Part 1. Understanding disability insurance: Essential insights for DCs

As a DC, you have a career built on providing essential care that promotes the health and well-being of your patients. However, have you considered what would happen if an injury or illness prevented you from practicing?

This is where disability insurance becomes crucial. This article aims to guide you through the intricacies of disability insurance, helping you make informed decisions to protect your career and financial stability.

Types of disability insurance

Understanding the different types of disability insurance is crucial for choosing the right coverage for your needs. Here, we’ll delve deeper into two primary types: short-term disability (STD) insurance and long-term disability (LTD) insurance.

Short-term disability insurance

STD insurance is designed to provide financial support during short-term illnesses or injuries that temporarily prevent you from working. Here’s a more detailed look at STD:

Benefit duration. Depending on the policy, STD benefits typically last from a few weeks to six months. This period is intended to cover temporary disabilities, such as recovery from surgery, short-term illness or injury.

Elimination period. The elimination period, or the waiting period before benefits begin, is usually shorter for STD policies, often ranging from a few days to a few weeks.

Coverage percentage. STD policies generally replace a portion of your income, typically around 60-70%, although this can vary based on the policy terms.

Common uses. STD is particularly useful for conditions like severe flu, minor surgeries or minor injuries that require a brief recovery period. It ensures that you have an income stream when you cannot work but are expected to return to your job relatively soon.

Long-term disability insurance

LTD insurance kicks in once the benefits from your STD policy are exhausted. Here’s a closer look at LTD:

Benefit duration. Depending on the policy, the benefit period for LTD can range from a couple of years until you reach retirement age (usually 65) or even for life. This makes LTD essential for serious and chronic conditions that prevent long-term employment.

Elimination period. The elimination period for LTD is typically longer than STD, often starting once STD benefits run out. This period can range from 30 days to one year, with 90 days being quite common.

Coverage percentage. Unlike STD, LTD policies often replace about 60-70% of your income, though higher percentages may be available at increased premiums.

Common uses. LTD is critical for protecting against significant medical issues such as severe musculoskeletal injuries, cancer, heart disease or other long-term illnesses that impair your ability to work for extended periods or permanently.

Return-to-work incentives. Many LTD policies include provisions to support a gradual return to work, offering partial benefits if you can only work part-time during recovery.

Combining STD and LTD

For comprehensive protection, it’s generally advisable to have both STD and LTD policies. Here’s why:

Seamless coverage transition. Both policies ensure a seamless transition from short-term to long-term benefits if your disability extends beyond the STD coverage period.

Financial stability. Combining these policies provides continuous income support regardless of the duration of your disability, mitigating financial strain during challenging times.

Cost considerations. While having both policies might seem costly, the financial security they provide can outweigh the expense, especially given the high costs associated with unexpected medical issues and the potential loss of income.

Case example

Consider Emily, DC, who experiences a severe back injury. Her STD policy covers her initial six-month recovery period, providing 70% of her income. Unfortunately, her condition does not improve, making it impossible for her to return to work. Thankfully, her LTD policy begins after the STD benefits end, continuing to provide 60% of her income until she reaches retirement age, ensuring she remains financially stable throughout her prolonged recovery.

Both STD and LTD insurance play vital roles in safeguarding your income and financial health in the event of an illness or injury. Understanding the nuances of each type and how they complement each other enables you to make informed decisions about your coverage needs. By investing in comprehensive disability insurance, you can focus on your recovery with peace of mind, knowing that your financial future is secure.

Own-occupation vs. any-occupation policies

When selecting disability insurance, one of the most critical decisions you’ll make is choosing between an “own-occupation” policy and an “any-occupation” policy. Each type has distinct definitions and implications for coverage, especially crucial for chiropractors whose skills are specialized.

Own-occupation disability insurance

An own-occupation policy is particularly beneficial for professionals like DCs. Here’s a detailed look at this type of policy:

Definition. Own-occupation disability insurance covers you if you are unable to perform the specific duties of your profession as a DC, even if you are capable of working in another capacity. For example, if a musculoskeletal injury prevents you from performing chiropractic adjustments but you can still teach or consult, you would still receive benefits under an own-occupation policy.

Coverage continuity. This type of policy ensures your income remains protected as long as you cannot perform the exact tasks of your profession, regardless of any other job you might take up. This provides financial stability while allowing flexibility to pursue different types of work within your field or in a completely different industry if desired.

Premium costs. Own-occupation policies generally have higher premiums due to the broader scope of coverage they offer. However, the enhanced protection they provide often justifies the additional cost, especially for those with specialized skill sets.

Case example

Laura, a DC, develops severe arthritis in her hands, making it impossible to perform adjustments. She decides to take a teaching position at a chiropractic college. Under an own-occupation policy, she continues to receive her disability benefits because she cannot perform her clinical duties, even though she is working in an educational role.

Any-occupation disability insurance

Any-occupation disability insurance is more restrictive and typically less expensive. Here’s what you need to know:

Definition. Any occupation policies provide benefits only if you cannot work in any occupation for which you are reasonably suited by education, training or experience. This means that if you can work in another job that matches your skill set, you would not qualify for benefits.

Coverage limitations. This type of policy might not be as beneficial for DCs, given the specialized nature of their work. If you’re disabled in a way that prevents you from performing chiropractic duties but could still work in a related field, you might not receive benefits. For example, if you can no longer practice chiropractic care but can work administratively or as a health consultant, you wouldn’t qualify for benefits under an any-occupation policy.

Premium costs. Any occupation policies usually have lower premiums due to the narrower definition of disability. While more affordable, they offer less comprehensive protection, which might not be suitable for individuals with specialized careers.

Case example

Mark, DC, suffers a back injury that prevents him from continuing his practice. He retrains and becomes a health administrator. Under an any-occupation policy, he would not receive disability benefits since he can work in a related field.

Which policy is right for you?

Choosing between own-occupation and any-occupation policies depends on several factors, including your professional role, financial needs and risk tolerance. Here are some considerations:

Professional specialization. DCs and other specialists should lean toward own-occupation policies to ensure their specific skills and roles are adequately protected.

Financial capacity. Evaluate whether the higher premiums for own-occupation insurance fit within your budget. The cost difference can be substantial, but the value of comprehensive coverage is significant.

Risk management. Consider the likelihood of needing to rely on disability insurance. Those with higher physical demands in their roles may benefit more from the extensive coverage of an own occupation policy.

Career flexibility. If you are open to transitioning into different roles or industries, an own-occupation policy provides more flexibility without sacrificing financial security.

Choosing between own-occupation and any-occupation disability insurance protects your career and financial stability. With their specialized skills, DCs often find that own-occupation policies offer the best coverage, ensuring income protection even if they transition to different roles within their expertise. By thoroughly understanding these options, you can select the policy that provides the most comprehensive support, safeguarding your future against unforeseen circumstances.

In Part 2, we will discuss individual vs. group policies and common pitfalls and how to avoid them.

AL KUSHNER is a distinguished expert in the medical insurance field, with nearly four decades of specialized experience in disability insurance. His deep understanding of disability insurance policies and their implications has significantly influenced how healthcare professionals and individuals navigate coverage options. Leveraging his extensive practical expertise, Kushner provides invaluable insights and guidance to those looking to optimize their disability insurance strategies. For expert advice and impactful solutions in disability insurance, contact Kushner at 561-909-6975 or email him at kushnerconsultants@gmail.com.