As an acupuncturist, relief is your middle name. You enjoy the challenge of helping your clients manage their pain and other health conditions. Moreover, you particularly enjoy how unique your job is! No day is the same. You rely on your education and experience as well as your physical ability to get the job done. What if you could no longer do your job? Have you ever thought what would happen if you became sick, ill, injured, and disabled? How would you pay your 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 acupuncturists.
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 clients, you think. They pay my income.
True. They do, but 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 is “plan B”? Would your spouse have to work or work more? Would you need to sell your home to make ends meet? (That happens too often.) Who could attend the children and their needs? Would you have the money to hire someone to take care of the kids? Will you make the mortgage payment? 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 an acupuncturist. You need to play the lottery! You won’t have to worry about income at all!
Jokes aside. In all seriousness, when we think of disability, we think of someone bound in a wheelchair, right? Not true and far from it. 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 Acupuncturists
Hopefully, we have made a great case showing that acupuncturists need disability insurance. Do 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 For Acupuncturists
While every carrier is different, here are the important disability insurance policy basics for acupuncturists.
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. Acupuncturists are typically classified as a 2/2A or 3/3A depending on the carrier. Some carriers offer a higher classification. This brings us to an important point. It is important that you find a policy which meets your needs, not the carrier’s needs.
There is an elimination period (i.e. waiting period), which is like a deductible. It is the length of time – a waiting period – that elapses before disability benefits (i.e. money) begin. For example, a 90 day elimination period means your benefit period begins 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 depends on the carrier. Some allow to age 67 while others allow 5 years. A 5 year benefit period is still very good and likely all that you need.
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 an acupuncturist. 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 an acupuncturist. 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. It is a great 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), you’ll be denied benefits. So, under this definition, you won’t receive a disability benefit based on your education and experience as an acupuncturist 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 acupuncturists. 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 For Acupuncturists
You can add optional riders at an additional cost to your policy to best fit your needs and budget. Some popular rider options for Acupuncturists include:
Return of Premium Rider: This rider pays back all of your premiums should you never go on claim. If you do go on claim, the rider pays the net benefit (premiums less any benefits paid).
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 or cognitive impairment. This condition is 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), etc.
An Important Disability Insurance Rider For Acupuncturists
There is an important rider we feel many agents omit (based on our discussion with people who are unhappy with their current plan). It is the residual disability rider.
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%).
Why would you need this rider? Most disability insurance policies allow partial disability benefits upon total disability first. This means if you are only partially disabled (i.e. you can still work but not full-time), you will not receive any benefits until you have met the carrier’s requirements for total disability first. But, you are partially disabled, not totally disabled. Ugh!
Typically, this rider circumvents the total disability requirement and allow you to receive benefits immediately (after you satisfy the elimination period).
Here is a very easy example. You lose feeling in your wrists and fingers. The doctor says you need to rest and limits your work to 2 days per week. Because of the rider, the carrier pays you for 3 days missed. Without this rider – or a plan that has a partial benefit without a total disability requirement first – you would not receive any disability benefits because you are still working.
Protect Your Business If You Are A Business Owner
Are you a business owner or self-employed? Many acupuncturists are. 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 acupuncturists 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. Additionally, we only work with carriers that offer an occupation upgrade as well, which means lower premium cost, all things being equal.
The Best Disability Insurance For Acupuncturists
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.
Second, the “best” is only the best one that fits your needs, situation, and budget. We don’t try to fit a square peg in a round hole with such important insurance coverage.
However, there is one carrier that stands out to us. That carrier is Illinois Mutual. An A- rated carrier, Illinois Mutual operates in the middle-income market. More specifically, it offers a niche product designed for professions like acupuncturists. 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.
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. Monthly benefits are up to $7,500 per month.
And, what about premiums, you ask? Depending on your health and riders, the premiums could run anywhere from $1.00/day to $3.00/day. Think that is expensive? I bet you buy coffee almost everyday 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 of why acupuncturists 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 acupuncturists secure the right disability insurance for their specific situation, giving them and their families peace of mind.