned in another medical specialty or occupation.

8. Expert advice is sometimes required.

Disability insurance is a complex subject. TMA Insurance Trust advisors understand the unique financial needs of Texas physicians. That’s why they’re qualified to help members navigate the complex pitfalls of being underinsured. Members receive unbiased recommendations, since our advisors don’t work on commissions; they work exclusively for TMA members.

You’ve invested time, energy and years of specialized training into practicing medicine. Long-term disability insurance is designed to protect your lifestyle and financial independence, whether you’re just starting out or well established in your career. Contact one of our advisors today to find out if your income replacement coverage is working hard enough for your family.

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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.

Speak with a TMA Insurance Trust Advisor:

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