Why Physician Groups Purchase Supplemental IDI Programs:
Physicians are extremely intelligent, caring, insightful, and thorough professionals. Understanding why Physician Groups are a top consumer of Supplemental IDI plans can provide valuable insight to Employers in other industries looking to offer a more competitive benefit program.
The healthcare industry includes a high proportion of highly compensated Physicians relative to the other employees in the practice or hospital. This is especially evident in the “specialty” physician groups. Group LTD plan maximums often provide inadequate protection, and only able to cover a portion of a Physicians income.
Many Physician Groups include “Partners” or Owner Physicians. A personal motivation to secure coverage exists. This is especially true since K-1 income is often not covered by Group LTD plans, which typically covers “base salary or draw” only. IDI plans often cover K-1 income/Total Compensation.
Often, the organization’s structure (Private Practice or Healthcare System) easily allows for Physician and Executive carve-outs – the most common type of Supplemental IDI offering.
Physicians have exposure, experience with, and knowledge of disability insurance, at a young age. For a Medical School to be “accredited”, the school must provide disability insurance to medical students. Most schools either pay the premium or make coverage mandatory and include the premium as a “line-item” in the tuition. Upon matriculation, it is a common practice on “matriculation day” for the Medical Faculty/Dean to encourage medical students to port the disability coverage, since:
Coverage is portable.
Coverage is deeply discounted compared to street rates.
Coverage was secured at a young age, and very affordable.
Coverage was secured on a Guarantee Issue basis.
Matriculating Students generally have significant debt from medical school; therefore, the disability insurance helps protect against default.
Recognition that, when eventually employed as a Physician, an Employer’s Group LTD plan will not provide enough protection alone.
The contractual features of Supplemental IDI are especially attractive to Physicians:
Portability: Physicians see value in having potable coverage that they own. Many Physicians have a base level of coverage which was ported from Medical School or Residency
Specialty Own Occupation Protection appeals to Physicians with specialties and subspecialties.
No loss of income is required for Total Disabilities. This is beneficial to Physicians who have “trailing income” often for several months due to billing/accounts receivable, and/or have K-1 income as owners.
No offsets at time of claim. IDI will not offset at time of claim, from other benefits such as SSDI.
Full Duration Mental/Nervous Protection is available and most often purchased in the Physician segment. Psychological and Substance Abuse claims are the #1 cause of claims in the Physician segment.
The cost of coverage is very affordable, relative to the volume of protection.
Last, coverage can be secured on a Guarantee Standard Issue basis.
Navis Benefits Group, LLC, specializes in Supplemental Disability Insurance (IDI) programs, with extensive expertise designing programs for Private Physician Groups and Large Healthcare Organizations. Navis Benefits Group, LLC, partners to provide specialty benefits to employer groups looking to offer cutting-edge benefits.
