Disability Insurance for Attorneys
You don’t become an attorney overnight. Finishing law school and passing the bar takes time – and establishing a successful career takes even longer. Unfortunately, a disability can threaten your legal career almost instantly. This is why disability insurance for attorneys is so critical.
You might think that a disability wouldn’t be a big hinderance to an attorney. After all, you can practice law in a wheelchair.
However, there are many different types of disability – some of them can absolutely interfere with an attorney’s ability to work normally.
For example, imagine you’ve just been diagnosed with cancer. You’ll need to undergo chemotherapy treatments. Each session takes several hours, and going right back to work isn’t an option: you’ll be exhausted and nauseous. Plus, your work requires a mental sharpness you just won’t have. You’ll also want to spend more time with your family.
Or imagine you’re a defense lawyer and you experience a stroke. Your speech is severely impacted. You’re in speech therapy and the doctors are optimistic you’ll make a full recovery. It will take time, though, and there’s simply no way you can practice law right now.
It’s not just illnesses that can keep attorneys from working. Serious injuries – such as from a skiing accident, a bicycle crash, or even slipping in the shower – sometimes require surgery. You might be unable to work while you’re recovering and on heavy-duty pain killers that leave you in a mental haze.
Many illnesses and injuries can prevent attorneys from working. A disability insurance policy can replace some of the lost income.
Long-Term Disability Insurance
- Short-term disability insurance can replace income for a limited period of time; for example, up to six months or a year. Employers sometimes offer this coverage. For extended periods of disability, you need long-term disability income insurance.
- Some people have group long-term disability insurance through their employer. However, this coverage may not fit the needs of many attorneys. For one thing, you can’t typically customize the coverage. For another, the monthly benefit amount may not replace enough of the your income.
- You usually pay group premiums with pre-tax dollars, which means your disability benefits are taxed. These policies can also be subject to monthly benefit caps that hurt high-income earners like attorneys.
If you depend on group long-term disability benefits alone, you might end up taking a massive pay cut that could cause financial hardship and require a major adjustment in your standard of living.
An individual disability insurance policy provides an appealing alternative. If you don’t have access to group long-term disability insurance through work – either because your employer doesn’t offer it or because you’re self-employed at your own practice – you can buy individual disability insurance. If you have access to long-term disability insurance through your work, you can buy individual disability insurance to supplement your group coverage and secure a more robust income replacement.
Choosing a Disability Insurance Company
When you purchase individual disability insurance, you have several top-rated disability insurance companies to choose from.
Depending on your personal situation, you might find better rates and coverage with one insurance company than another. You can request quotes from multiple insurance companies to make sure you’re gaining the best deal.
Comparing Disability Insurance Policies
Disability insurance usually costs around 1% to 3% of your income. However, when comparing disability insurance policies, you need to consider more than just the monthly premium. Coverage term differences can have a huge impact on the disability benefits you receive – the terms can even impact whether you’re eligible for any benefits at all.
Consider the following:
- Disability Definition: Attorneys understand the importance of clear definitions. This is definitely true when it comes to the definition of disability in disability insurance. If you pick a policy with an own-occupation definition, you’ll be able to claim benefits if a disabling injury or illness renders you unable to perform the duties of your normal job. If you pick a policy with an any-occupation definition, you can only claim benefits if a disability means you’re unable to do any job you’re reasonably suited for. This can be an important distinction. For example, you might have a disability that causes brain fog, meaning you’re unable to perform the mentally-taxing work required of an attorney, but you could possibly handle work in another industry – most likely at a substantial pay cut.
- The Elimination Period, Benefit Period and Benefit Amount: Disability insurance replaces a portion of your lost income if you experience an eligible disability that prevents you from working. However, the percentage of income it replaces can vary between policies. The elimination period and benefit period lengths also vary – and both these factors can have a big impact on how much you receive. The elimination period is also called the waiting period: it’s how long you have to wait after experiencing a disability before you can start collecting benefits for your disability claim. A shorter elimination period means you can collect sooner, but this can also push the premium cost higher. The benefit period is the amount of time you can continue to receive benefits, provided you still meet the policy’s definition of disability. There’s a large amount of range here: some polices stop paying disability insurance benefits after two years, whereas others provide disability benefits until the policyholder reaches retirement age.
- Other Terms and Riders: You can also customize your policy by selecting other terms that meet your needs. For example, the renewal provision can be either guaranteed renewable or non-cancellable and guaranteed renewable. In either case, the insurance company can’t cancel your policy as long as you pay the premiums. With a non-cancellable policy, the insurance company can’t raise rates, either. Most disability insurance companies also offer various riders that provide other benefits, such as retirement protection or cost-of-living adjustments.
Other Disability Insurance Options
Depending on your situation, some other disability insurance options may be appropriate.
For example, if you have a pre-existing health condition or practice a high-risk hobby, you might find it harder to secure affordable coverage. In this case, you should consider applying for simplified issue disability insurance. This is a good option for people who would like to avoid the disability insurance underwriting process.
If you need to secure disability insurance for a group of five or more employees, you should consider guaranteed standard issue insurance. This option requires minimal underwriting. Additionally, a multi-life disability insurance discount can make coverage more affordable.
Are You an Attorney?
If you’re an attorney, securing disability insurance is an important way to ensure a financially-secure future. Going without coverage is a huge risk. Find an agent.
Are You an Insurance Agent?
If you’re an insurance agent, you can help attorneys secure the disability insurance coverage they need by educating them on their options and by providing them with quotes from top insurance carriers. Request a quote.
