Discover essential insights into disability insurance tailored for Canadian physicians and dentists. Key insights to help you decide the best option between OMA, CDSPI or Individual Disability Insurance Policy
Disability Insurance for Doctors & Dentists: The Ultimate Canadian Guide
Why Every Doctor Needs Own-Occupation Disability Insurance
Disability insurance is a type of coverage that provides financial support to individuals who are unable to work due to a disabling condition. For physicians and dentists, having this coverage is crucial, given the physical and mental strains their professions can entail. Understanding disability insurance includes knowing the various components, terms, and types available that best suit a practitioner’s needs.
Definition and Importance of Disability Insurance
The primary function of disability insurance for doctors and dentists in Canada is to replace a portion of your income if you become unable to perform your job due to illness or injury. In Canada, this insurance acts as a form of security, ensuring that you can continue to meet financial obligations, such as mortgages and tuition fees, even if your earning capacity is compromised.
It is essential for physicians and dentists to consider the nature of their work, as they often face higher risks for conditions that could lead to disability. Investing in a comprehensive policy can provide peace of mind, knowing that you will have financial support when you need it the most. Moreover, the unpredictable nature of health issues can make it difficult to plan for the future, making disability insurance an invaluable safety net that allows practitioners to focus on their recovery without the added stress of financial burdens.
Types of Disability Insurance
There are various types of disability insurance available, each serving different needs:
- Short-Term Disability Insurance: This coverage typically lasts for a few months up to a year. It generally covers a percentage of your income during a temporary disability.
- Long-Term Disability Insurance: This is designed for prolonged disabilities, providing benefits for several years or until retirement age, depending on the policy.
- Own Occupation Coverage: This type of policy pays benefits if you cannot perform the specific duties of your occupation, regardless of whether you can work in another capacity.
- Any Occupation Coverage: To qualify for benefits under this type, you must be unable to work in any job suited to your age, education, and experience.
Each type of disability insurance comes with its own set of advantages and limitations, and it is crucial for healthcare professionals to assess their individual circumstances when selecting a policy. For instance, a dentist may find that own occupation coverage is particularly beneficial, as it ensures they are compensated even if they can perform other types of work but are unable to practice dentistry due to a physical limitation.
Key Terms in Disability Insurance
Understanding key terms is crucial for navigating the world of disability insurance effectively:
- Benefit Period: This refers to the length of time you will receive payouts after becoming disabled.
- Elimination Period: This is the waiting period after a disability event occurs before benefits begin.
- Partial Disability: This term describes a situation where you may still work but your ability to perform tasks is significantly reduced.
- Cost of Living Adjustment (COLA) Rider: Increases benefits over time to keep pace with inflation.
- Future Income Option (FIO) Rider: Allows you to increase coverage as your income grows without additional medical underwriting.
- Residual Disability Rider: Provides partial benefits if you're able to work part-time or with reduced responsibilities.
These features enhance the flexibility and comprehensiveness of your disability insurance policy.
By being familiar with these terms, you can make informed decisions about your coverage options. Additionally, understanding the nuances of how these terms interact can help you to better evaluate different policies and their implications on your financial stability. For example, a longer elimination period might reduce your premium costs but could also leave you vulnerable during the initial phase of your recovery, making it essential to strike a balance between affordability and adequate coverage.
Doctors & Dentists Also Ask...
When comparing disability insurance plans, it's important for doctors to conduct a cost-benefit analysis. This involves comparing the cost of the insurance premiums with the potential benefits provided by the plan. While a plan with lower premiums may be tempting, it's important to ensure it provides adequate coverage and benefits. The RBC Professional Series and the OMA Plan both offer comprehensive coverage and benefits, making them attractive options for doctors. Here are key benefits of the RBC Professional Series:
Income Protection
Total Disability Coverage: Provides monthly benefits if you are completely unable to perform the duties of your occupation due to injury or illness. This ensures financial stability during periods of total disability.
Partial and Residual Disability Coverage: Offers benefits if you can work but experience a reduction in income due to disability. Residual benefits are proportional to the income loss, supporting a gradual return to work.
