Physicians have certain considerations to keep in mind when shopping around for insurance. Physician insurance coverage varies widely depending on specialty, state and business status, so doing your research to get optimal coverage is key. Here’s what to look for in disability, life and medical malpractice insurance:
If someone relies on your income, disability coverage should be a no-brainer. Consider that 1 in 4 of today’s 20-year-olds will become disabled before they retire. With odds like that, it’s worth investing in coverage. Focus on long-term disability insurance plan, because short-term disability can be replaced by a healthy emergency fund.
Your coverage needs are going to be affected by many factors. For example, if you’re a surgeon, even a minor wrist injury could put you out of work for awhile. So you need to factor in your specialty, as well as your age, your expenses and your family’s needs.
If your employer offers disability insurance, take a look at the coverage first to make sure it’s adequate for your situation. We go more in depth on what to look for in a disability insurance policy here, so check that out before you shop around.
One key element of life insurance, and possibly the most important, is that it is not an investment. The purpose of life insurance is to replace your income and support your family if you pass away.
That’s why I recommend term life insurance over whole life. Whole life is attractive to some people because it has investment components, but there are better ways to invest that money. In most cases (physician insurance included), term life insurance is a better choice.
Also remember that the earlier you can get life insurance, the better. Many residents hold off on paying for coverage because they’re not making much money, and they’re usually paying off student loans and supporting a family. Do what you can. You might have to start small and increase your coverage later, but starting sooner gives your money time to multiply.
Your employer may offer you a life insurance policy. This will usually end up being one to two times your salary. For most people (especially those with a family and a mortgage,) that’s not nearly enough. You want to aim for seven to 10 times your annual salary. Make sure the numbers check out before you sign up through your employer.
Medical Malpractice Liability Physician Insurance
One perk of working with a group or hospital is that you don’t have to shop around for your own medical malpractice liability insurance. But for those of you who own a practice or work as an independent contractor, this is a process you’ll probably have to go through.
The first thing to know is that your premiums are going to vary widely by your state and specialty. Check out this site for more information on MML physician insurance.
When you’re researching different insurers, make sure you look for one that has experience defending claims in your specialty. You also want to make sure they’re well-established and financially sound.
You’re going to find “claims-made” versus “occurrence” policies, and choosing the distinction that’s right for you is very important. Claims-made is the most common policy type for physicians, and it covers events that happen (and are reported) while the policy is active.
Occurrence policies, on the other hand, cover situations that happen while the policy is active but is reported after the policy is no longer active. That type of policy is rarely offered because predicting future claims costs is extremely challenging. You can also expect an occurrence policy to be pricier because of that.
That’s just the tip of the iceberg for your malpractice insurance decisions. Thorough research and selecting the right insurance provider for you is essential to your career and livelihood.