Physicians Insurance Plans
You have finished four years of undergraduate work. You have finished four years of medical school.
And now, as you finish your residency, it’s exciting to think about what comes next as you—finally—embark on your career as a physician.
Yet this time can also be daunting. With any big change comes hard decisions. Should you pursue a Fellowship for further specialization? Should you continue to practice in a hospital setting? Are you ready to join a private practice or even start your own?
There is also the financial aspect of this important life change. While you may be looking forward to a larger salary, you may also be facing the prospect of student loans coming due. You may be thinking about a permanent home. You may have a family that you now need to support and provide for.
And as you consider your career and your finances, it’s also important to start thinking about insurance.
What Types of Insurance Coverage Do Finishing Residents and Physicians Need?
As you consider your next professional steps, take a few minutes to think about the type of financial protections you need and what insurance coverages will meet those needs.
Some decisions are pretty easy. Obviously, you want to ensure that you and your family have health insurance. In most cases, your employer should offer a group health policy. If you choose to start your own private practice, you will need to purchase a own group health insurance policy for yourself, but also for your employees.
Other insurance decisions are trickier, especially when you are young and healthy. As you embark on the next phase of your career, however, there are two types of insurance policies which should not be neglected.
Disability insurance covers a percentage of your salary should you no longer be able to practice due to a physical disability. The final year of residency is usually the best time to purchase long-term disability because many carriers offer discounts not available once you become an attending.
When purchasing disability insurance, there are a few things you want to be sure to include. An own-occupation policy covers what you would have made as a physician even if you can’t practice and choose another career path. A partial disability rider will make up the difference in salary if you can return to medicine but in a reduced capacity due to disability. A COLA (cost-of-living adjustment) rider will ensure that your coverage keeps up with inflation over time.
Life insurance is a way to ensure that your family is financially secure should you pass away prematurely. This is especially important if you are, or plan to become, the major breadwinner in your family. The death benefit—or the amount of money the life insurance policy pays out upon your death—should be sufficient to ensure that your family can continue to live comfortably after your untimely death.
Do Finishing Residents and Physicians Need Supplemental Malpractice Insurance?
As you look to the next phase in your career, the issue of malpractice insurance can be extremely complicated. Unfortunately, there’s really no easy answer to this particular question.
If you work in a hospital or group practice, you should be covered under your employer’s group malpractice insurance. In most cases—and especially while you are still in your residency—that policy should offer more than sufficient coverage. Still, it’s always a good idea to know the details of your coverage.
The most important issue physicians face is the potential for a gap in malpractice coverage when changing jobs.
Most malpractice insurance today is so-called Claims-Made coverage. Claims-Made coverage will not protect you from a claim once you are no longer covered by that policy, even if the incident occurred while you were covered.
Tail insurance coverage is designed to close this gap. Unfortunately, tail insurance can be extremely expensive. And the issue of who should pay tails coverage can be contentious.
If you are considering changing jobs, and especially if you are planning to take a new job in a different state, it’s important to understand potential gaps in your coverage and who is responsible for purchasing tail insurance.
An independent insurance agent can help you review your malpractice coverage to identify gaps and work with you to develop a plan to manage those gaps.
And as you consider a job change, it is always a good idea to have a lawyer with experience in the medical field review your contract to understand its implications for potential malpractice gaps.
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