Return-to-Work Assistance
Covers costs for medical treatment, rehabilitation, vocational retraining, and workplace modifications to help you resume work. Recovery benefits also provide partial payments during the transition back to full-time work.
Flexible Policy Features
Cost of Living Adjustment (COLA): Protects against inflation by adjusting benefits annually based on the Consumer Price Index (minimum 2%, maximum 10% compounded).
Future Income Option: Allows you to increase coverage as your income grows, without requiring proof of insurability.
Long-Term Care Conversion: Enables conversion of disability coverage into long-term care insurance between ages 55 and 65 without health evidence.
Additional Protections
Waiver of Premium: Premiums are waived after 90 days of disability and refunded for premiums paid during this period.
First-Day Hospitalization Benefit: Eliminates the waiting period for total disability benefits if hospitalized for 72 consecutive hours.
Retirement Protection: Helps maintain deposits into retirement savings programs while disabled.
Accidental Death and Dismemberment (AD&D): Provides specific benefits in case of accidental injury or death.
Specialized Riders
Health Care Profession Rider: Covers impairments due to occupational exposure to HIV or hepatitis, ensuring financial protection for healthcare professionals.
Critical Illness Recovery Plan: Available as an optional policy, it pays a lump sum upon diagnosis of covered critical illnesses.
Policy Renewability and Stability
Non-cancellable and guaranteed renewable until age 65, ensuring stable premiums and policy terms throughout your career.
These features make the RBC Professional Series Disability Income Protection Plan a comprehensive solution for professionals seeking robust financial security in the face of unexpected disabilities.
The elimination period in the RBC Professional Series Disability Income Protection Plan is a waiting period between the onset of a disability and when benefits become payable. Here’s how it works:
Key Features of the Elimination Period
Start Date: The elimination period begins on the first day you are unable to work due to a disabling injury or illness, not when you file your claim.
Duration: The length of the elimination period can vary depending on your policy. Common durations include 90 days or longer for long-term disability plans.
Purpose: This period allows insurers to evaluate your claim and determine if your condition meets the policy's definition of disability. It also gives time for treatment and recovery, potentially avoiding long-term benefits if you can return to work.
Claim Process: You must demonstrate that you meet the policy's criteria for disability consistently throughout the elimination period, supported by medical evidence.
Recurrent Disabilities: If you return to work but experience a recurrence of the same disability within a specified timeframe, you may not need to satisfy another elimination period.
Once the elimination period ends and your claim is approved, monthly benefits begin for the duration of the benefit period outlined in your policy
The process for switching from partial disability benefits to residual disability benefits in the RBC Professional Series Disability Income Protection Plan involves several steps and requirements. Here is how it works:
Eligibility and Transition Process
Partial Disability Benefits: Initially, if you are partially disabled, you receive a flat percentage of your monthly benefit—50% for the first 24 months and 25% thereafter—without needing to demonstrate a loss of income. This is based on your inability to perform certain duties or a reduction in work hours due to injury or illness.
Election to Switch: At any time during the period of partial disability, you can choose to switch to residual disability benefits. Residual benefits are based on a proportional loss of income rather than duties or time lost. To make this switch, you must provide written evidence of your income loss, typically requiring financial documentation and proof of earnings before and after the disability.
Residual Benefits Calculation: Once the switch is made, residual benefits are calculated based on the percentage of income lost:
Irrevocable Election: After electing residual disability benefits, you cannot revert to partial disability benefits during the same period of disability. This ensures consistency in benefit calculations and payouts
Reimbursement for Prior Period: RBC Insurance may reimburse you for any additional residual disability benefits you would have received during the 12 months prior to making the switch
Key Considerations
Residual benefits require ongoing documentation of income loss, whereas partial benefits do not.
Switching may be advantageous if your income loss exceeds the flat percentages provided under partial disability benefits.
Once residual benefits are elected, recovery benefits tied to residual claims may be excluded after returning to work.
This flexible system allows policyholders to optimize their benefits based on their specific financial situation during a disability period.
