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Physician’s Planning Resources

Physician’s Planning

Do you need a Financial Second Opinion? Even if you received the best medical education in the world, chances are your training did not provide you with the tools necessary to address the business realities of the practice of medicine or your financial well-being. The results of poor planning not only affect the doctor’s family but also their professional relationships with colleagues, partners, and hospitals. Our goal is to bring a complete package of financial planning, insurance and investment products and services to members of the medical profession. We know how busy you are. We know you need reliable answers from a confident advisor. Through access to a network of experienced professionals in all areas of financial services, we can help make recommendations that are appropriate for your needs together with quality products from a range of independent companies to help you achieve your financial goals. We provide a wide array of financial services to physicians. We understand how a physician’s career choice impacts wealth accumulation, student loan debts, asset protection, insurance needs, and investment choices. Because of this understanding, we can provide advice for every stage of a physician’s career, from residency to retirement, in all matters impacting their financial health.

Services We Offer

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Comprehensive Financial Planning

Life Insurance Needs (Individual/Family)

Investment Planning Strategies

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Retirement Planning Strategies

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Income Protection Strategies

Group Insurance Products

Disability Insurance

Insure your greatest asset. You buy a $30,000 car and purchase automobile insurance. You buy a $300,000 house, and purchase homeowner’s insurance. How much income will make over your lifetime? Do you insure it? Unfortunately, most physicians don’t. However, disability insurance may be the most important financial product that you purchase. Although people are most likely to need disability insurance than any other type of insurance coverage, many are less likely to purchase a disability policy than other less frequently utilized policies. A physician’s ability to earn could be his or her greatest asset. Disability insurance protects that asset. Following are some common questions about this kind of insurance. “Do I need Disability Insurance?” “Doesn’t Social Security cover me?” Yes, under very specific circumstances, but the Social Security Administration’s definition of disability is extremely narrow. If you do happen to qualify, you will more likely than not receive an adequate amount of income from your Social Security Disability to maintain your lifestyle and meet your financial needs. “I don’t need to buy it. My employer provides it.” That’s a good start, but it may not be adequate protection, and it depends on the definitions and features in the group policy. Purchasing an individual policy with appropriate features can provide you with protection for the longest period of time. “I’m young and healthy. Can’t I just wait until I’m earning more and then purchase it?” Yes, you could. Policies change continuously. Typically, they become more restrictive each year. But as a physician, you’re probably more aware than most people that individuals don’t anticipate illness, injury or accidents. They can happen at any time regardless of your age. Buy coverage now and feel confident knowing that if anything should happen to you, your income is protected.

Choosing a Disability Insurance Policy

Because choosing the right insurance is a difficult task, we help physicians choose disability coverage by carefully evaluating their goals and current coverage. Every disability insurance contract is different and should be carefully evaluated by a professional advisor. The worst thing you could do is purchase a policy that does not pay when you make a claim. When shopping for a policy, physicians should look for products that offer the following benefits:

Occupation Specific

For a physician, this is the most important feature of disability coverage. An occupation-specific policy pays a benefit if the insured becomes disabled and cannot work in the specific occupation at the time of disability. An occupation-specific contract is more expensive than the alternative (“any-occupation” coverage), but the extra cost may be worth every dollar spent.

Residual Benefit

A policy that offers a residual benefit pays benefits after a partial loss of income. The residual benefit is calculated differently for each contract, and the time period for each residual benefit carries from contract to contract as well.

Graded Lifetime Benefit

Many policies will pay a benefit to the insured up to a certain age, usually 65. Since individuals are living much longer than 65, a policy that pays a graded lifetime benefit guarantees that the insured would receive some level of benefits until his or her death. If the insured lives to 85 without a graded lifetime benefit, he/she would receive no benefit for twenty years. That’s a significant loss of income. A lifetime benefit gives greater protection.

Cost of Living Adjustment

Should a policyholder qualify for and collect policy benefits, a cost of living adjustment feature increases the benefit amount annually to keep pace with inflation. In ten or fifteen years, a benefit amount that seems adequate now would amount to very little if not adjusted regularly.

Non-cancellable, Guaranteed Renewable

A guaranteed renewable policy cannot be canceled as long as you pay the premiums on time. Regardless of how your health changes, such a policy will continue to afford you protection. When a policy is also non-cancellable, an insurance company cannot change any policy provisions, and it cannot increase the premiums.

Guaranteed Insurability/Future Increase Option

This feature allows physicians to increase the amount of their coverage without requiring additional medical underwriting (although in most cases financial underwriting is required). This feature is well worth the expense because it allows the insured to add to his/her coverage limits as they move through stages of life and goals change. As a young, single physician, purchasing a less expensive policy that includes this feature makes tremendous sense. When he/she’s at the beginning of his/her career, he/she may not have as much money to put toward insurance premiums and probably doesn’t have dependents yet. As he/she begins to gain income and grow a family, the guaranteed insurability allows him/her to add coverage even if he/she becomes ill later.

Assistance with Employment Contracts

When physicians receive the first draft of a proposed contract, they should review it with a qualified attorney who will likely check on the terms below to make sure they complement their situations and goals:

Start Date of Contract

You would likely want a contract start date that is two weeks beyond the date that you anticipate being ready to start. This strategy will give you a cushion to ensure that the employer receives all licensing paperwork on time. The extra time also allows residents to take a short break before embarking on their careers. Every resident can benefit from the extra time to relax and rejuvenate before beginning his or her career.

