Disability insurance is one of the most commonly used forms of personal insurance coverage for physicians. After all, it provides income protection if a person becomes too sick or injured to work. Considering that physicians are amongst the most highly trained and specialized professionals, it only makes sense that most doctors would want to own disability insurance to protect their ability to practice in their medical specialty.
Federal government physicians who are interested in protecting their income must be aware of two primary issues: Disability retirement benefits that are provided through the FERS (Federal Employee Retirement System) program; and individual disability insurance policies that are available through private insurance carriers.
FERS Disability Benefits for Government Doctors
As a Federal government physician under FERS, you are provided a basic level of disability benefits once you have completed 18 months of service. Although this benefit is not commonly referred to as disability insurance, it provides similar benefits to that of a group disability insurance policy.
In addition to understanding the eligibility requirements for receiving disability retirement benefits, it is important to understand how benefits are calculated and how much one can expect to receive, if ever disabled. Based on information provided on the OPM website, the calculation used in determining monthly disability benefits is as follows:
- For the first 12 months: 60% of your high-3 average salary minus 100% of your Social security benefit for any month in which you are entitled to Social Security benefits.
- After the first 12 months: 40% of your high-3 average salary minus 60% of your Social Security benefit for any month in which you are entitled to Social Security disability benefits.
- When you reach age 62: Your annuity will be recomputed using an amount that essentially represents the annuity you would have received if you had continued working until the day before your 62nd birthday and then retired under FERS.
For additional information regarding FERS benefits you can visit FERS disability benefits.
Personal Disability Insurance for Government Doctors
Although Federal government physicians are provided a basic level of disability benefits through the FERS program, there are a number of weaknesses that exist in this coverage, which may leave Federal physicians inadequately protected. Owning a personal disability insurance policy allows Federal physicians to obtain coverage that will pay benefits in addition to the FERS benefits that are paid. Additionally, individual disability insurance policies provide physicians with more comprehensive coverage which is specific to the duties of a their own occupation.
There are a number of individual disability insurance policies available to Federal government physicians through a number of private insurance companies. In order to maximize the selection of policy options, government doctors should consider obtaining disability insurance during the first ten years of working with the Federal government. Once ten years of service are attained, the number of insurance carriers able to offer coverage will be reduced.
Unlike FERS disability benefits which are provided to every employee under FERS, a personal disability insurance policy is medically underwritten, which means that not everyone will qualify. Provided that medical history is not an issue, Federal physicians should work with a licensed insurance professional who is not only experienced with individual disability insurance, but also with the Federal marketplace. Each insurance company offers a different policy for Federal physicians and the financial professional you select to work with should have a complete understanding of these issues.