Veterinarians Need Disability Income Insurance
We have helped local hospital veterinarians, veterinary specialists and practice owners research and choose the best Disability Insurance for their particular situation for over 25 years. We would be happy to answer your specific questions about Disability Insurance.
Why is it so important that veterinarians have Disability Income Insurance in place?
Everyone who earns their income has a need for Disability Insurance. The veterinary occupation even more so, as veterinarians use their body and mind in their daily work.
People who primarily use their bodies in their work worry that a bodily disability would prevent them from working (ex., a manufacturing plant worker with a back disability). People who primarily use their knowledge in their work worry that an illness or injury could impair their cognitive ability, preventing them from working (ex., a professor).
These two "tools" of our work, body and mind, merge seamlessly in the work of a veterinary doctor.
Veterinarians research and share knowledge with their colleagues and patients, use their knowledge to diagnose and treat, and also use their bodies physically to treat, perform surgery, and care for their patients.
So any type of injury or illness, be it something as simple as a hand injury, or a chronic disease that affects their back (ex., bulging disk), or their cognitive ability (ex., Parkinson's disease) prevents veterinarians from engaging in their full range of duties. This harms, in all or part, a veterinarian's ability to earn an income and fund their family budget.
Can’t I just choose the Disability Insurance offered through the AVMA Life Trust?
It is endorsed by the AVMA, so it has to be the best choice, right?
The short answers to those questions are “You can, but…” and “Not usually.”
First, you must understand the difference between 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 AVMA Trust plan 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.
In short, the strongest, most benefit rich plans are individual Disability Insurance policies.
When comparing the differences between choosing the AVMA Life Trust (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 AVMA offering.
Individual DI policies are “non-cancellable and guaranteed renewable.” AVMA group coverage is not.
Individual Disability Insurers offer policies that are "non-cancellable and guaranteed renewable." This promise means the only reason the coverage can be terminated is for non-payment of premium costs.
The AVMA 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. The insurer can also drop the AVMA coverage if a certain threshold of people in membership do not participate.
The promise of non-cancellable and guaranteed renewable ensures you will always have access to Disability Insurance. The AVMA plan could suddenly leave you without income protection.
Individual DI policies promise optional benefits important to DVMs that the AVMA group plan does not offer.
Many strong insurance companies offering individual Disability Income Insurance have begun to offer two additional options (for an extra fee) that suit DVMs:
-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 AVMA group plan does not offer either of these two optional benefits in their “Disability Income Plan” group disability insurance offering.
Individual DI policies are portable and flexible in occupation. AVMA group coverage is not.
Individual Disability Income Insurance providers make the promise that the policy is portable to other jobs and employers, allowing you to utilize the policy throughout your working career. Even in the rare case of an occupation change, the insurer would cover you in case of a disability experienced while in the new occupation.
The AVMA Life Trust group disability insurance plan is not portable. You must be a member of the AVMA to enroll in, and maintain the coverage. If you dropped AVMA membership, or transitioned into a new occupation, the AVMA group DI coverage would end immediately.
In that case, if your health had changed for the worse over the years, obtaining a new DI policy may be difficult.
The AVMA group plan limits disability benefits due to mental health diagnoses to 2 years.
The AVMA group plan imposes a 2-year limitation on benefits for mental disorder or substance abuse diagnoses, with no option to extend it.
If your disability is due to one of these diagnoses, no matter the length of your disability, benefits only last 2 years.
Insurers offering individual Disability Insurance offer a choice:
-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.
Individual DI policies promise that costs cannot rise for any reason. AVMA group coverage does not.
When you apply for and accept an individual Disability Insurance policy, the insurer makes the promise that the initial premium cost each month is set for life. There is no premium cost increase because you get older, or develop a health issue, or because inflation moves the cost up. The rate is the rate!
The cost of AVMA group DI coverage can rise at any time, whenever the insurer that offers it decides to raise the rates on a class-wide basis. (“class-wide” means everyone in the group).
There is no promise made at all by the AVMA Life Trust in holding costs to your initial cost.
