Spring has finally arrived, and with it, an increased turnover in rental homes and apartments. Some physicians are moving for employment or may need a change of scenery. Others have college students in the family who will be living in rental housing for the coming school year. Whatever the case, many are thinking of a new place to call home.
Life insurance is a crucial part of an independent physician’s financial safety net. Since you may not have access to an employer benefits package that often includes life insurance, it’s up to you to secure and maintain life insurance coverage that meets the changing needs of your family and your practice.
Like most physicians, you have life insurance. You know that it is a vital part of your financial safety net. Since many hospitals and large medical practices offer group life insurance as an employee benefit, many employed physicians have this type of policy. Signing up for group life insurance takes only a few moments - and sometimes it is an automatic benefit, requiring no input from you as the insured. This employee benefit is almost always provided to employees at no cost or at very low cost. Since obtaining group life insurance is so simple and affordable, it’s easy to see why 46% of all life insurance policies are group policies.
Thanks to medical liability lawsuit reforms that were advocated by the Texas Medical Association in 2003, physicians today have much less to worry about from spurious or overinflated malpractice lawsuits. However, as a physician, you are still facing a potentially devastating risk from a different source. Personal liability lawsuits are commonplace, and your malpractice and business liability insurance does not protect you outside of your professional life. There are several areas where you could be at risk of a personal liability lawsuit.
You as a Texas physician have a great deal to protect, and we at TMA Insurance Trust work hard to help you do so. Recently, we conducted a survey to find out what TMA members’ most common questions were with regard to disability insurance. After we reviewed these questions, we addressed some of the most pressing concerns.
How much does it cost to lose a physician in your practice? According to HR experts G&A Partners, the cost of replacing a skilled professional employee amounts to 125% of that employee’s annual salary. Consider the cost of severance pay, recruitment costs, lower productivity while other employees pick up the slack, lost time while training, and lower productivity while the new employee becomes acclimated. The expense adds up quickly, and the financial impact adversely affects your bottom line.
Many employed physicians receive disability insurance from their employers as part of a comprehensive benefits package. Typically, employer-provided long-term disability insurance provides a benefit for up to 60% of a physician’s salary. 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.
If you become sick or hurt and are unable to work, proper long-term disability insurance can be your financial failsafe. Sadly, some physicians are leaving themselves vulnerable to potential hardship. They may purchase a disability policy based on what they can afford at the time. They know they have some long-term disability coverage, but the truth is, they may be underinsured. If a serious illness or injury strikes, they realize that the coverage they obtained is not adequate, and their funds are draining at an alarming rate. How can you keep this from happening to you?