RBC Professional Series Disability Income Protection Insurance handles recurrent disabilities under its policies with provisions designed to provide continuity of benefits and financial protection. Here’s how it works:
Key Features of Recurrent Disability Coverage
No New Elimination Period (Within 6 Months): If a disability recurs within six months of the end of the prior claim and is due to the same or a related cause, the recurrent disability is treated as a continuation of the previous claim. This means you do not need to satisfy a new elimination period, ensuring quicker access to benefits.
New Elimination Period (After 6 Months): If the recurrent disability occurs more than six months but less than 12 months after the prior claim, a new elimination period must be satisfied before benefits resume.
Extended Protection for Full-Time Employment with Another Employer: RBC also provides recurrent disability coverage for up to 12 months if you return to full-time work with another employer and experience a recurrence of the same disability. This feature addresses concerns about pre-existing conditions under new plans.
Seamless Transition: These provisions ensure that individuals are not penalized for attempting to return to work but later experiencing a relapse of their disabling condition.
Benefits of Recurrent Disability Coverage
Encourages individuals to return to work without fear of losing benefits if their condition worsens.
Provides financial stability during recurring episodes of disability.
Simplifies claims processing by linking recurrent disabilities to the original claim.
These features make RBC's recurrent disability provisions particularly valuable for professionals who face conditions with episodic or unpredictable patterns.
Under the RBC Professional Series Disability Income Protection Plan, survivor benefits provide financial support to the insured's beneficiaries in the event of death while receiving total disability benefits. The key details are as follows:
Survivor Benefits
Benefit Amount: If the insured dies prior to age 65 while receiving total disability benefits, the beneficiary will receive a lump-sum payment equivalent to three times the maximum monthly benefit payable at the time of death.
Eligibility: This benefit applies only if the insured was actively receiving total disability benefits at the time of their death.
These survivor benefits ensure that beneficiaries receive immediate financial assistance during a challenging time, offering additional security alongside the insured's disability coverage.
Best Disability Insurance Policies for Physicians
Physicians face unique challenges and risks in their professions, making disability insurance particularly important. Not only are they responsible for the health of their patients, but they also have significant financial commitments that rely on their ability to work.
Why Physicians Need Disability Insurance
Due to the rigorous demands of their roles, physicians may encounter physical ailments such as back injuries or mental health issues from stress. These factors can lead to significant limitations in their ability to practice medicine. In essence, disability insurance helps protect their most valuable asset: their earning potential.
Moreover, the financial implications of a disability can be overwhelming. Many physicians have substantial student loans, mortgages, and other financial obligations that require a steady income. A sudden inability to work can jeopardize their financial stability, making it crucial for them to have a safety net in place. Disability insurance not only provides peace of mind but also ensures that they can maintain their lifestyle and meet their obligations, even in the face of unforeseen circumstances.
Disability Insurance Options for Physicians
Physicians have multiple options available for disability insurance, which include individual plans, group plans provided by hospitals or associations, and specialized policies tailored for medical professionals. Each option has its pros and cons:
- Individual Plans: These are customizable and portable, meaning you can take them with you if you switch jobs.
- Group Plans: Often provided by employers, these may have lower costs but could offer limited coverage.
- Specialized Policies: Tailored specifically for physicians, these policies offer features that standard plans might not, such as coverage for specific specialties.
When considering these options, it’s essential for physicians to assess their unique circumstances. For instance, a surgeon may require a different level of coverage compared to a general practitioner due to the physical demands and risks associated with their specific field. Additionally, some insurers offer riders that can enhance coverage, such as a cost-of-living adjustment rider, which can be particularly beneficial in maintaining purchasing power over time.
Evaluating Disability Insurance Policies for Physicians
Choosing the right policy involves careful consideration of several factors, including coverage amount, premium costs, and terms. Physicians should evaluate their specific needs, considering the terms of the policy and how they align with their career trajectory.
Additionally, consulting with a financial advisor or an insurance specialist can help clarify complex terms and offer insights on securing the best coverage available. They can assist in comparing different policies, understanding the nuances of each option, and ensuring that the chosen plan aligns with both current and future financial goals. This expert guidance can be invaluable, especially in a landscape where the needs of healthcare professionals are constantly evolving.
