Optometrists Need Disability Income Insurance.
Optometrists juggle so much, in offering care, building relationships with their patients, and many times directing every aspect of their workplace as a practice owner, or partner in a practice. Disability Income Insurance is a valuable part of their financial life, and we can help research and choose the best Disability Insurance contract for their particular situation.
Why is it so important that optometrists have Disability Insurance in place, especially as they start their practice?
Optometrists need Disability Insurance for the same reason anyone who works to earn their income does…if they were disabled and unable to work, the Disability Insurance would fund their family budget until they could return to work.
As an optometrist completes their school and training, and begins practice, they have just finished a 4 year or longer program of study and training. A program that averages between $100,000 and $175,000 in cost, meaning they have student loans.
And even though they now possess an ability to earn an above average income, that has not been realized yet. Disability Insurance is a protection of this future income for many years in case you are disabled.
Later in their career they may open their own optometry practice or partner with others, which most likely means anew business and / or real estate loan. Disability Insurance again can protect against this financial vulnerability if you were disabled and could not earn your income as an optometrist.
Disability Insurance is the answer to this question optometrists need to ask themselves….If you are disabled and cannot work how will you earn an income to fund your family budget, your practice budget, and pay off loans?
Disability Income Insurance can do all of this. Depending on what policy design you choose, there would be tax free benefits available to a) replace your income, b) pay off student loans, c) continuing saving for retirement, d) offer monies for on-going business expenses, and other scenarios.
You can buy Disability Insurance while still in school or beginning in practice.
Disability insurers base the monthly benefit on your current income. Strong DI insurers also offer special programs for young professionals, including optometrists. The programs offer a set amount of monthly benefit to choose without proof of income.
Students in their 3rd of 4th years can purchase a set amount of Disability Insurance monthly benefit And optometrists just starting in practice, but without any income history, can too.
Once in practice and earning an income, you can add to the monthly benefit as your income increases, to keep your income protection current.
Optometry practice owners need to consider a Business Overhead Expense policy.
Disability Insurance companies also offer a secondary type of disability insurance specific to business owners called “Business Overhead Expense” or “BOE” insurance.
Business Overhead Expense insurance, if the insured becomes disabled, steps in and pays the business’s bills; lease or mortgage payment, staff salaries, insurance, utilities, etc. You can even choose coverage that helps pay for a building loan or practice loan.
Any business suffers when the owner is away. Business Overhead Expense insurance monthly benefits can fund that gap between the lower income (generated by the owner) and the higher costs that keep coming.
If you have a partner in your practice you need Buy-Sell Disability Insurance.
Disability Buy-Sell coverage is designed to provide the funds to assist with the purchase of the disabled insured’s ownership interest in a business in the event of their long-term / permanent disability.
Within a partnership or multiple owner optometry practice, financial devastation could occur as a result of a disability of one of the owners. The disabled owner could no longer contribute to practice income. At the same time, the other owner(s) would not have ready cash to buy the disabled owner out of the practice.
Buy/Sell DI insurance offers either a lump-sum buy-out and/or monthly installment payments. These benefits help provide the funds to assist with an orderly transfer of ownership, and protect both the disabled insured, and the other owners.
As an Insurance Broker We Work With Many Disability Insurance Companies, Including:
Can’t I just choose the Disability Insurance offered through the AOA Excel program?
It is endorsed by the American Optometric Association, so it has to be the best choice, right?
The short answers to these questions are, a) It is one of the options, not the only. And b) Endorsement aside, it is not even close to being the best choice.
There are two main type of DI coverage, group and individual Disability Insurance.
-Group Disability Insurance policies are an insurance contract between a group and the insurer, where few promises are made to you, the insured. The AOA Excel Program is group coverage.
-Individual Disability Insurance policies (the insurance this website explains) are a contract between you and the insurer, underwritten to your specifications. There are many benefit options to choose from, and many promises made.
The strongest, most benefit rich plans are individual Disability Insurance policies.
When comparing the differences between choosing the AOA Excel Program (group) Disability Insurance plan or your own (individual) Disability Insurance policy, the differences to focus on are the “promises made” by the insurance company.
All insurance contracts are based on promises made by the insurer…that is why you pay monthly premium costs to an insurer for in the first place….the promises the insurance company makes in the case that a disability prevents you from working.
Below are six (6) main differentiating factors when it comes to “promises made” with individual Disability Insurance policies from multiple insurance companies vs. the AOA Excel Program.
Individual DI policies promise the possibility of increasing benefit as your income rises. AOA Excel caps quickly.
Throughout your optometry career your income will rise over time due to experience, excellent care, and practice ownership. So your Disability Insurance benefit needs to rise to keep pace with that increase.
Individual Disability Insurance providers promise that you can keep requesting for more base monthly benefit as your income increases, up to a max. that keeps pace with those increases.
The best insurers offer up to $35,000 monthly in benefits if your income warrants it. The AOA Excel plan caps the maximum total monthly benefit at just $7,500.
For optometrists starting in practice with no income history the AOA Excel program offers a $2,000 / mo. benefit. Individual insurers offer $4,000 monthly.
Individual DI policies promise optional benefits important to optometrists. AOA Excel does not.
