Insurance coverage tips for physicians

I find it interesting when physicians I work with balk at paying the cost of certain types of insurance but not others. In particular, I encounter the most resistance to purchases of disability and long-term care policies.

The reasoning I hear is often, "That is too much money, and it will all be wasted if I stay healthy." But in fact, all insurance (except some annuities, discussed below) is a form of risk sharing, in which you likely are "wasting" dollars as long as things go well.

I don't encounter nearly the same hesitations when it comes to buying life insurance, which is indeed a waste if you live a long time (those dying early win the life insurance lottery so to speak). Similarly, we also usually don't hesitate to spend thousands of dollars a year to insure our homes against the very unlikely losses from fire and natural disasters.

I'm not sure that I can explain why some types of insurance elicit this different response. What I do emphasize is that the great basic tenet of insurance is to plan for the small possibility of a large loss.

Here are some of my other insurance tips: