Summary: Know the Risks and Protect Your Income
The risk of becoming disabled due to an accident, illness or injury is high, and as a doctor you see this daily. You might be thinking, it won’t be me, but the risk is always there. Not only does it affect you physically, but it takes a significant emotional and financial toll. Having proper income protection is key to the longevity of your practice. Disability insurance utilized to protect your income will be one of your most important tools in your financial plan.
Ever Been Punched in the Mouth?
Like Mike Tyson says, “everyone has a plan ‘till they get punched in the mouth”. What if your mouth was somewhat important in doing your job?
During their career, one in three Canadians will experience a period of disability that lasts longer than 90 days. That may not sound like a lot and regardless of the stats, when it happens to you, it 100% happens to you.
How Disability Insurance Protects Your Income
Let’s say you have recently graduated from medical school and are beginning to practice as a full-fledged doctor. The endless days and nights of studying are behind you, and you are making good money; $200k-$800k per year for most Canadian doctors. With this cash flow, you can start doing exciting things like buying a house, a nice car, get married, have kids, and pay back some of the loans you may have taken for school.
But, what if as you were walking into the hospital you slipped on the ice and broke your wrist… not a simple break, but a devastating one to the point that you simply can’t do your job. If this example doesn’t ring true because it was conjured up by me, an insurance expert, I’m sure you can imagine an injury or condition equally or more problematic – like Mike Tyson punching you in the mouth. In the best case, you will be off work for 3 months; but in the worst case, you will be significantly impaired from performing the basic tasks of your job, permanently.
As painful as the physical injury is, the financial impact will be equally troubling. You will find yourself making zero dollars, or close to it, for at least a little while. The mortgage and loan payments will keep on coming, and your young family will still be looking to you to “provide”. Even if you have great investments in place, remember that dipping into these will have tax implications. Plus, you don’t want to be forced to sell in a down market. To summarize, you will have plenty of time to binge all seasons of Ozark on Netflix.
Wouldn’t it be good if there was a way to protect yourself from the very uncomfortable situation I’ve described above? There is, and it’s called “don’t ever get injured or sick, ever.” If that seems unreasonable, there is a more proven concept called disability insurance. When you are unfortunate enough to have an injury or develop a condition that impairs your ability to earn a living, this insurance kicks in and you start receiving the cash to see you through.
It’s stunningly simple to get this in place and it doesn’t have to be expensive (think monthly cell phone bill, or a dinner out). It will provide serious peace of mind while you’re healthy, and actual income replacement when you’re not.
Invented by a Doctor
A variant of this insurance was invented by one of your own, Dr. Marius Barnard. He invented critical illness insurance in 1983 after observing the dire financial circumstances his patients often encountered. He saw a need for an insurance-based solution to protect against these situations. Disability insurance is very similar, as it provides you with a safety net if your income suffers from a short or long term disability.
Protect Your Income
Please, take the first step to protect yourself and your income by learning more about disability insurance from an insurance professional. While it’s a simple process, there are many options, and your plan should match your unique circumstances.
To book an initial appointment with Leilah to discuss your possible insurance needs further, please click here.
