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.
A Plan to Help Protect Your Family’s Future
As you know, the main purpose of life insurance is to provide enough income to comfortably protect your spouse and children, if something should happen to you. As your family’s dreams take shape, debts and expenses will undoubtedly continue to rise. If you bought a policy years ago, the benefit amount may not be sufficient to maintain your family’s current quality of life without your income.
In fact, it’s recommended that individual life insurance coverage should be reviewed and updated during important life changes such as: getting married, buying a home, having a family, planning for your children’s education and possibly relocating or downsizing in retirement. As you near retirement and accumulate more assets, you can consider reducing the amount of life insurance you hold.
For solo practitioners or partners in a small practice, life insurance can be used to protect a medical practice from economic loss in the event of the death of an owner or key employee.
Here are ways life insurance can help ensure the success and survival of a business:
1. Life insurance can be used to pay down or pay off any business debt or cosigned loans for your practice.
2. Life insurance can be an important part of a succession plan. If you are a physician in private practice, you may want to make sure your practice can survive the death of a partner. One way to accomplish this is to draw up a buy-sell agreement, requiring that the business interest of an owner who dies must be sold to, and will be purchased by, the remaining co-owner(s) or another named purchaser. But how will the purchase price be paid? Each physician owner in the practice would take out a life insurance policy on the other partners and he/she would be the beneficiary should that partner pass. This will provide the necessary funds, at the exact time needed, to buy out the deceased partner’s heirs.
Get Help From an Insurance Professional
Is your coverage adequate and properly configured for your situation? Life insurance planning can be complicated. To answer your questions and help you navigate the pitfalls, our licensed advisors are standing by. They’re ready to do the research and the paperwork necessary to secure the future of your family and your practice.
TMA Insurance Trust is a full-service insurance agency with over 60 years of experience helping Texas physicians protect their assets, family and practice. Advocating for members, TMA Insurance advisors offer unbiased information and strategies, along with exclusive group rates on a range of the highest-rated plans in the industry. And since advisors don’t work on commission, there is never any obligation or sales pressure.
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