When selecting a policy, consider the following factors:
- Coverage Amount: Ensure the benefit amount adequately replaces your income after taxes, accounting for expenses, debts, and lifestyle.
- Elimination Period: The waiting period before benefits commence; shorter periods lead to higher premiums.
- Benefit Duration: Choose a duration aligning with your recovery timeline or retirement plans; long-term coverage is advisable given the potential severity of disabling conditions.
- Policy Terms and Definitions: Understand terms like "total disability," "partial disability," and "residual benefits" to grasp the scope of coverage.
Disability Insurance for Dentists
Similar to physicians, dentists are also at risk of disabilities that can disrupt their practice. They often deal with physical demands such as prolonged periods of sitting or standing, which can lead to musculoskeletal disorders. Additionally, the repetitive motions involved in dental procedures can contribute to conditions like carpal tunnel syndrome, making it crucial for dental professionals to consider their long-term health and career sustainability.
The Need for Disability Insurance in Dentistry
For dentists, the inability to perform procedures can have immediate financial consequences. Understanding and investing in a solid disability insurance plan is an essential step in safeguarding their career and financial future. Beyond the immediate loss of income, a disability can also impact a dentist's reputation and patient trust, which are vital for a thriving practice. Therefore, having a robust safety net in place not only protects personal finances but also ensures that patient care can continue seamlessly, even in challenging circumstances.
Disability Insurance Options for Dentists
Dentists can explore several disability insurance options, much like their physician counterparts:
- Individual Disability Policies: These policies provide tailored coverage specific to the dental field and are portable across different practices.
- Employer-Sponsored Plans: Many dental practices offer group disability plans that may be more affordable, although they may come with limitations.
- Specialized Contracts: Some insurers offer contracts specifically designed to meet the needs of dental professionals, covering scenarios like practice overhead expenses during a period of disability.
Dentists can explore several avenues for disability insurance:
- CDSPI’s DisabilityGuard™: The Canadian Dental Services Plans Inc. (CDSPI) offers DisabilityGuard™, an own-occupation policy specifically for dentists. It provides comprehensive coverage, allowing you to receive benefits if you're unable to perform dental duties, even if you can work in another field. Eligibility requires membership in the Canadian Dental Association or a participating provincial association.
- Provincial Dental Associations: Many provincial dental associations partner with insurers to offer group disability plans to their members. While these plans can be cost-effective, it's important to review the terms carefully to ensure they meet your individual needs.
- Independent Insurance Brokers:
Working with an independent broker like Blue Alpha Wealth allows you to compare policies from various insurers, ensuring you find coverage that aligns with your specific requirements and budget.
Given the specialized nature of dental work, securing own-occupation coverage is particularly beneficial for dentists.
Recent Changes in Disability Insurance for Dentists
The disability insurance landscape for dentists has evolved, with notable changes from major insurers:
As of November 24, 2024, Canada Life implemented major changes to their disability insurance offerings for general practice dentists (GPDs):
- Elimination of Own-Occupation Coverage: New policies no longer include own-occupation definitions, meaning benefits may be reduced or denied if you're capable of working in another occupation.
- Increased Premiums: Premium rates have risen, reflecting higher claims and reduced competition in the market.
These changes underscore the importance of securing comprehensive coverage early in your career and regularly reviewing your policy to ensure it meets your evolving needs. Staying informed about such changes is crucial to ensure your coverage remains adequate and aligns with your professional needs.
Assessing Disability Insurance Policies for Dentists
It's advisable to compare these options, considering factors like coverage specifics, premiums, and the insurer's reputation.
Assessing policies involves understanding the nuances of what each plan covers and its associated costs. Dentists should pay particular attention to the fine print of the policy, including the definitions of total and partial disability, elimination periods, and benefit lengths. It’s also advisable for dentists to consult with insurance brokers who specialize in healthcare professions, as they can provide insights into the best options available and help navigate the complexities of different plans.
