Today's Practice: Changing the Business of Medicine TP2018Q2DigitalEditionWeb | Page 74

F I NA NCE Cover Your Abilities larger than what traditional Group and Individual DI carriers will issue, highly compensated individuals turn to High Limit DI coverage to protect their incomes and their financial security. The first step is to measure the gap between your current income and the benefits your disability policy provides. A basic individual disability policy typically covers 60 to 65 percent of your current monthly income when you start practicing, but these policies also place a cap on monthly benefits - usually, the most you can obtain is between $5,000 and $15,000 per month. As your income grows, your disability benefit plan may not be able to continue to ensure all of your after-tax income. Thus, you will have a gap in protection and increased risk exposure. A Real Life Example To illustrate the value for High Limit DI, let’s look at a real case story. Dr. Smith was a successful physician in Wisconsin. Dr. Smith and his financial planner completed a comprehensive financial review and they discovered a disability insurance deficit in Dr. S’s insur- ance portfolio of $49,000 per month! Dr. Smith should have $70,400 per month and his current coverage was only $21,400 per month. John F. Nichols MSM, CLU With so much at stake, Dr. Smith decided to purchase a High Limit Disability Policy. Sometime into the policy period, Dr. Smith, unfortunately, suffered a laceration and nerve damage to his dominant arm and is now unable to perform surgery. Each month Dr. Smith receives benefits from three disability insurance policies. • $15,000 from his Group LTD policy • $6,400 from his Individual DI policy • $49,000 from his High Limit DI policy In addition to the monthly benefits, Dr. Smith purchased the career-ending benefit which provides $5,000,000 in the event of a career-ending disability. After a 60-month benefit period, Dr. Smith will receive a $5,000,000 lump sum if his disability is permanent. Starting with just 3 lives, a medical practice may be able to secure a benefit plan with the following features; • Receive substantially higher benefits than traditional individual disability plans. • Obtain benefits on a guaranteed-issue basis without medical examinations. • Secure the full benefit amount for the definition of disability within your occupation/specialty. • Simple administration with one-page enrollment forms. Life gets busy and it’s easy to overlook the importance of disability income insurance, imagine if you lost your ability, strength or dexterity to perform everyday tasks? 73 TODAY ’ S P R A C T I C E: C H A N G I N G T H E B US I NES S OF M EDI C I NE