When a physician who owns his or her own practice comes to one of our agents, the breadth of coverage to consider is often not understood. Being able to keep your business doors open and your operation running at full capacity while you are disabled shouldn’t be overlooked or disregarded so easily. There is coverage available that can help minimize the toll business expenses can take not only on your practice, but on your financial situation at home, too.
Attention residents, fellows and interns: MetLife made changes!
In our last post, we started the discussion of buy-sell agreements for physicians and explained how the disability component of these agreements is often overlooked. Disability buy-sell insurance is, simply put, an insurance contract that states that after a period of time being disabled, you, your practice or your partners will be given a benefit amount that was predetermined in order to buy the disabled person’s share of the practice. In this final part of the series, we’ll cover other reasons why you need disability buy-sell insurance and share some probabilities that a disability would trigger a claim.
For physicians in medical practices, the concept of a “buy-sell” agreement is not new. In fact, if you’re like most medical practices, you probably already have such an agreement in place. Most agreements do a good job covering how to handle the death of a partner, but most never address the questions, “What if my partner or I become disabled, what then? How do we dissolve the practice fairly?”
Many physicians today understand the importance of disability income as a method to protect their most valuable asset – their ability to go to work each year and earn an income. However, for physicians who are solo practitioners or partners in a closely-held business, this may not be enough!
There are many reasons for a physician to get declined for disability insurance. A serious illness or medical condition alone can disqualify you from obtaining coverage. Significant medical history can also disqualify you, or result in such high premiums that it is no longer cost-effective. Sometimes it can occur because the underwriter does not have enough information to make a decision. Don’t give up if this happens to you. It is important to seek further medical attention to uncover if there is really a reason to be denied disability insurance. Here is an example of why this makes sense to do.
If you were unable to work due to a serious illness or injury, what would happen to your business? Overhead expenses would continue: rent/mortgage, utilities, malpractice insurance, equipment payments, salaries to key employees, etc. How would you pay for these expenses while disabled when revenues have been reduced or stopped?