Taking the time to carefully analyze policies can prevent potential gaps in coverage that might jeopardize financial security. Furthermore, dentists should consider the impact of their specific practice type—whether they are in a solo practice, part of a group, or working in an academic setting—on their insurance needs. Each scenario may present unique risks and financial implications, making it essential to choose a policy that aligns with their professional circumstances and personal financial goals.
The Process of Obtaining Disability Insurance
Acquiring disability insurance can initially seem daunting, but breaking it down into steps can make it manageable. The proper approach is essential to ensure adequate coverage for unexpected circumstances. The key question for medical professionals is choosing where to buy their disability insurance - through an association plan like the OMA or privately through a broker. Key difference being control. With an association plan you don't control changes to the plan like the cost and limitations to the plan. With a private plan you control it and it can never be changed. Blue Alpha Wealth is an independent disability insurance broker working with various insurance companies to provide you with private personally owned policies. This gives us insight into the most appropriate companies for doctors and dentists.
In our opinion the comprehensive disability income protection plan offered by the RBC Professional Series Disability Income Protection Standard Issue Plan provides Ontario physicians with essential financial security against potential income disruption due to disability.
How Much Does Disability Insurance Cost for Physicians?
RBC Professional Series Cost Examples Based on Specialty
Below are estimated monthly premiums for a $10,000 monthly benefit with a 90-day elimination period and own-occupation coverage (keep in mind your age could increase or decrease the amount in this example):
- General Practitioner (GP): $150 - $250
- Surgeon: $300 - $500
- Anesthesiologist: $350 - $550
- Dentist: $250 - $400
- Psychiatrist: $200 - $300
Discounts for Medical Professionals
RBC and other insurers offer special discounts for physicians, medical residents, and specialists. These discounts can include:
- Association Discounts: Reduced premiums for members of medical associations like the Canadian Medical Association (CMA) or provincial medical organizations.
- Group Rate Discounts: Lower rates for physicians who purchase insurance as part of a hospital or clinic network.
- Residency Discounts: Reduced premiums for medical residents and fellows, making it more affordable to secure coverage early in their careers.
Factors Influencing Disability Insurance Premiums
Premiums are determined by various factors:
Age: Younger individuals typically pay lower premiums.
Health History: Pre-existing conditions can increase premiums or lead to coverage exclusions.
Smoking Status: Smokers often face higher premiums due to associated health risks.
Gender: Premiums can vary based on gender, reflecting statistical differences in disability claims.
Income and Specialty: Higher income levels and certain specialties may influence the amount of coverage needed and, consequently, the premium.
RBC Professional Series: Specialty-Specific Features Tailored to Physician and Dentist Needs
The RBC Professional Series disability plan includes several features specifically beneficial to medical professionals with their unique practice patterns and high income levels. Compare this to the Ontario Medical Association Plan (OMA)or the Canadian Dental Services Plans Inc. (CDSPI).
Return-to-Practice Provisions and Continuity of Care
Recurrent disability protection represents a crucial safeguard for physicians and dentists whose conditions may improve temporarily but recur. If disability returns from the same or related cause within 12 months of recovery, RBC considers it a continuation of the prior disability period and waives the elimination period. This provision acknowledges the potentially episodic nature of some conditions and prevents repeated waiting periods that could otherwise create financial hardship.
Additionally, the return-to-work assistance benefit provides support beginning from the first day of disability, potentially including retraining, education, and workplace modifications. For physicians, this might include adaptations to medical equipment, office layout changes, or administrative support that enables continued practice in a modified capacity.
The presumptive total disability provision offers immediate full benefits without requiring total disability if the physician permanently loses sight, speech, hearing, or the use of two limbs. This protection recognizes catastrophic impairments that would unquestionably impact dental or medical practice, streamlining the claims process during already difficult circumstances.
Financial Protection Mechanisms for High-Income Earners
Physician and Dentist incomes typically place them in higher earning brackets, making robust inflation protection essential. The RBC Professional Series addresses this through annual inflation adjustments to prior earnings based on the Consumer Price Index, with guaranteed minimum adjustments of 2% compounded annually and a maximum of 10% compounded annually. This feature helps prevent the erosion of disability benefits during extended disability periods.
