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What would you say if someone asked you, “What is your most valuable asset?”

As an Optometrist, you may say it’s your house, your practice, investment portfolio or maybe even your car. But the reality is, your most valuable asset is your ability to earn an income. While you likely have insurance to protect your house or car, do you have adequate insurance to replace your income if the unexpected happens?

Whether you are new to practice or an experienced Optometrist having disability insurance is essential to protect the income you rely on. It is also an effective tool to protect the lifestyle you are building for you and your family.

To gain some clarity on the topic, here are the three most important things every Optometrist should know about disability insurance:

 

1. Disability insurance goes to work when you can’t

Disability insurance is a form of personal income replacement in the event that you are unable to practice Optometry due to an accident or illness.

If you have a mortgage, rent to pay, a student loan, or children relying on your income; disability insurance is specifically designed to help pay for your personal living and lifestyle expenses.

What about business related expenses if you own an Optometric practice? It is recommended that you have a form of disability insurance, known as Business Overhead Expense (BOE) coverage. A BOE policy will provide cashflow to your practice to keep the doors open and can cover expenses such as payroll, leases and daily business costs.

 

2. Know the signs of a good policy

To make sure it goes to work when you are unable to work, you need to recognize the three signs of a good policy.

First and foremost, a good policy will protect your specific occupation as an Optometrist. This is known as having “own occupation” disability coverage. You want the peace of mind of knowing that your policy will pay out if you cannot practice Optometry, but can still work doing something else. Be weary of policies that only pay out if you are totally disabled and not able to work anywhere at all.

Second, a good policy not only replaces your income, but makes sure your payout keeps pace with inflation, should you become disabled and make a claim. This is known as a cost-of-living adjustment (COLA) feature. You want to make sure you do not lose any purchasing power as the price of goods and services increase over the years due to inflation.

Finally, a good policy will have a “residual” feature that will still provide a partial payout in the event that you cannot go back to work full-time. Let’s say your pre-disability working hours were 40 hours per week and after your disability you can only work 50% of the time or 20 hours. With the residual feature, your policy will still pay out 50% of the benefit. You want to make sure your policy can bridge the earnings gap and make up the difference in income loss.

 

3. BCDO offers disability insurance and business overhead discounts

Are you concerned about paying too much for your disability insurance or BOE coverage? Would you like a second opinion on your current disability insurance and/or BOE plans?

BCDO has negotiated a special discount with RBC insurance for the benefit of their members.

BCDO has also asked Financial Literacy Counsel (FLC) to help Optometrists understand the discount and provide comprehensive financial planning services to all BCDO members.


Take advantage of your BCDO benefits by setting up a confidential appointment with a financial planner at Financial Literacy Counsel.

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In addition to helping you understand the special discount, FLC will also help you identify your disability insurance or BOE needs and help you understand how your coverage fits into your overall financial, tax, and estate planning.

Remember, disability insurance protects your most valuable asset, which is your ability to earn an income.  It should have key features to provide you with a greater sense of financial security and it should be part of a comprehensive financial plan that is reviewed yearly to reflect any changes to your finances and family.

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