Like many of you, I do a lot of reading to stay on top of the changes in my industry. I need to be able to provide the very best advice for my clients. Something I haven’t talked a lot about is disability insurance, but this story caught my attention. This was about Derek, a 50-year old orthopedic surgeon, performing at the top of his game, making $500,000/year. He was divorced, had two kids in college and enjoyed living well.
Derek was with a patient one day when he noticed a slight tremor in his right hand. He was a doctor, prone to self-diagnosis, so he feared the worst. He sought out a neurologist friend from medical school, who confirmed his fear—his tremor was an early sign of Parkinson’s disease.
This was a devastating diagnosis. People are living with Parkinson’s these days and managing their lives around the disease, but Derek knew that the progressive tremors would soon end the surgical career that he loved.
Fortunately for Derek, long ago in medical school a fellow student had advised him to buy a Long-Term Disability Insurance (LTDI) policy to protect himself as he began a high-paying, demanding, career. With this diagnosis, he began making changes in his life to accommodate his disease. He sold his practice and became a full-time professor. Less stressful and not as physically demanding, it would be much easier to manage his Parkinson’s disease in this new role.
Best of all, because of Derek’s LTDI, he will receive benefit payments—equal to 60% of his salary as a surgeon—until he retires. This policy allows him to earn from a job that is different from his original occupation while receiving the LTDI benefits.
Most working people should have some LTDI. Extended medical issues, bills and subsequent lost income are the cause of much of the financial hardship in the US. Physicians, in particular, should have disability insurance. It protects their substantial investment in their education and training and safeguards future income from a disability that would prevent them from working in their profession.
Group disability is also an option if you have or work for a company. Some group plans insure as few as two people and the underwriting can be more lax than with individual policies.