Although income may not be the driving influence for most Veterinarians, a person’s ability to earn an income is his/her greatest financial asset. For this reason, it is critical that as a Veterinarian you consider the importance of protecting your income, your family and future with a quality disability insurance policy. In order to facilitate and assist you in making the most appropriate and educated decision, this article provides basic insight for Veterinarians interested in disability insurance.
Begin by looking for a disability insurance policy that is noncancelable and guaranteed renewable. This type of policy renewability guarantees that the insurance company cannot cancel your policy, increase the pricing or change the provisions until after age 65, so long as you continue to pay your premiums in a timely manner.
Next, you should look for a disability insurance policy that provides benefits specific to your veterinary specialty. To do this, you must understand and review the policy’s definition of total disability, which describes the circumstances in which an insured will receive benefits for total disability. The best definition a Veterinarian can obtain is the true own-occupation definition of total disability, which defines disability as the inability, solely due to illness or injury, to perform the material and substantial duties of your occupation, even if you are able and/or working in a different occupation. It is this definition that allows you to continue receiving benefits, even if you decide to work in some other capacity.
To expand on the definition of total disability that your disability insurance policy provides, you also need to include residual disability benefits, which provide benefits for partial disabilities. The standard definition of disability included in your policy only pays benefits for TOTAL disability claims. If an illness or injury causes a 15% or greater loss of income, the residual disability benefit may provide you a partial benefit to cover some of the loss experienced. Every insurance company has a different qualification requirement and method of paying this type of benefit. The differences between these options could be the difference of tens of thousands of dollars at claim time, so be sure to evaluate these details closely.
Depending on your age and specific circumstances, there are other riders that you may want to consider as well. Younger Veterinarians should consider the future increase option, which guarantees your eligibility to increase your policy’s monthly benefit as your earnings increase. This rider eliminates the risk of your health impacting your ability to purchase additional disability insurance in the future. For a young Veterinarian whose income is likely to increase throughout his/her career, this rider makes perfect sense.
The cost of living adjustment rider is also a policy rider worth considering and for Veterinarians of all ages. The cost of living adjustment rider increases your monthly benefit after every 12-month period that you remain on claim receiving benefits. For anyone considering a long-term disability policy, this maybe an essential piece to properly protecting your future and maintaining the purchasing power of your policy’s monthly benefit. If you are considering a policy with a 5-year benefit or less, this rider may not be so critical.
I recommend that any Veterinarian interested in obtaining disability insurance work with a financial professional who is experienced with disability insurance. Although it is important for you to have a solid understanding of the various definitions and provisions, an experienced professional can assist you in better understanding your options and ultimately selected the best disability insurance policy for your circumstances.