Many strong insurers offering individual Disability Income Insurance have begun to offer two additional options (for an extra fee), perfect for optometrists:
-Student Loan Reimbursement Option: This optional rider, if the proposed insured becomes disabled and begins receiving the monthly benefits makes additional payments to a disabled insured’s student loan provider while the insured is out of work, covering all or part of the student loan payment due.
-Retirement Savings Option: This optional rider, in the event of disability, while the insured is receiving benefits, other monies are set aside to help the insured continue to save for retirement.
The AOA Excel group plan does not offer either of these two optional benefits in their “Group Long-Term Disability Income Insurance Plan” offering.
Individual Disability Insurance policies promise innovation in benefit options. AOA Excel group coverage does not.
Individual Disability Income Insurance providers improve on their benefits over time to keep pace with our ever-changing financial landscape. For example, individual DI insurers offer Disability Insurance benefits up to age 67, and up to age 70, as options to mirror current retirement age trends.
But the AOA Excel plan is stuck at the older limit of to age 65.
Another example is that the AOA Excel plan offers an “own occ” definition of disability, but benefits are not payable if the insured works in any other occupation.
Individual DI insurers offer the optional “pure” or “true” own own definition of disability where benefits are payable if you cannot work in your occupation, optometry, but choose to work elsewhere in another occupation and earn income.
The AOA Excel group plan limits disability benefits due to mental health / substance abuse diagnoses to 2 years.
Insurers offering individual Disability Insurance offer a choice when you are building your policy.
-You can choose for your policy to cover disabilities due to diagnoses of mental disorder or substance abuse like any other illness, up to the limit of your policy benefits (usually until age 65, age 67 or age 70).
-Or you can choose to have your policy only cover disability due to mental disorder or substance abuse diagnoses for up to 2 years maximum. Choosing this option reduces the monthly premium cost you pay for your DI coverage.
The AOA Excel group plan imposes the 2-year limitation on benefits for mental disorder / substance abuse diagnoses, with no option to extend. If your disability is due to one of these diagnoses, benefits only last 2 years.
Individual DI policies promise that the premium cost cannot rise, ever. AOA Excel group coverage does not.
Individual disability Insurers make an incredible promise when you choose their coverage…that the initial premium cost each month is set for life. The premium cost can never change as you get older or maybe even develop health issues that increase your chance for disabiltiy.
The cost of AOA Excel group DI coverage can rise, whenever the insurer that offers it decides to raise the rates on a class-wide basis. (“class-wide” means for everyone in the group) At any time.
The AOA Excel Program makes no promise of holding cost. At any time you could receive an email or letter with updates on the program that notify you that you will soon be paying more for the group coverage.
Individual DI policies are “non-cancellable and guaranteed renewable.” AOA Excel Program coverage is not.
Individual Disability Insurers offer policies that are "non-cancellable and guaranteed renewable." This tongue-twister of a promise means the only reason the coverage can be terminated is for your non-payment of premium costs.
The AOA Excel Plan makes no such promises, reserving the right to cancel the coverage if they no longer sponsor the coverage, or choose to work with a new insurer.
And if a certain threshold of people do not participate, the plan can cancel immediately.
The promise of “non-cancellable and guaranteed renewable” in individual Disability Insurance ensures you always have access to DI coverage.
The AOA Excel group rules could suddenly leave you without any income protection at all!
The importance of choosing the "own occupation" (or “your occupation”) definition of disability when choosing optometrist-specific Disability Insurance coverage.
"Definition of disability" is very important when considering Disability Income Insurance. Most people purchase a policy with a definition that says the insurer will pay the benefit if they are disabled, but will stop paying the benefit when the person can go back to work in a job “they are suitable for because of education and prior experience.” This definition can be inadequate for someone who invested a great deal of time and money in their specialized occupation (optometric medicine).
The better “Own Occupation” or “Your Occupation” definition states the insurer will pay the benefit for as long as the person cannot work in the exact occupation they were previously working in. And, that if the disabled person cannot do just one of the main, material duties of their job, then the policy still considers them disabled, and continues to pay the benefit. This means if you cannot work in all capacities of your current practice, you are disabled according to the definition of the disability. The illustration goes on to state that the contract will consider your specialty (the practice of optometric medicine) as your own occupation.
You can even choose a “pure own occupation” definition of disability that adds to the above that you can even work in another occupation and still be considered disabled.
The Disability Insurance application process is faster, easier than ever.
It’s easy to joke about insurance companies as old-fashioned and slow to embrace new ideas. But recently we have been impressed with the Disability Insurance industry’s embrace of technology to make applying for coverage easier for you, and to speed up the process. Here are some of the improvements we are seeing:
Online Application and Electronic Delivery of Policy: When we get to the application process we can send you a link to a secure site to input the application information, signing the forms with Docusign. And when the policy is approved and you accept it, you may choose to receive the policy via email delivery of a pdf.
Simplified underwriting can mean no paramed exam, etc.: One requirement of many DI applications is completing a paramed exam, a short physical paid for by the insurer, and conducted by a nurse, to get basic health information from you for the underwriter. But many insurance companies are no longer requiring these under certain age and income limits, choosing to save the time and expense of the paramed exam and rely on other electronic information they can access.
These improvements mean that the DI policy approval process used to take months, but now can be completed in a week or so.
Ready to See Quotes of Disability Insurance Specific to Optometrists? Request a Free Quote Here.
Note: Chip only helps North Carolina residents choose and enroll in Disability Insurance.
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