Protecting Your Most Valuable Asset: Disability Insurance Explained

Why Disability Insurance Is Your Most Important (and Most Misunderstood) Financial Protection

For chiropractors, your hands are your livelihood. Your physical ability to adjust patients, manage your practice, and show up day after day is what generates your income. But what happens when an injury or illness prevents you from working? Most healthcare professionals know they should have disability insurance, yet it's one of those things that constantly gets pushed to the back burner.

The reality is that your ability to earn an income is likely your most valuable asset—even more valuable than your home, your practice, or your investment accounts. And yet, it's often the least protected.

Your Lifetime Earning Potential: The Math That Matters

Let's put some numbers to this. Consider a 35-year-old chiropractor earning $150,000 annually. Assuming modest 3% annual increases to keep pace with inflation, this person stands to earn approximately $7.1 million over a 30-year career.

Even a shorter-term disability can be financially devastating. Five years away from your practice represents over $800,000 in lost earnings. Would you insure a piece of equipment in your practice that could generate $800,000? Of course you would. Yet many professionals walk around without adequate coverage for their own earning capacity.

The Three Core Components of a Disability Policy

Understanding disability insurance starts with three fundamental elements:

Your Monthly Benefit Amount is typically around 70% of your gross income. For a chiropractor earning $150,000 annually (about $12,500 monthly), this means approximately $8,750 per month in disability benefits.

The Waiting Period determines how long you must be disabled before benefits begin. The industry standard for professional-level contracts is 90 days, which is why maintaining a three-month emergency fund is critical.

Your Benefit Period specifies how long your benefits will continue. The two most common options are coverage to age 65 (for permanent disabilities) or a five-year benefit period (for shorter-term situations).

What Makes a Quality Contract

Not all disability policies are created equal. The definition of disability in your contract matters enormously. Professional-level contracts use a "regular occupation" definition, meaning if you cannot work as a chiropractor, your benefits pay out—even if you could theoretically do another job.

This contrasts sharply with "any occupation" definitions found in many group plans, which might only cover you for the first two years. After that, if you could work any job based on your education and training (even at significantly lower pay), your benefits could stop.

Another crucial feature is residual disability benefits. This allows you to return to work part-time while still collecting a portion of your disability benefit. If you can only work 50% of your previous hours while recovering, you'll receive 50% of your disability benefit plus your reduced income. This flexibility removes the pressure to return full-time before you're ready.

The Practice Owner's Additional Consideration

If you own your practice, personal disability insurance is only half the equation. Your overhead expenses—staff salaries, rent, utilities—don't disappear when you're unable to work. This is where Business Overhead Expense (BOE) coverage becomes essential.

BOE policies typically have shorter waiting periods (30 days) and benefit periods (12-24 months), covering your fixed expenses while you recover. This protection ensures your team stays employed, your bills get paid, and your practice survives a temporary absence.

Addressing the "Too Expensive" Concern

Yes, disability insurance costs more than term life insurance. You might pay $30-40 monthly for a million dollars of life insurance, while disability coverage could run $100-600 monthly depending on your age and coverage amount.

But there's a reason for this cost difference: disability claims are far more common than death claims. Insurance carriers pay out disability benefits regularly, which is why some have even exited this market entirely.

A general guideline: expect to spend 1-2% of your gross income on disability insurance premiums. Spending 1-2% to protect 70-80% of your income in a worst-case scenario is a reasonable risk transfer.

The Right Time to Get Coverage

The best time to secure disability insurance is when you're healthy. Underwriting is straightforward, and you'll receive full coverage without exclusions. Wait until after you've had an injury, and that specific condition may be permanently excluded from your policy.

For chiropractors in Canada, your options are limited but strong. Currently, only RBC Insurance and Canada Life offer professional-level disability contracts to chiropractors. If your coverage comes from anywhere else, it's worth reviewing whether you have the strongest possible protection.

The Bottom Line

Think of disability insurance as the foundation of your financial plan. You might never need it—and hopefully, you won't. But without it, a single injury or illness could derail decades of financial progress.

Your ability to work is the engine that powers everything else in your financial life. It's time to make sure that engine is properly insured.

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