So a surprising letter with a rate increase can show up in the mail at any time.
The AVMA group plan forces you to purchase something called “decreasing term life insurance.”
Eligibility for the AVMA group disability plan includes the requirement to purchase a “Basic Protection Package.” That coverage is essentially a $75,000 group term life insurance benefit that at age 35 begins to decrease in death benefit every year!
Each of us needs to properly plan for our need for Life Insurance, but no one needs “Decreasing Term Life.” That is like buying a new car and each year an important part (tire, window, oil pan) vanishes into thin air! What is the point?
This coverage currently sits at over $5 monthly. A new DVM choosing the AVMA group plan and keeping through retirement would pay $2,400.00 for the coverage over a 40 year span! For disappearing life insurance!
Individual DI policies promise not to bundle superfluous coverage like this with your policy.
The importance of veterinarians choosing the "own occupation" definition of disability.
"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 (veterinary 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 unable to work, 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 policy considers your specialty (the practice of veterinary medicine) as your own occupation.
You can even choose a “pure own occupation” definition of disability that adds to the “own occupation” definition that if you are disabled you will receive monthly benefits, but also that you can even work in another occupation (other than veterinary medicine) and earn income in that other occupation with no decrease in your DI benefits.
How does this translate to real life?
Here is a real life example that well illustrates the importance of choosing the own occupation definition of disability in your DI policy.
One of our clients, a veterinary ophthalmologist, purchased his Disability Income Insurance policy just 6 months after completing his training, and securing his first job. Two years later, while working in his woodworking shop (his favorite hobby) he suffered a deep cut on his hand and fingers and lost the use of one of his hands, with no idea of the healing time or when he would be back to work.
Even though our client still had all of the expertise and experience stored in his brain, the veterinarian's body could no longer fully act on it! Under the first, regular definition I outlined, the insurer might say, after a period of disability where he had recovered, but not the use of his hand, the veterinary ophthalmologist could teach in veterinary school, or just see patients.
He was suited for each of these jobs because of education and experience. But, his earned income would be much lower because he could not perform surgery with the current range of motion in his hand.
With the "own occupation" definition in his DI contract he received the full disability benefit his policy offered since he could not perform surgery, a key component to his practice. If his hand was disabled forever that benefit would have continued to his age 67, per his policy. Luckily his hand healed and was able to return to work within 14 months of the accident. In the 14 month interim his family budget stayed funded because his Disability Insurance benefits.
We Partner With Many Disability Insurance Companies, Including:
Disability Insurance companies excel in different factors of coverage; certain occupations, age groups, benefit options, etc. As an insurance broker (instead of an agent whom represents just one company) we can explore and find the best policy for your specific needs. In short, we can find you the best coverage at the most competitive cost.
You can buy individual Disability Insurance while still in veterinary school.
Insurance companies that offer individual Disability Insurance offer special programs for young professionals, including veterinarians.
You can purchase a set amount of Disability Insurance monthly benefit while still in veterinary school without having to prove a current income. This is so important because you are protecting your future income by purchasing Disability Insurance with your good health as a young student.
Once in practice, you can add to the monthly benefit as your income increases over time.
Veterinary practice owners need to consider an additional “BOE” 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 or business loan.
If disabled, this “BOE” coverage funds your veterinary practice budget, while your DI policy funds your personal family budget.
The cost of Disability Insurance depends in part on the type of veterinarian you are.
One of the cost factors of Disability Insurance is risk, or how dangerous your work is. The more “ hands on” work, and the more claims experience in a certain occupation, the higher the cost.
This means that small animal veterinarians enjoy lower rates than large animal veterinarians, when comparing similar income levels.
And Veterinary Technicians, whom should also consider Disability Insurance, also pay slightly higher rates for “higher risk” at work.
Would You Like to See Quotes of Disability Insurance Specific to Veterinarians? Request a Free Quote Here.
Privacy is something we take seriously. The minimum of information is shared with an insurance company to put together a detailed free quote and illustration for you.
Note: Chip only helps North Carolina residents choose and enroll in Disability Insurance.