Term of Contract

Most contracts cover one or two years. Most physicians will want to negotiate for a two-year term. This allows them to lock into the terms of the contract if medicine or the group changes. Consider linking the income of the contract to the road to partnership.

Physician's Duties

Physicians should not be surprised on the job. Every duty and responsibility that is expected should be stated in this section of the contract. This section may also indicate which duties are specifically excluded. Call coverage, hiring and firing responsibilities, administrative duties and other types of duties may be included in this section.

Confidentiality/Trade Secrets

Physicians should not discuss the terms of their contract with any other party besides their tea of professional advisors. Discussing the terms of your contract can lead to termination. A physician’s salary, bonus, and duties should be considered confidential information and guarded as such.

Non-compete/Restrictive Covenant

A non-compete clause or restrictive covenant is a section of the employment contract that prohibits a physician from practicing in certain areas for a certain period of time after a termination. Clearly, such a clause is not in the physician’s best interest. Most employers will attempt to include such a clause, so you may want to negotiate for a clause that is the least restrictive. Study the non-compete or restrictive covenant carefully as it could limit where you will be permitted to practice in the future. Physicians should angle for clauses that limit the restriction to ONE primary office within a five-mile radius in very specific language.

Other Topics to Consider

  • Salary Structure Benefits
  • Tail Coverage
  • Partnership Buy-in/Buy-Out Provisions
  • Moonlighting

Contract Negotiation Steps

Negotiating an employment contract requires a plan. Always enlist the assistance of a professional advisor before beginning contract negotiations. The following steps can help physicians initiate a successful contract negotiation plan: Develop a strategy. Review the proposed contract draft. Do not comment to the employer about the proposed contract. Review the employment agreement with your contract review professional. Formulate an email response to the proposed contract draft. Meet with the employer in person. Email positive or negative responses to the employer’s proposed contract. Continue the review and negotiation process. Finalize the contract. Give a copy to your advisor for safekeeping or discuss the possibility of an on-line vaulting system. Your financial advisor can make recommendations for you and even set it up for you.

Student Loan Management

Physicians often top the list of highest paid occupation, but they incur enormous amounts of debts on the way there. In 2010, the average medical student had student debt exceeding $200,000 according to an article by USNews.com. However, the physician’s student loan debt can be managed to improve payment options and lower interest rates. We help physicians to develop comprehensive financial plans to assist them in managing their student debt. In many cases, physicians can take steps to reduce their total amount to pay off amounts by thousands of dollars over the life of the loans.

Managing Your Loans

Deferment

Student Loan deferment is a tool that physicians can use to assist with cash flow, debt management, and financial planning. Physicians may request deferment during a time of economic hardship or when enrolled in an approved graduate fellowship program. During deferment, no interest accrues.

Consolidation

One of the most effective student debt management tools is consolidation. Physicians who consolidate benefit from lower monthly payments and lower interest rates. They also benefit from having only one payment each month. Consolidation can be a powerful debt management tool. A financial advisor who specializes in physicians’ needs can help determine if and when consolidation makes sense for a physician. If you need help evaluating the decision to consolidate your student loans, contact us for a Student Loan Management consultation. During the consultation we will consider the impact of consolidation on the following terms of your loans:

  • Interest rate
  • Repayment Schedule/Monthly Payment
  • Total Repayment Amount
  • Hidden Fees/Charges
  • Grace, Deferment, Forbearance
  • Interest Subsidy
  • Early Payment Penalty
  • Repayment Incentives
  • Cancellation
  • Servicer
  • Processing Time
  • Interest rate
  • Repayment Schedule/Monthly Payment
  • Total Repayment Amount
  • Hidden Fees/Charges
  • Grace, Deferment, Forbearance
  • Interest Subsidy
  • Early Payment Penalty
  • Repayment Incentives
  • Cancellation
  • Servicer
  • Processing Time
Interest Rate

Repayment Schedule/
Monthly Payment

Total Repayment Amount
Hidden Fees/Charges

Grace, Deferment,
Forbearance

Interest Subsidy
Early Payment Penalty
Repayment Incentives
Servicer
Processing Time
Cancellation

Let us help you create a comprehensive financial plan that incorporates the management of student debt in a way that works with your goals. Contact us today for a consultation and we’ll show you which options can work with your goals.

Asset Protection Strategies

The unfortunate reality for physicians is that at some point in their careers they will likely become the target of a lawsuit. Many physicians understand it’s not a matter of “if” but “when”. We understand that our clients are at risk for judgments not only from malpractice cases but from failed marriages, bad investment decisions, and accidents associated with real estate or other investments. We help our clients protect their assets from judgments, title property correctly and take steps to make themselves less likely targets of lawsuits. Unfortunately, one of the biggest obstacles most physicians face in protecting their assets is procrastination. Just like patients who postpone visits to their doctor often find after the visit that their condition is much worse than they expected, physicians who postpone meeting with a financial advisor often learn that they should have begun planning much earlier for better financial health and to potentially maximize their financial strength: Call today for a complimentary consultation.