The plan also provides flexible prior earnings definitions for calculating residual disability benefits, allowing physicians to select the most favorable calculation method. This flexibility acknowledges the potentially variable income patterns in medical practice, particularly for those transitioning between different practice arrangements.
For dentists or physicians concerned about premium payments during disability, the waiver of premium provision eliminates this burden after 90 days of disability and refunds premiums paid during the initial 90-day period. This feature removes the financial strain of maintaining coverage during periods of income disruption.
Policy Limitations and Important Considerations
Despite comprehensive coverage, physicians and dentists should be aware of certain limitations and exclusions that may affect their protection.
Pre-Existing Condition Provisions Affecting New Physicians
The pre-existing condition limitation represents a significant consideration, particularly for physicians with established health conditions. The policy generally excludes coverage for disabilities resulting from conditions for which treatment, consultation, or medication occurred during the pre-policy period (typically 24 months before policy issuance). However, this limitation expires after the post-policy period, making long-term coverage more comprehensive.
For younger physicians just establishing their practice, securing disability coverage early minimizes the impact of these limitations. Early application typically means fewer pre-existing conditions to consider and allows any waiting periods to expire during the physician's working years.
Additional exclusions apply to disabilities resulting from war, insurrection, self-inflicted injuries, normal pregnancy, and participation in criminal acts. While these standard exclusions affect relatively few claims, physicians should understand these boundaries when evaluating their coverage needs.
Integration with Other Physician Benefits in Ontario
Ontario physicians may have access to multiple sources of disability benefits beyond private insurance like the RBC plan. Understanding how these various benefits coordinate is essential for comprehensive financial planning. In some cases, benefits from one source may offset or complement those from another, influencing the optimal coverage amount.
When determining appropriate coverage levels, physicians should consider both their current income and future earning potential. Given the typically upward income trajectory of medical careers, some may benefit from insurance riders that allow for future increases in coverage without additional medical underwriting
Policy Comparison: RBC Professional Series vs. Canada Life Lifestyle Protection Plan
Below is a comparison of the key features of the RBC Professional Series Disability Income Protection Plan and the Canada Life Lifestyle Protection Plan, both of which are popular choices for professionals seeking long-term disability insurance.
Key Disability Insurance for Doctors Differences
Built-In Features vs. Riders: RBC includes partial and residual disability benefits as part of its base policy, while Canada Life requires these as optional riders.
Cost of Living Adjustment (COLA): RBC offers CPI-based adjustments with guaranteed minimum increases, whereas Canada Life provides more flexible but less predictable COLA options.
Target Market: RBC caters more specifically to high-income earners and professionals with complex needs, while Canada Life appeals to a broader range of occupations.
Catastrophic Coverage: Canada Life provides additional lump-sum payments for catastrophic disabilities that RBC does not.
Feature | RBC Professional Series | Canada Life Lifestyle Protection |
|---|---|---|
Target Audience | High-income professionals, including physicians and executives | Broad range of professionals |
Renewability | Non-cancellable and guaranteed renewable until age 65; conditionally renewable for life | Non-cancellable until age 65; conditionally renewable after age 65 if working full-time |
Elimination Periods | Flexible: 30, 60, 90, to 730 days | Standard options available; specifics depend on policy customization |
Benefit Periods | Options include 2 years, 5 years, or to age 65 | Benefit period typically extends to age 65; reduced to 24 months after age 65 |
Total Disability Definition | "Own Occupation" definition built into the base policy | "Own Occupation" available as an option for certain occupation classes |
Partial & Residual Benefits | Included in base policy; residual benefits based on income loss | Residual benefits available but must be added as a rider |
Cost of Living Adjustment (COLA) | CPI-based adjustment with a minimum increase of 2% and maximum of 10% compounded annually | Two options: up to 8% maximum (with a minimum of 2%) or up to 3% maximum (no minimum guarantee) |
Presumptive Disability | Full benefits for catastrophic conditions like loss of sight, speech, hearing, or limb use | Similar presumptive disability benefits; includes additional lump-sum payment for catastrophic disabilities |
Future Income Option (FIO) | Allows annual increases without medical underwriting; double option available at first anniversary | Available but may require additional riders |
Premiums | Level premiums guaranteed until age 65 | Level premiums guaranteed until age 65 |
Additional Features | Return-to-work assistance, retirement protection rider, first-day hospitalization benefit | Lump-sum payments for catastrophic disabilities; broader availability of "Own Occupation" rider |
Conclusion
- Choose RBC Professional Series if you are a high-income professional seeking comprehensive built-in features like residual benefits and robust inflation protection.
