As a physician with an established career, let’s suppose you have done well with your income and investments over the years. Well enough, in fact, that you now have sufficient cash to easily buy a new house if yours burns down. Therefore, you are going to cancel your fire insurance, right? Of course not. Your house is still a large asset regardless of how much cash you have. You still want an insurance company to take on the risk of a fire or other disaster destroying your house.
Now let’s look at your income the same way.
The risk of disability is to your income as a fire is to your house.
Your income is usually a far bigger asset than your house. The risk of disability is to your income as a fire is to your house. Even though you may have enough cash to cover your needs for years, you still don’t want to risk losing your income, especially when it is so easy to pass the risk on to an insurance company.
Fairly often, when I meet with new doctors for the first time, they tell me that they just want disability insurance for about 10 or so years until they have enough money saved up. They say at that point, they will no longer need disability insurance. So they want a medium term kind of plan. I always ask them if they will cancel their fire insurance too? They ALWAYS say, “No!” When they look at it this way, they become motivated to have a solid long-term disability insurance plan. This has to include non-cancelable, guaranteed renewable, own occupation disability income insurance.
I have specialized in this business long enough that I have seen hundreds of these young professionals eventually get to the point that they have enough cash to buy a new house or two or three. They never cancel their fire insurance. And interestingly, they never cancel their disability income insurance either. In fact, they usually want more.
Contact us if you want to be sure you have the right disability insurance for the long-term.