Career Development

Injured? Can’t practice your specialty? Make sure you’re covered

Len Strazewski , Contributing News Writer

You have studied and trained for years to build your skill in your physician specialty. Your practice and your income grow along with your record of strong patient outcomes and reputation, from a low level as a resident to a very high level as an expert.

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Then suddenly, you can no longer practice that specialty. Injury has affected your ability to operate, or some neurological condition affects other skills. You can still practice medicine but not in that specialty, and your income drops accordingly.

This could be a disaster for physicians who are still paying off debt, but that income at its highest level can be protected with the right type of disability insurance, according to J. Michael Hegwood. He is assistant vice president of brokage marketing of AMA Insurance Agency Inc., an American Medical Association subsidiary.

“It was important to create more flexibility within our disability program and introduced new coverage options last year,” Hegwood said. “This coverage—introduced in the summer of 2022—is available through AMA Insurance and is underwritten by New York Life Insurance, and the added flexibility can be particularly valuable for young physicians.”

“As a cardiologist, for instance, you might go from making $60,000 as a resident to earning $400,000 in practice. That ability to earn a living as a physician, in this case as a cardiologist, is extremely valuable and should be insured,” said Hegwood.

Notably, New York Life Insurance Co. is A++-rated by A.M. Best. That superior rating, the highest handed out by the world’s oldest credit-rating agency, represents a forward-looking, independent and objective opinion regarding an insurer's relative creditworthiness.

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By definition, A.M. Best assigns the A++ rating to insurance companies that have, in their opinion, “a superior ability to meet their ongoing insurance obligations.” Hegwood noted that “young physicians have different needs than midcareer physicians who may have paid off medical education debts.” The policy “can be tailored to their particular situation and income levels” and linked to the income of the physician’s specialty.

Find out more from AMA Insurance about disability income insurance for physicians.

Not all disability insurance policies are alike, and some are not necessarily tailored specifically to physicians. Plus, traditional group disability insurance provided by many employers won’t always cover specialty levels of income, Hegwood explained.

Physicians employed by a corporate health system may be offered group disability insurance, which can help protect some income, but typically isn’t designed to cover the higher compensation of a specialist.

Most physicians need something more that tracks their expenses and income into the future, Hegwood explained. Most medical students “incur significant debt, with the average approaching $200,000. But as you move into practice, your income is likely to increase significantly.”

The AMA-sponsored Disability Income Insurance allows physicians to customize their insurance to their specialties and income levels, while also aligning with their budget, Hegwood explained.

“AMA Insurance puts young physicians in control of their disability coverage,” he added. “Rather than settling for what’s available, they can design a plan that meets their specific needs and their budget. The flexible premium structure of the AMA-sponsored Disability Income Insurance Program can help physicians on tight budgets as well as those looking for rates designed to stay the same over the life of the plan.”

Disability insurance plans that lock in their rates come at a cost, Hegwood noted, since insurance is typically less expensive when you’re younger and healthier and grows more expensive as you age. To lock in a rate, an insurer must subsidize the true cost of insurance for older clients by charging more for those who are younger.

Meanwhile, given concerns about inflation, AMA Insurance offers an optional cost-of-living-adjustment rider for its physician disability insurance. With it, the monthly benefit payable for a covered total disability may be adjusted annually to reflect changes in the cost of living.

The AMA-sponsored plan also features a “true own-specialty” definition of disability that allows physicians to protect the income they earn in their specialty even if they decide to work in another medical field.

AMA Insurance offers disability income insurance for every stage of a physician’s career. Coverage for physicians is completely portable, with up to $15,000 per month in benefits. Policies for resident physicians are specialty-specific and have a flexible premium structure. Coverage for medical students starts at just $41 per year and comes with guaranteed acceptance.

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The AMA-sponsored plan also allows the insured to increase disability coverage as the physician’s income rises, without medical underwriting—meaning the insured can increase coverage regardless of their future health situation.

“This can be an especially attractive feature for young physicians who have not yet reached their peak earnings potential. As you transition from residency to practice, an ‘increase option’ in your disability contract provides an effective way to increase your coverage, commensurate with your higher income as a practicing physician,” Hegwood said.

Navigating physician disability insurance options can be tricky. That’s why AMA Insurance has a team of noncomissioned licensed insurance agents to “help answer questions physicians may have about disability coverage,” Hegwood said.

These insurance specialists “are available to help physicians select a plan that best aligns with their needs,” he added. “They’re here to serve physicians. It’s all they do.”

In addition to its AMA-sponsored plans, AMA Insurance offers many other disability insurance plans, Hegwood said.

Whether you’re looking for a more traditional individual disability insurance plan, coverage tailored to your practice, or even a plan specifically designed for a medical school, residency program or teaching hospital—we’ve got disability insurance solutions for every stage of a physician’s career.”

Learn with the AMA about how to evaluate your physician disability insurance policy.