- Choose Canada Life Lifestyle Protection Plan if you prefer flexible customization through riders or need coverage across a broader range of occupations.
Disability Insurance for Students, Residents and 1st Year Practitioners: RBC Medical Student Offer
The RBC Medical Student Offer is a specialized disability insurance program designed specifically for medical students and doctors. It offers comprehensive coverage that is tailored to the unique needs and circumstances of medical professionals.
Key Features of RBC Medical Student Offer Disability Insurance
- No Medical Underwriting Required: Simplified application process with no medical exam necessary for certain discounts.
- Exclusive Discounts:
- 10% discount with no medical exam required.
- 25% discount available with medical underwriting.
Key Policy Features and Options:
- Own-Occupation Definition of Disability: Ensures coverage if you cannot perform your specific medical specialty.
- Cost of Living Adjustment (COLA): Protects benefits from inflation over time.
- Future Income Option: Allows coverage to increase up to $25,000/month as income grows.
- Coverage for HIV, Hepatitis B & C: Ensures protection in the event of occupational exposure.
- Conversion to Long-Term Care Coverage: Option to convert coverage for long-term care needs later in life.
- Critical Illness Insurance: Includes $100,000 in critical illness insurance as secondary protection.
- Easy Enrollment: Simple one-page application form.
Disability Insurance Coverage by Year of Study
The monthly disability benefit a medical student qualifies for depends on their year of study:
- Years 1-2: $2,000/month
- Year 3: $3,000/month
- Year 4: $4,500/month
- Up to 12 months of free coverage available.
Discounts and Free Coverage Periods
- No Medical Exam Required:
- 10% discount
- Up to 12 months of free coverage
- With Medical Underwriting:
- 25% discount
- Up to 5 months of free coverage
Disability Insurance for Residents and Fellows
- Residents: Eligible for up to $4,500/month in disability benefits.
- Fellows: Eligible for up to $8,500/month in disability benefits.
- Residents and fellows receive up to 5 months of free coverage.
Steps to Acquiring Disability Insurance
- Assess Your Needs: Evaluate your current financial situation and consider how much income you would need to cover expenses in the event of a disability.
- Research Policies: Explore different options available from various insurers, comparing benefits, costs, and coverage.
- Consult Professionals: Seek advice from financial planners or insurance brokers who specialize in disability insurance.
- Apply: Complete the application process, providing requested medical history and personal insights.
Understanding the Underwriting Process
The underwriting process is the insurer’s way of assessing risk. This step may involve a thorough review of your medical history, lifestyle, and other factors that can determine the terms of your coverage. It's essential to answer all questions honestly to avoid potential issues with claims in the future.
Tips for a Successful Disability Insurance Application
When applying for disability insurance, thorough preparation can make a significant difference in outcome:
- Complete Documentation: Ensure all medical records and supporting documents are accurate and up to date.
- Be Honest: Provide truthful information regarding your health and history to prevent complications later.
- Ask Questions: Don’t hesitate to clarify any aspects of the policy that are unclear before signing.
physician disability insurance
Conclusion: Disability Insurance for Canadian Physicians & Dentists
By following these tips and understanding the intricacies of disability insurance, Canadian physicians and dentists can secure their professional and financial well-being.
Frequently Asked Questions About Disability Insurance
In general, you can calculate based on average. On average, for a standard disability insurance policy, it will cost a doctor between 1% - 4% of your income. Another rule of thumb is 2% - 6% of your benefit amount on a monthly basis. For example 2% of a $10,000 monthly disability benefit would be $200/month. What factors go into calculating your disability insurance quote?
