Risk Management Considerations for Physicians
As a physician, your day is likely packed with various demands—from treating patients to managing your professional development, all while taking care of business administration needs and staying current with the latest medical advancements. Thinking through your own asset and wealth management probably falls to the bottom of the list.
Yet, safeguarding your personal wealth is a vital step toward preserving it, and even more important, providing you peace of mind. Having a robust risk management plan in place can help you focus on your career, knowing you’re protected for the unexpected bumps that may come on your road to financial success.
For physicians, having a variety of risk management strategies in place provides the greatest amount of assurance for all the curveballs the future may hold. A comprehensive risk management plan includes life, disability, professional liability and personal umbrella insurance, and is the ultimate preventive care for the wealth and life you’ve worked hard to build. Here’s an overview of each insurance type, along with how they can insulate you from life’s ups and downs.
Life Insurance Basics
Life insurance is an important part of any risk management plan, because it provides reassurance that your family and loved ones will be protected and cared for should you die unexpectedly. No matter where you are in your career, life insurance is a key component for transferring wealth and ensuring a secure future for all family members.
Life insurance needs are determined by considering your family situation (married or single, number of children), career stage, and current lifestyle and goals. A life insurance policy can help ensure that your children receive the type of education you wish for them, and that your spouse will not have to change his or her career or lifestyle.
If your needs are greater than your goals, securing new life insurance or updating your current policy can ensure your family’s needs would be met even if you’re not there with them.
Disability Insurance Basics
Disability insurance offers another layer of protection for financial and personal stability within your risk management strategy and is essential no matter your age or career stage. Knowing that you and your family will still have a reliable income should you become unable to work provides an important level of comfort and stability. An evaluation of your need for disability insurance should focus on reviewing your current preparedness and possible future needs.
Professional Liability Insurance Basics
Professional liability insurance is essential for protecting yourself as a physician, and shielding your wealth and your family from claims. A single malpractice claim, even if it is meritless, could devastate your financial security due to the cost of defense. Professional liability insurance is a cost-effective resource to include in your risk management plan so you won’t need to worry about any potential impact from a liability case.
Professional liability insurance is essential for achieving comfort and confidence that your medical decisions are protected, and that your personal and professional assets cannot be harmed by frivolous lawsuits. A policy with comfortable limits ensures you can maintain a stable wealth outlook now and in the future. Your risk management plan is not complete without professional liability insurance.
Personal Umbrella Insurance Basics
Your homeowner’s and automobile insurance policies provide important protections against loss from accidents, theft and damages, but these policies have liability limitations that mean you and your family could be left unprotected. An umbrella policy protects you, your family and your wealth from lawsuits involving personal injury or property damage after your existing policies have been tapped out. For example, if you are involved in a car accident and the other person’s bodily injury claim is $1.3 million but your automobile insurance policy only provides coverage for $300,000, you could potentially face $1 million in liability with no coverage. An umbrella policy steps in and covers the claim so that you are protected. For complete risk management protection, you need a personal umbrella policy with coverage for up to $1 million or more.
Choosing a personal umbrella policy as part of your risk management plan ensures that your family and your carefully curated wealth will not be impacted by liability for injury or damage. Knowing you have an umbrella policy in place provides a significant shield for your assets and your future.
Planning for the Future
The risk management plan you develop provides protection based on your current and projected situation. Things change though, so the financial experts at Key Private Bank encourage physicians to regularly review their plans based on their personal and professional lives, and goals, to ensure they have the complete protection and security they need.
After all, what you need today may not be what you need in a few years. Retirement, divorce, opening or closing your own practice, the addition of children or grandchildren, as well as adjustments in your goals, are all possibilities that can impact your strategy. Regular checkups will keep your risk management plan healthy and robust so that you can continue to feel secure and confident your wealth is carefully protected.