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To successfully protect yourself from unforeseen circumstances, insurance – malpractice, life, disability, and umbrella – is vital.
Leaving residency and starting your radiology career is stressful enough. Add in the need to protect yourself from unexpected or hidden perils, and the angst factor only rises.
In a session during the American Roentgen Ray Society (ARRS) 2021 Virtual Annual meeting, Sherwin Chan, M.D., Ph.D., associate professor and vice chair of radiology research at Children’s Mercy Hospital in Kansas City, discussed the types of insurance residents and attending providers should consider to best protect their financial stability.
For more ARRS 2021 Virtual Annual Meeting conference coverage, click here.
“We really get insurance for black swan events. We get insurance because if this certain low-probability thing happens to us, it would be catastrophic and would really mess up our financial lives,” he said. “But, how do you decide what you want to insure? It comes down to a risk-versus-cost ratio.”
Overall, he said, you need to concentrate on four types of insurance: malpractice, life, disability, and umbrella.
Mistakes do happen, so carrying malpractice insurance is a must, Chan said. Both current malpractice and claims-made malpractice insurance offer you protection, but they differ based upon your time of employment.
Current malpractice insurance will cover you if a claim is brought against you for an error made during the time you worked at a facility even if you no longer work there. Claims-made malpractice policies will not cover you if you are no longer employed at the institution – if a suit is filed after you leave, you bear responsibility alone.
If your employer only provides a claims-made policy, be sure it also includes tail coverage. This addition provides protection once your policy expires when you change jobs. During the hiring process, discuss whether your employer will pay for the tail coverage, Chan advised, because these policies can cost thousands of dollars.
The big choice with life insurance is whether to opt for term or whole-life coverage, Chan said. Term life is less expensive than whole life because it is based on the period of time covered, as well as the product you choose. In fact, he said, some whole-life policies can cost as much as 10 times what you would pay for a 30-year term policy.
You can purchase several term policies of different lengths – a ladder strategy – to increase your amount of coverage or you can pay a certain amount for a whole-life policy that will be followed by periodic premium payments. When deciding the amount you should carry for life insurance, he said, you should conservatively estimate you will need 30 times your annual expenses to comfortably make it through retirement.
Once you reach this goal, he said, the concept of life insurance becomes less important.
“As your savings pass what you need for your life, you actually don’t need life insurance anymore,” he said. “You really only need life insurance in these first periods of your working career when you don’t have enough savings to cover anything catastrophic happening.”
If you elect to carry life insurance on your spouse or partner, he recommended between $500,000 to $1 million in coverage.
Chan also advised that you research a life insurance company well prior to purchasing a policy. If they go out of business, any payout you could have had is lost. The blog White Coat Investor can help you determine how well capitalized a company is, as well as what their credit ratings are.
It’s not something you want to think about, but there could come a time when you are no longer able perform your duties as a radiologist due to injury or illness. For these cases, disability insurance will be critical.
Be sure you look for occupation insurance -- the type of disability insurance can be specified to your profession rather than offering coverage based on the inability to perform any job. This can be particularly important for providers who are both interventional radiologists and diagnostic radiologists. You want a policy that will cover both aspects of your job.
Be sure to purchase a hefty policy that will cover you well into retirement and account for any expenses associated with a potential disability, he advised. It would also be a good idea to include policy riders that will also provide for situations of partial disability.
In addition, he said, residents should consider future purchase option riders that allow for policy increases over time.
These over-arching policies can be particularly valuable as they offer blanket coverage for your assets, such as your car and home, he said.
“As doctors, sometimes it feels like we have a target on our heads, and people are always gunning for us,” he said. “This umbrella insurance helps protect you against that. It is really useful because they are big, and they protect you for millions of dollars.”
The benefit of these policies, he said, is that you would only be liable for damages over a significantly high amount, and the insurance company is also extensively invested in any suit that involves you. Consequently, they will their resources to your case.