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As a chiropractor, your work is hands on…literally! You enjoy the challenge of fixing and solving problems. Moreover, you particularly enjoy how you help your patients get back to their everyday life! You rely on your professional skills and education as well as your physical ability to get the job done. What if you could no longer do that job? Have you ever thought what would happen if you became sick, ill, injured, and disabled? How would you pay the bills if you could not work? Disability quickly affects your future plans and the lifestyle you worked so hard for. In this article, we discuss disability insurance and the best disability insurance for chiropractors.
More Important People Rely On You
Your patients are very important. There is also a group of people who are more important. Who can be more important than my patients, you think. They pay my income. Without them, I wouldn’t have an income.
True. They do pay your income, which keeps your business going. However, they don’t love you as your family loves you. By far, if you have a family, your spouse and children rely on you more than you think. They love you more than anything.
There are tough questions that need answering. Would you and your family be able to continue your standard of living without your income? If not, what changes would need to be made? Would your spouse have to work or work more? Would you need to sell your home to make ends meet? Who could be flexible with the children? Would you have the money to hire someone to take care of the kids? The tough questions can go on and on.
Disability is known as the destroyer of dreams. Your future and family dreams could be destroyed. They don’t have to, though. With disability insurance, you have peace of mind knowing that you have a plan – and income – in place should the unexpected happen.
Yes, But It Won’t Happen To Me
You think it won’t. However, the probability of having a long-term disability is anywhere between 1 in 3 and 1 in 4 workers. Contrast this to unexpected death, say from a motor vehicle accident, which is 1 in 114. Even dying from cancer has better odds: 1 in 7.
But, John, I’m not going to get hurt or be in a wheelchair, you say. Wow! I respond. If you know that, then you should not be a chiropractor. You need to play the lottery! You won’t have to worry about income at all!
In all seriousness, when we think of disability, we think of someone bound in a wheelchair, right?
Not true. According to the Council For Disability Awareness, 90% of disabilities are from illnesses (like cancer) than from accidents. That means an illness or condition, such as cancer or a heart condition, has a higher probability of disabling you than a skiing accident.
Ok, John, but I have workers compensation. I don’t need to worry about money. That’s great, I say. Did you know that 5% of disabling conditions are work-related, leaving the other 95% not covered by workers compensation? That makes sense since 90% of disabilities are from illnesses.
Again, what is your income plan if you can’t work?
The Importance of Disability Insurance For Chiropractors
Hopefully, we have made a great case showing that chiropractors need disability insurance. You already have some through work? While that is good, most likely it is not enough. Why?
Generally speaking, you pay for your group (i.e., work) disability insurance through pre-tax deductions from your paycheck. While that seems good, as it lowers your income for income tax purposes, it is not good if you need to take a benefit. The benefit ends up being taxable income. What does this mean? By every April 15th each year, you need to report your disability benefit and pay taxes on it, which can put additional strain on your finances. This makes, in effect, your net-disability pay being about 30-40% of your gross salary. Can you and your family live off that?
The good news is that incrementally, you may not need much more. How much you need depends on your income and needs. Most importantly, you will have peace of mind. In the case of your disability, you will receive a benefit that helps maintain your standard of living, cover costs such as your mortgage, utilities, and groceries, and keep your family dreams and future alive.
Disability Insurance Policy Basics
While every carrier is different, here are the important policy basics for chiropractors.
You generally can cover up to 70% of your gross salary. Every carrier is different, though. Some have 60% coverage maximums. For example, if you have a gross monthly salary of $5,000, you can cover up to $3,500 (70%).
Obviously, your health matters for underwriting. What you may not know is that your occupation matters, too. Most carriers will not cover high-risk professions for the simple reason of an increased probability of disability. Carriers classify the risk from a scale of 1 to 5 or B to 5A. The lower the number or letter, the riskier the occupation, and the higher the premium, all things being equal. Chiropractors are typically classified as a 1 or 1A.
There is an elimination period, which is like a deductible. It is the length of time – a waiting period – that elapses before disability benefits begin. For example, a 90 day elimination period means your benefit period will begin after 90 days of disability. This means you need to have adequate savings to carry you and your family until benefits begin.
The maximum benefit period is 5 years. This means your disability benefits will stop after 5 years of disability.
Many chiropractors have told us they just can’t get individual disability insurance. Carriers preclude their profession, or they say it is just too expensive. We will get more on that in a minute, but you CAN get disability insurance and it is likely less expensive than you think. Maybe you searched the wrong carrier?
The Definition Matters…
The definition of disability matters. You generally want “true own-occupation” coverage followed by a form of modified own-occupation. What is “true own-occupation”? Simply, it means you can continue to work in another occupation while receiving disability benefits for your own occupation as a chiropractor. So, if you can’t use your hands, but you can greet people at Walmart, you will receive disability benefits in addition to your earnings as a Walmart greeter.
Modified own-occupation is a bit different. You will receive a disability benefit based on your education and duties as a chiropractor. However, you can’t work in another job. So, if you worked as a Walmart greeter, you won’t receive disability benefits under the modified own-occupation definition.
Finally, there is the stringent “any occupation” definition. This means, simply, if you can work in any gainful occupation (for which you are reasonably suited, considering your education, training, and experience), the carrier will deny benefits. So, under this definition, you won’t receive a disability benefit based on your education and experience as a chiropractor because the insurance carrier says you can work as a Walmart greeter.