How Is My Rate Calculated?
- Age, Gender and Smoking Status
- Health such as medical history, prescriptions you take and pre-existing conditions
- Medical specialty
- hazards of your job
- how difficult it is to return to work following an injury or illness
- claims history for your particular specialty
- Financial underwriting such as your income, past bankruptcy, earned and unearned income
- Benefit length i.e. do you need coverage to age 65 or for life
- Elimination period - how long can you go before you start getting your benefit paid? This is like a deductible which will make your cost lower. For example, most doctors request a 90 day waiting or elimination period.
In short, the OMA plan is a type of group plan which is insured by an insurer such as Sun Life insurance or Manulife. This means, they "group" you together with other physicians across Ontario. They group their illnesses, claims, risk etc. together with your and use this to calculate your rate. What that means is your rates will go up often because if you are a good policyholder you will be used to underwrite the "bad apples" in the group.
- Your OMA rates are not guaranteed. Our rates are guaranteed and protected.
- Under OMA, the insurer controls your policy. With a private plan you control and own the policy
- OMA has more definition restrictions to your plan compared to private plans. This may not seem important until you make a claim.
- Total disability definition reverts to "any occupation" meaning if you can do any job you are required to take that. We offer "own occupation" which requires you to go back to your specific specialty.
Blue Alpha Wealth is an independent broker for disability insurance. With an individual insurance plan, your rates are locked in as long as you pay your premiums and you get better and more generous policy provisions and guarantees on your definitions of a disability. The insurance company cannot make changes to your policy unlike the OMA plan, only you can change your policy.
Any type of disability plan you have in place to protect and replace your income in the event you can't work due to sickness or injury, is the best plan to have. However, if you have an opportunity to plan it out in thinking about future needs and protections, here are some important features to have in your disability insurance plan as a doctor.
- Own occupation definition of disability that pays until you're only able to do the duties of your specific specialty.
- Non-cancellable and guaranteed renewable insurance policy. Only you can cancel and change your policy and the insurance company guarantees your policy will remain in-force.
- Partial or residual benefits. Partial benefits to cover you if you're able to still work but only partially. Residual to make you "whole" in terms of your earnings prior to a disability.
- Cost Of Living Adjustment rider. Inflation impacts the purchasing power of your money over time increasing your cost of living especially on a fixed income like disability insurance.
- Future Purchase Increase Option. Lock in the right to increase your coverage in the future as your income rises without worrying about your health status.
You choose what features are most important to you and adjust and add as you go along. Start with a good base at a price you can easily afford and benefit amount that will make you comfortable when you make a claim.
“You are not able to perform the material and substantial duties of your occupation, even if you are gainfully employed in another occupation. If you meet the definition of totally disabled and you become employed in a new occupation, your total disability benefit will not be affected by any income from the new occupation, regardless of the amount.”
Disability insurance benefits paid to you when you hold a private individual plan are not taxable because the premiums you pay have been paid with after-tax dollars. If you are a part of a group disability plan or an association-based disability plan like Ontario Medical Association, your disability benefits will be taxable if they were paid with pre-tax dollars.
Yes! If you want to make modifications to your application and add or remove features to a standing policy at any time. Just get in touch with us at Blue Alpha Wealth.
There are association and hospital discounts that arise from time to time with insurers like RBC Insurance to provide affordable disability insurance coverage. In many instances, per case, we can negotiate a discount on your behalf.
No, not when you buy a disability insurance policy on an individual private basis. These types of policies are non-cancellable and guaranteed renewable meaning only you can change and cancel the policy. If there is a change it will be for every doctor your gender and age across the province and not specific to you individually. With a group plan like OMA, your plan changes regularly due to claims history of the whole group and how expensive those claims are to compensate for the plan.
Residual disability benefits cover a partial loss of income due to a disability. Residual benefits come into play for you when, due to a disability, you have a percentage loss of income, usually 15% or 20% depending on the disability insurance company. At that point, residual benefits will be paid out to you. Residual benefits can be included in the base policy or offered as an additional rider on a long term disability insurance policy that you purchase.