As a full-time surgeon, your hands are one of your most significant assets. Without the use of your hands, you simply cannot do your job.
So what would you do if you suffered damage to one or both of those appendages?
From common conditions, like nerve damage and arthritis, to more severe situations, such as losing a finger, your entire career as a surgeon would be at risk if you no longer had full function of your hands.
And this is why so many surgeons consider getting hand insurance.
What exactly is hand insurance?
How much does it cost?
Is it something a surgeon should have?
Today we’re answering the question that so many physicians want to know:
Do surgeons need hand insurance?
Body Part Insurance Is Real
Body part insurance on a specific body part is a very real offering that anyone, in any profession, can buy. While it is common for celebrities to insure their famous body parts, it is relatively uncommon for healthcare professionals to do so.
Reportedly, David Beckham, Tina Turner, and Heidi Klum have insured their legs. Bruce Springsteen and Mariah Carey have reportedly insured their vocal cords. Kim Kardashian and Jennifer Lopez have insured their famous derrieres.
But body part insurance, including hand insurance, is pretty hard to come by. It’s a niche market, tapped mostly by celebrities, and it’s not something that most insurers even offer.
And there’s a reason for that:
It’s simply not worth the money.
Is Hand Insurance Worth It?
Hand insurance covers your hands only.
It does not cover any other part of the body — not the wrists, the arms, or the shoulders, all of which are essential components of performing surgery.
With a damaged wrist, you may not have full command over your hands. With a broken shoulder, you may not be able to move your arm (or the hand attached to it). But hand insurance covers none of those injuries, rendering it mostly useless for physicians.
Like all health-related insurance policies, the monthly premium for hand insurance varies based upon your age, your occupation, your health status, and the amount of coverage you want. But it’s much too specific a policy to justify any cost at all.
For this reason (and others), even body part insurers and brokers recommend that you take a full-body policy over a part-specific policy.
There’s another caveat to having hand insurance: body part insurance policies usually pay a benefit of a flat, fixed amount. So even if you wanted to insure your hands for $2 million, that’s the most you would ever be able to collect.
This is why that’s problematic:
Let’s say you’re a neurosurgeon or a cardiovascular surgeon in your forties with twenty more years to work. At an average salary of $600k per year, two million dollars will only cover lost income for about 3.5 years. And with permanent hand damage, that will leave you with 16.5 years of lost income. In that scenario, you would most likely need to find employment in some other line of work.
You Don’t Need Hand Insurance: What You Need is Disability Insurance
Disability insurance is a better option than hand insurance for one simple reason:
Physicians in all medical specialties should have disability income insurance as a way to protect their future income. If you become ill or suffer an injury that prevents you from working, disability insurance will pay out monthly benefits to cover a portion (typically about 50-60%) of your lost income.
It’s a way to ensure that you’ll be able to pay your mortgage, pay for your utilities and other monthly expenses, stay on track with saving for retirement, and continue to provide for your family.
There are short term policies that offer benefits for a limited period of time and long-term disability policies that can pay benefits for twenty years, thirty years, or until you reach retirement age.
For the best possible protection, a long term policy is always the better choice.
Unlike hand insurance, disability insurance will pay benefits every single month for the entire duration of your benefit period.
How Much Does Disability Insurance Cost?
Your monthly insurance premiums’ cost will vary depending upon the amount of coverage you need, your age, your occupation, your location, and the specific terms of your policy.
Your premiums will be higher if you include optional riders, select a shorter waiting period, or choose a longer benefit period.
Most physicians should expect to spend between 2% and 5% of their gross income on disability insurance premiums. For example, suppose you’re seeking $10,000 per month in coverage benefits. In that case, your monthly premium will likely fall between $200 and $500 per month, depending on your specific policy and how many riders you add.
True Own-Occupation Disability Insurance
Every insurance company offers the option to add riders to a disability insurance policy. Some riders provide you with additional disability benefits, while others offer the flexibility to make changes and increase your coverage.
The most crucial disability insurance rider you can add is the one called True Own-Occupation.
Here’s what that means:
Every disability insurance policy has what’s called a “definition of total disability.” And this definition is what makes you eligible or ineligible to collect benefits when you become sick, injured, or disabled.
The standard default definition of most insurance companies is that of Any Occupation. With this definition, your injury needs to be so severe that you cannot work in any job at all. It takes extreme circumstances to meet this definition. And if you don’t meet the definition — you can’t collect.
The Any Occupation definition is too restrictive and hard to meet.
Physicians should be aware of this and always select the definition of True Own-Occupation instead.
