Reviewing your disability coverage helps you stay prepared financially

March 14, 2013

There are many ways to build a healthy financial future for yourself and your family. With May being Disability Insurance Awareness Month, I thought it timely to focus on the role disability income protection plays in that future.

Findings on disability insurance in our 2013 report

We recently released our national 2013 Report on U.S. Physicians'€™ Financial Preparednessand the survey findings reflect both challenges and opportunities in many areas of personal finance.

I was encouraged by some of the findings on disability insurance. The data shows that a high percentage of physicians –€“ 77 percent –€“ believe that having this type of coverage is essential, and in fact, 74 percent have a policy. Seventy-five percent have disability coverage through their employer and 35 percent have a policy not only through their employer, but a personal policy they purchased. Eighty-six percent purchased their policy either early in their career (33 percent as a resident) or shortly after starting to practice.

 

33% of physicians surveyed purchased a disability policy early in their career (e.g. as a resident)    53% purchased a policy shortly after they went into practice    14% purchased a policy after they had been in practice for a number of years

 

Almost half of physicians haven'€™t reviewed coverage

While these numbers are positive and show how physicians value being protected in this way, our report also revealed some other data. A key finding was that 42% of the physicians polled haven'€™t reviewed their coverage in the last five years or since they purchased the policy. That includes nearly 60 percent who bought their policy more than 10 years ago. So much can happen in even a year so this finding concerns me.

 

Of physicians surveyed 13% reviewed their coverage within the last month    45% within the last year    26% within the last five years    16% not since they purchased it

 

Lack of confidence about the 'right' amount of coverage

There's another consequence to this too, according to the report. As a result of the low rate of review, the physicians we polled say they don'€™t feel confident that they'€™re carrying the right amount of disability protection for their current needs. Our findings indicate that most physicians – across all ages and specialties – carry an average of $5,000–10,000/month of disability insurance protection. You may want to check your current coverage amount soon to make sure it reflects your current financial status.

Timely, consistent review is key

Reviewing a policy regularly, and updating it based on changes in personal finances are two good financial habits. As income increases over time, the monthly amount of the disability income protection policy should be checked and adjusted as changes occur.

Learn more about what your peers think

You can find more on what your peers think about disability insurance and other personal financial matters in our 2013 Report on U.S. Physicians' Financial Preparedness. I encourage you to review the entire report, and if you are one of the 2300+ physicians who responded to our survey, please accept my thanks for sharing your experience and perceptions with us. I hope this information has been helpful and as always, I look forward to your comments and questions.

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