by Kelly Reed

Three Insurance Tips From a Retiring Physician


Last Friday, I received a call from a physician letting me know that he had decided he was going to officially retire.   We worked through a few business items like “how to apply for his free tail” and what was next for him.  The conversation gravitated toward the challenges that physicians face coming out of school today as his son is currently in medical school.  I asked: What advice do you wish you had when you began your practice (specific to insurance)?  He said three specific things that jumped out to him:

  1. Buy as much life and disability insurance as you can when you are young – it turns out he had actually lost a friend early in his career to cancer.
  2. Pay the extra money to get a medical malpractice company that you trust.  He said, “I was only sued once early in my career, but when I received the letter in the mail it made me sick.”
  3. Pay yourself first (in a sense).  He said to take care of your personal household’s insurance.  He and his wife were actually sued once personally for an injury on their property.  Ironically this took more time, effort, and energy than his medical malpractice lawsuit.

I thought these tips were worth sharing because they came from a physician who has experienced them first hand.  I will expand on each below, but believe these items can apply to any professional.

  1. Life Insurance – Term insurance is inexpensive.  Buy it young and your family can be protected long-term.  According to a 2012 study by SwissRe, ages 35-44 are the highest uninsured group today.  This age demographic comprises many young professionals.  Permanent life insurance is another option and it offers more flexibility and can provide an additional bucket to pull from upon retirement.
  2. Medical Professional Liability– prices of these policies have come down over the past 10 years and therefore coverage in many areas is more affordable than ever before.  All insurance companies are not created equal.  Ask the following:
    • What is your financial strength and can you guarantee you will be here for me 5, 10, or 20 years from now?  This is critical for physicians near retirement.
    • Explain claims made vs. occurrence (or pre-paid tail) – Why pay more than you have to?
    • What is your track record in defending cases in my city, county, state, and nationally? Show me the numbers.
    • Be armed with the information that will allow you to sleep at night.  If you do receive a notice of intent, know you are in the right hands because you have done the research on the front end. You are “knowing vs. guessing.”
  3. Personal Insurance – “Pay yourself first.”   Take the same pride in managing your personal insurance risk that you do in your business.    Personal liability coverage is one of the best buys in this marketplace.  I recently saw a $5,000,000 Umbrella policy quoted for $400 a year.   Protect your future earnings and make sure you have the proper coverage.

If you take a proactive approach to managing your Life Insurance, Disability Insurance, Medical Professional Liability Coverage, and Personal Insurance you can set yourself on the right path.   To schedule a Risk Assessment meeting with Kelly Reed and his team, please email him at kellyr@vastsolution.com or call 906.315.7227.

National healthcare open enrollment starts November 1st and ends on December 15th. To make an appointment with one of our trusted advisors please contact us at 906.228.7500.

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