And for a surgeon with hand damage, this is precisely the type of coverage that you need.
If you were to have hand insurance only, you would only be able to collect benefits if you injured one or both of your hands.
But with a True Own-Occupation definition in your disability insurance policy, you can collect benefits if you damage your hands or suffer from anything else that restricts you from performing surgery. For example, back pain that prevents you from standing in the OR.
Be aware of these Hidden “Own-Occupation” Traps in Physician Disability Insurance.
How Much Does True Own-Occupation Coverage Cost?
Adding the True Own-Occupation rider to your insurance policy will increase your monthly insurance premium, but it is worth every penny.
In fact, the only downside of having the True Own-Occupation definition is that it’s more expensive. And the benefits of having it far outweigh the slight upcharge you’ll have to pay.
Having the standard Any Occupation definition will result in lower monthly premiums. But if you cannot meet the definition or collect on your benefits, you’ll wish you paid a little more to upgrade to the True Own-Occupation definition.
Without True Own-Occupation Disability Insurance, You Are At Risk
There are a variety of injuries and illnesses that could prevent you from performing surgical procedures. Nerve damage. Arthritis. Hand tremors. Blindness. The list is endless.
With True Own-Occupation disability insurance, you can protect your income regardless of where the injury is.
There is another perk to having the True Own-Occupation definition:
You can work another job and continue to collect your monthly benefits.
For example, a surgeon with hand tremors or nerve damage in the hand may not be able to perform surgery. Still, they could teach, conduct research, consult, or work as expert witnesses for trial attorneys.
Under the standard Any Occupation definition, you’ll stop collecting benefits as soon as you start working another job. But with True Own-Occupation coverage, you can work elsewhere and still collect on the income you’re no longer earning from surgery.
If you don’t have True Own-Occupation coverage, you could be forced to work a job at a much lower pay rate simply to have some amount of income coming in. This could put your entire lifestyle in jeopardy and prevent you from fulfilling your financial obligations, including paying back medical school debt or saving and investing for retirement.
The bottom line is this:
Any Occupation disability insurance is nearly as useless as hand insurance itself. A comprehensive disability policy with the True Own-Occupation is the only option that you should even consider. It’s the single best way to protect your finances and future income potential.
Here’s everything you need to know about How to File a Disability Insurance Claim for Physicians.
Who Are the Best Insurance Providers for Disability Insurance?
There are countless providers and disability insurance plans available across the country. But there are six top providers, all of whom have excellent ratings, and all offer the True Own Occupation definition of disability for physicians.
We recommend surgeons and all other physicians seek long term policies from the following insurance companies:
Click on the links above to read our full and comprehensive review of each provider and the different types of disability insurance they offer.
When Should You Get Disability Insurance?
Everyone understands the importance of having life insurance, health insurance, auto insurance, and liability insurance for their business. But many people do not realize that a disability insurance policy is equally as important.
Disability insurance is the best way to protect your future income, ensure that your family is provided for, and make sure that your financial obligations are being met.
There is no limit on how you can spend disability insurance benefits. You can use them to pay for your monthly bills, finance a child’s education, pay off medical bills, or take a trip around the world. Like regular income that you would earn through work, you can spend disability insurance benefits in any way you see fit.
The best time to get disability insurance is when you’re in your last year of medical school or early on in your residency. If not during those periods, then as soon as feasibly possible.
The farther on down the road you get, disability insurance policies require more underwriting as well as a medical exam and health screening. The younger and healthier you are, the lower your rates will be. While you are in training, they offer more accelerated and abbreviated health screening processes so it’s even easier to get protected.
As a young physician or resident, you have more years to work and more money to earn over your lifetime than older physicians. And the younger you are, the more future income you have to lose.
A disability, illness, or severe injury can happen at any time. Protect yourself early on in your career, so you never have to worry about losing your income altogether.
Besides the True Own-Occupation rider, young physicians that still owe student loan debt should also add the Student Loan Repayment Rider. This rider will pay your student loans in addition to your monthly benefit, making it a must-have for young physicians still carrying debt.
Learn more ways to reduce your debt load faster by reading our article: 10 Options for Paying Off Med School Debt.
For a surgeon whose hands are their most important tool in the operating room, hand insurance may sound like a good idea. But there are far better ways to protect yourself than with such a limited body part-specific insurance policy.
Leave the body part insurance for the celebrities and athletes. As a physician, disability insurance provides much more comprehensive coverage and protection. It’s a much better investment in your future than hand insurance could ever be.
To receive quotes or learn more about disability insurance, contact Physicians Thrive now.
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