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?
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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