September is Life Insurance Awareness Month and physicians benefit from life insurance the same way most people do - by protecting their loved ones when the unexpected happens. Even young and healthy physicians aren’t invincible, so if your family relies on your income, it’s critical to have enough life insurance to provide for them after you pass away.
Realizing the role life insurance can play in your family’s finances is an important first step. A critical second step is determining how much life insurance you may need, and how you can use the different types of insurance available to you.
Here are a few common scenarios where life insurance may be appropriate for a physician:
Physicians looking to lock in low rates. When it comes to life insurance, it’s best to lock in pricing when you’re young and healthy. Most life insurance plans require some form of a physical or check-up. In general, the healthier you are during that process, the less you’ll pay per month in premiums on your policy.
Parents with minor children. Whether you’re expecting your first child or you’re getting ready for an empty nest, it takes a lot of money to raise kids. A life insurance policy can help make sure your children are covered financially if you die. Depending on the policy, the payout could help cover things like college tuition, medical expenses, and day-to-day living costs.
Physicians who own a business. If you own your practice, you’ll need a plan for the future of your company, and it’s important to decide in advance who will be the successor. As a means of funding for most types of buy-sell arrangements, your successor (your spouse, child, partner, etc.) could be the owner and beneficiary of a life insurance policy on your life. This policy owner (successor) can then use the death-benefit proceeds to purchase your interest in the business when you pass. If your children are your successors, they can use the life insurance proceeds to purchase your interest from your estate or spouse and continue to run the business in your absence. Alternatively, if you plan for a business partner to run the company, your business partner can use the life insurance proceeds to purchase your share from your estate or spouse. This structure means your estate or spouse can receive cash from the sale—and helps ensure that your business will survive.
Adults who own property together. A life insurance policy should be at the top of your to-do list if you own a home with someone else and that home has a mortgage. In the unfortunate event one of you should pass away, the death benefit can help the other person pay off the mortgage, pay for upkeep, even prepare it for sale. Insurance can also be helpful if you co-own a business as well.
No matter where you are in your career as a physician, life insurance can help you plan ahead for the people you care about most. Take some time this Life Insurance Awareness Month to learn about the types of life insurance available to you. Get an instant quote on our site or send us a message for a review of your existing policies and insurance needs.