Disability Insurance For Doctors

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 a major insurance company like Sun Life insurance. 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 insurance company 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. These discounts will be applied at the time of your disability insurance application. These discounts range from 10% to 25%.

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.