Before providing an explanation for doctor disability insurance, it is really worthwhile to stop for a while and understand what is insurance itself.
Understanding the term ‘insurance’
Before providing an explanation for doctor disability insurance, it is really worthwhile to stop for a while and understand what is insurance itself. Insurance is really a financial tool to hedge against the risk, or offset the risk of an undesirable event. Life insurance is used to hedge against the risk of loss of life, car insurance against an accident and disability insurance against a physical or mental disability.
Doctors disability insurance
A doctor disability insurance is a financial product designed for doctors to offset the risk posed by a disability to their ability to practice their profession and earn a livelihood. Several medical practices are heavily reliant on the doctor’s physical or mental ability. Should the doctor meet an unfortunate accident leading to a disability, a doctor disability insurance pays out benefits in order to secure the doctor’s livelihood.
Types of coverage
In some cases, such as life insurance, there is little ambiguity. The subject is either alive or dead. But in case of disability, there may be various interpretations of who is disabled and who is not. Different insurers treat disability different, depending on their policy as well as on the insurance plan. There are three broad categories of insurance covers:
• Own-occupation: This level of cover stipulates that the subject is considered ‘disabled’ if he is unable to perform the duties of his occupation. This category provides the best level of cover. Accordingly, a doctor is considered disabled if he is unable to perform duties of his job. In such a case, the benefits of the insurance become applicable. The doctor is free to take up another occupation, even in the medical field, with any pay, without affecting the benefits he receives.
• Modified own occupation: This is a middle ground for coverage and cost. According to this category, the subject is considered ‘disabled’ if he becomes unfit to take up any occupation of his field. If the doctor is unable to work in any occupation in the medical field due to his disability, then the benefits of the insurance become applicable. However, if the doctor is able to work in the same field but at a much lower paid position, he may be able to get partial benefits, depending on the terms of the specific insurance agreement.
• Any occupation: This level provides the least amount of cover and hence is usually the cheapest insurance offering. In this category, the subject is not considered disabled as long as he is fit for some or the other kind of work. He or she is considered disabled only if they are unable to work in any kind of occupation due to their acquired disability. In this case, the insurance comes into effect only after a person is completely crippled. If the person is able to secure some kind of a job somewhere else, then usually insurance benefits are not covered, but depending on some insurance plans, very little compensation may be awarded. Since these kinds of plans are of very little use, most experts recommend steering clear of these.