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.