The plans we work with contain the favorable true own-occupation definition for chiropractors. Moreover, you can align this definition to match some or all of your benefit period.
Disability benefits from individual plans are income tax-free. As we mentioned, the benefits from group disability insurance plans are typically taxable.
There are various additional benefits available including, but not limited to, partial disability, recurrent disability, and a survivor benefit if you were to die from your disability within a specified timeframe.
Optional Disability Insurance Riders
You can add optional riders at an additional cost to your policy to best fit your needs and budget. Some popular rider options for chiropractors include:
Return of Premium Rider: Provides disability insurance coverage if you need it, your money back if you don’t.
Guaranteed Insurability Option Rider: Allows you to obtain the coverage you need now with the option to purchase additional coverage in the future without evidence of good health. You generally can purchase additional coverage every 2 years up to age 55. (You do not need to wait 2 years if you had a life change, defined as a marriage the death of a spouse, divorce or birth or adoption of a child; Instead within 3 months of a life change, you may purchase additional coverage.)
Retroactive Injury Benefit Rider: Pays benefits from the date of disability due to injury if disability occurs within 30 days of the injury and continues through the elimination period.
Activities of Daily Living Rider: This rider pays an additional benefit if you can’t perform two or more of the activities of daily living. Additionally, it will pay if you are cognitively impaired. This is also known as a catastrophic disability. In other words, this rider will pay an additional benefit if you need help or assistance with your first 20 minutes of your day – dressing, toileting, eating, transferring (i.e. walking), bathing, etc.
Residual Disability Rider: This rider will pay a benefit if you return to work in your occupation, and you experience an income loss of 20% or more compared to your pre-disability income. Usually, the amount of disability income you receive is a percentage of your total monthly disability benefit. For example, let’s say you return to work and experience a 40% income loss. If your monthly disability benefit is $4,000, you will receive $1,600 ($4,000 X 40%).
An Important Rider
Why would you need this residual disability rider? Most disability insurance policies allow partial disability benefits upon total disability first. What does this mean? You will not receive any benefits until you have met the carrier’s requirements for total disability first. That usually requires you to work through the elimination period. How can you do that if you are partially disabled and still working?
Typically, this rider circumvents the total disability requirement and allow you to receive partial benefits after meeting the elimination period. Since many disabilities begin as a partial disability, this rider, in our opinion, is worth its weight in gold.
Protect Your Business If You Are A Business Owner
Are you a business owner? If so, you have an advantage. You can enroll in a policy that will pay your business expenses upon a disability. The policy is called a business overhead expense policy. Premiums are tax deductible. If structured properly, benefits are tax-free as well. This type of policy will ensure your business remains solvent during your inability to work from a disability. This is an additional reason why chiropractors need disability insurance. Contrast this policy to a traditional disability insurance which pays a percentage of your income.
Carriers who offer this type of insurance typically offer a discount on an individual disability insurance policy.
The Best Disability Insurance For Chiropractors
You are probably wondering who we like to work with. First, we work with many disability insurance carriers. So, we are sure we can find one that meets your needs and budget.
However, there is one carrier that stands out to us. That carrier is Assurity. An A- rated carrier, Assurity operates in the middle-income market. More specifically, it offers a niche product designed for professions like chiropractors. They offer a variety of options that customize to your specific situation. Moreover, the premiums are generally very competitive. They even offer simplified underwriting (i.e., no medical exam) in many cases. Also, they allow a 5 year benefit period when most carriers offer a 2 year benefit period for chiropractors.
We also like working with Peterson International, which has a nice individual disability insurance plan for chiropractors as well.
We also work with a good carrier on the group insurance side. If you would like to insure yourself and someone else in your company, Reliance Standard offers a great long-term disability plan. Depending on the number of participants, you could apply at guaranteed issue (which means no medical underwriting)! Family members and spouses can apply, which is usually not the case with most small group insurance plans. That means husband and wife chiropractic groups are eligible. Monthly benefits are up to $7,500 per month.
The Math Works…
We receive a lot of responses from chiropractors about cost. They think individual disability insurance is too much. Let’s test that theory. A 35 year-old male chiropractor, non-smoker, with a $3,000 monthly benefit, 2 year benefit period could expect to pay around $60 to $70 per month for a base policy. That averages to about $2.00 to $2.50 per day.
Is it worth $2.50 per day to protect your income and what you have worked so hard for? We insure our home, cars, and other material things, but we overlook protecting our ability to earn an income. How can you afford your car or your material things if you don’t have your income?
Depending on your health and riders, the premiums could run anywhere from $2.50/day to $4.00/day. Think that is expensive? I bet you buy coffee almost every day or your lunch. What is more important? Insuring your income or buying a cup of coffee?
There are many ways to afford disability insurance.
We hope now you have a solid idea why chiropractors need disability insurance. Confused? Don’t feel that way. We’re here to help educate you and protect your income and future. Don’t know where to start? Use this disability insurance needs analysis worksheet. Follow the instructions; it is rather easy to fill out (we at My Family Life Insurance try to make understanding insurance easy). Next, feel free to reach out to us for our assistance or a quote. Or, use the form below. We only work for you, your family, and your best interests only. We have helped many chiropractors secure the right disability insurance for their specific situation, giving them and their families peace of mind.