As a Physician, What Insurance Do I Need?
By Jared Andreoli, CFP®, CSLP®
As a physician, you know the importance of having the right amount and type of insurance. All too often, however, physicians can fall victim to not following their own body of knowledge. Let’s end that right here with this info-packed article about the most important insurance coverage for physicians to carry.
Physicians benefit from having certain types of insurance coverage. Their situation is unique in that they carry a great deal of responsibilities, which possibly includes owning their own practice. Insurance provides physicians with several benefits, such as:
Managing risk
Financial protection
Fulfilling a legal requirement
Allowing for business continuity
Protecting patient records from theft
Let’s take a look at which insurance coverage is most applicable and helpful to physicians fresh out of residency.
Disability Insurance
Like professionals in other industries, physicians benefit from holding coverage for disability. In the event that you experience a physical or mental trauma that reduces or eliminates your earning potential, disability insurance can safeguard your financial stability. A significant statistic shows that 1 in 4 20-year-olds in the United States will become disabled before reaching retirement age. Having disability insurance is a proactive strategy to defend against unforeseen events crippling your financial well-being.
Having an own-occupation rider on your disability insurance policy provides full coverage for benefits if you can’t work in your trained profession, even if you can work in a different field. It’s interesting to note that you can collect full benefits even if you’re still practicing, as long as it’s in a limited capacity due to an identified disability. You’ll want to also take a close look at other riders that can be added to your policy at no or low cost, such as riders for mental health, rehabilitative care, family support, and survivor benefits.
Some policies are fully portable, meaning you can carry them with you from position to position, a new medical group or even as you start your own practice. It’s worthwhile to find out if your policy allows you to maintain your disability coverage regardless of who employs you.
Life Insurance
It’s a safe prediction that as a new physician, your income will afford you a very comfortable lifestyle. However, with that level of income comes a greater need to be able to support your family if you were to die. There are other, less obvious, reasons why life insurance is a good idea for young physicians. Besides income protection, life insurance can assist your beneficiaries in paying back student or other loans in the event you pass away before they are paid off. And lastly, having your own life insurance policy is a smart supplement to any life insurance policy provided by your employer since your employer-sponsored policy may only be worth one to two times your annual salary.
Comprehensive Malpractice Insurance
Malpractice insurance shields doctors from any damages sought by patients for misdiagnosis, mistreatment, injury, or death. Most facilities carry their own level of malpractice protection for its physicians; however, be wary of the level of coverage for malpractice suits provided by your employer. Read the fine print. It’s often a good idea to carry your own amount of malpractice insurance to safeguard your assets if a suit is leveled against you in the course of your practice. Different types of doctors may want different levels of coverage. For instance, a surgeon may want a deeper level of coverage than an internist.
Umbrella Insurance
Umbrella insurance provides coverage that extends beyond what your regular insurance policies cover. For example, if a malpractice suit is brought against you and you lose that case, your malpractice insurance (and possibly your employers, if applicable) will cover some amount of those damages. However, any amount left over that’s not covered is your burden. If you carry umbrella insurance, you can use that coverage to pay for those expenses. Some situations covered by umbrella insurance include bodily injury liability, property damage liability, landlord liabilities, and libel, slander, and defamation.
Adequate Home/Renters and Auto Insurance
Higher-earning individuals often own more expensive items, such as their home or car, so any damage or loss to those items costs quite a bit to replace or repair. It’s important for physicians to invest in high-quality insurance coverage to protect homes, apartments, and cars. As a physician and possibly a member of a professional association, you may qualify for discounted rates. Simplicity Financial helps new physicians make smart choices, including determining the most optimal insurance coverage for their home and cars.
Need Help Navigating Your Insurance Needs?
As a physician just out of residency, this is just the tip of the iceberg when it comes to what you need to know and understand regarding insurance needs. We work with people in your shoes every day to select the necessary coverage to feel financially stable at home and at work.
We can help you too. Get started by scheduling a free consultation, or reach out to us by emailing jared.andreoli@simplicityfinancialllc.com or calling 414-207-6473.
About Jared
Jared Andreoli, CFP®, CSLP®, is president and financial planner at Simplicity Financial, a fee-only RIA dedicated to helping early-career physicians conceptualize their financial picture and achieve their financial goals. Jared specializes in devising individualized financial road maps for clients, and he loves nothing more than a full day meeting with clients who value his partnership to solve problems—big and small.
After college, Jared spent six years working as a mutual fund administrator for a large company. While he learned an immense amount about the financial world, he was missing the personal connection of working with individual clients. Combining his passion for finance and personal connection, he established Simplicity Financial in 2017.
Jared has a degree in finance with a concentration in financial planning from Western Kentucky University, along with the CERTIFIED FINANCIAL PLANNER™ (CFP®) and a Certified Student Loan Planner (CSLP®) certifications. Outside of work Jared enjoys cooking and traveling. He played baseball in college and still coaches occasionally. He and his wife recently welcomed a daughter, who occupies most of their time. To learn more about Jared, connect with him on LinkedIn.