Understanding Optional Disability Insurance Benefits for Doctors

Eddie Whalen
group disability riders

Disability insurance serves as a critical safety net for doctors who face unique financial risks due to the significant investment in their education and a potential loss of earnings ability. Here at MGIS, we are best known for providing valuable insurance solutions for doctors. Most notable is our Disability Guard for Doctors™ program, where we protect the actual procedures a doctor performs on a daily basis. Beyond the definition of disability, high-quality group disability policies offer valuable optional benefits that help protect doctors by filling in important gaps. Below, we’ll explain six of these benefits that are particularly valuable to doctors.

Retirement Contribution Benefit

The Retirement Contribution Benefit is a forward-thinking disability insurance optional benefit that supports a disabled doctor’s long-term financial health. Claimants are typically unable to make retirement account contributions due to lost income; this benefit steps in to continue their retirement contributions and to ensure their nest egg continues to grow.

This is possibly the number one benefit doctors are most interested in. With the high costs associated with medical education and training, it’s no wonder that many doctors have concerns about their financial stability and retirement plans.

Brokers who recommend a retirement contribution benefit for their doctor clients set themselves apart from other benefits brokers looking only to save their clients on cost.

Most retirement contribution benefit riders:

  • Pay a percentage of a claimant’s income, typically up to about $5,000.
  • Start benefit payments as soon as long-term disability benefits begin.
  • Are paid to either the trustee or the pension plan administrator, or to a deferred annuity selected by the claimant.

Cost of Living Adjustment (COLA) Benefit

Inflation can erode the purchasing power of disability benefits over time, leaving doctors struggling to cover their living expenses. The COLA benefit is specifically designed to combat this issue by periodically adjusting the disability payouts to disabled participants to keep up with inflation rates.

The percentage increase is calculated on the selected COLA percentage for the benefit. This additional benefit can make a significant difference in maintaining a doctor’s standard of living during a long-term disability. As a broker, offering this benefit to your doctor clients can be a valuable selling point and demonstrate your commitment to their financial well-being.

Professional Liability Premium Benefit

Medical practitioners are well aware of the importance of maintaining malpractice insurance. When a disability strikes, the need for this coverage doesn’t disappear. The Professional Liability Premium Benefit is a critical addition to a group LTD policy that helps cover the cost of malpractice insurance premiums while the insured is disabled.

Disabled doctors are not exempt from medical malpractice claims and, in many cases, must continue their malpractice or professional liability insurance even when disabled. 

For example, take a doctor who goes out on partial disability, where they are still performing some duties in the field of medicine. They still need to continue to pay their malpractice premiums. That’s where a Professional Liability Premium Benefit comes in and reimburses the disabled doctor up to a certain amount (for example, $25,000) of actual malpractice insurance premiums during a pre-determined period while on approved disability.

Recommending policies that include this benefit can give your doctor clients peace of mind, knowing their professional liability costs are covered even when they cannot practice.

Student Loan Repayment Benefit

Student loan debt is a significant burden for many doctors early in their careers, and disability can compound this challenge. The Student Loan Repayment Benefit is tailored to address this concern.

It allows disabled doctors to retain financial stability by contributing towards their student loan payments. This benefit typically begins after a pre-determined waiting period, such as 6 months, and can provide a benefit for several months.

When talking to group practices, one draw of this benefit is that it can help recruit and retain younger doctors who consider this benefit a valuable addition to their overall compensation package.

Business Protection Benefit

Disabled doctors can have a devastating effect on the practices they serve, impacting financial stability and patient care. The Business Protection Benefit acts like a “Key Man” policy for your clients’ practices, paying an additional benefit to the practice when a key employee becomes disabled.

The benefit amount usually matches what the disabled physician receives in their monthly LTD benefit. This additional benefit to the practice lasts for 12 or 24 months, depending on what was selected in the policy.

The benefit is usually paid directly to the practice and is typically not impacted by any other income benefits. This type of rider most often allows the practice to spend the benefit money as appropriate without providing proof of expenses incurred.

Ultimately, the Business Protection Benefit provides peace of mind to both doctors and their practice partners, knowing that the financial impact of a disability will not jeopardize their business’s success. By being aware of this benefit, you can help protect the individual doctor and the practice they are part of.

Catastrophic Disability Benefit

Some disabilities are so severe that they drastically alter a doctor’s lifestyle and require exceptional measures for care. The Catastrophic Disability Benefit is tailored for such extreme cases, offering additional financial support to address the higher costs associated with severe disabilities.

This benefit is activated when the insured is unable to perform at least two Activities of Daily Living (ADLs) independently or is considered cognitively impaired for at least 90 days.

Informing physicians about this benefit ensures they understand the breadth of coverage available for dire circumstances.

Learn More About How MGIS Designs Disability Insurance Exclusively for Doctors

To ensure that your doctor clients are getting the most value out of their policies, it’s important to consider and understand these six benefits. When included in a group LTD program, benefits like these can provide critical support during a disability episode. Working with an experienced provider like MGIS will help ensure that your clients’ disability coverage is comprehensive and provides the most value for doctor clients. If you have questions about any of the benefits mentioned above or want to learn more about the programs MGIS offers, contact us.

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