Disability Insurance for Pharmacists: Breadwinners Need Adequate Coverage

Disability insurance for pharmacists will provide you with money if you’re unable to work because of an injury or illness. But what are the odds that you’ll need it? And how much do you need to be realistically covered?

You might assume you’re adequately covered through your employer’s disability benefits. But many retail and hospital pharmacy group plans are much more restrictive than a personal disability policy because benefits are often limited (regardless of your high salary) and taxable. Therefore, you’ll have less of a payout when you need it the most.

Let’s explore disability insurance for pharmacists, including what our community of pharmacists currently carries, how much coverage is needed and where to find coverage outside of your employer.

Why pharmacists need disability insurance

One in every four workers will experience a disability from age 20 to retirement age, according to the Social Security Administration. That’s pretty terrible odds considering the blood, sweat, tears and money it took to get your PharmD.

Although it’s a sobering statistic, it can be hard to wrap your head around the sheer number of sudden injuries or illnesses that could prevent you from continuing work in a pharmacy.

The Council for Disability Awareness states the following reasons are the most common for long-term disability claims: Musculoskeletal disorders, cancer, injuries (e.g. fractures, sprains and strains of muscles and ligaments), mental health issues and circulatory conditions.

Unless the injury or illness occurs on the job, workers’ compensation won’t kick in. And qualifying for Social Security disability is a battle of its own that often results in denial. Even if you do qualify, the average Social Security Disability Insurance (SSDI) monthly benefit was $1,222.75 as of January 2022.

Disability insurance serves as income protection for the unexpected. It becomes even more important if you have a spouse, partner or children who rely on your pharmacy income.

Special considerations for pharmacists buying disability insurance

Pharmacists might be able to come up with accommodations to address common injuries, like broken bones, to avoid missing work. But that’s not always the case.

Here are a few scenarios where you might benefit from disability insurance:

  • Deteriorating eyesight or injury to the eyes.
  • Injuries to your hands or arthritis.
  • Back issues from a career of standing.
  • Devastating cancer diagnosis or medical emergencies, such as a heart attack or stroke.

Any number of health concerns could be significant enough to affect your ability to read and dispense prescriptions, communicate medication protocol accurately or perform day-to-day tasks that require mobility.

Pharmacists who expect to earn the primary income for their families need to protect against these possibilities.

What disability insurance do pharmacists have?

More than 1,500 people responded to our 2022 Student Loan Planner Insurance Survey. From that sample, we gathered disability insurance information from 68 pharmacists. Here’s what we learned.

Our community of pharmacists: Need versus action

We found that 72% of pharmacists think they need disability insurance within the profession. However, only 16% have their own disability policy.

So, although pharmacists understand the purpose behind having disability insurance, most are relying on limited coverage through their employer. Alternatively, some don’t have any disability coverage at all, which can quickly become a financially dangerous situation in the event of injury or illness.

Breadwinner pharmacists need to make disability insurance a priority

Our survey determined that 66% of responding pharmacists are the breadwinner of their households. Of that group, less than three-quarters of them believed disability insurance is needed.

This is concerning considering so many pharmacists are the sole or primary income earner of their family.

If your spouse, partner or children are counting on you to provide their main financial support, then you need to make disability insurance a priority in your budget.

Disability insurance for pharmacists: How much is needed?

Unless you’re financially independent with significant assets to tap into, we recommend buying the maximum disability benefit available. Generally, this will be somewhere around 60% of your income. However, if you have existing disability coverage, your monthly benefit will likely be adjusted when shopping for an individual policy.

Disability premiums from our community of pharmacists

We received a range of survey responses related to disability premiums. The average monthly payment was $104 per month. But reported premiums ranged from $37 to $186.

However, I wouldn’t put too much weight into these sample payments as many pharmacists either don’t have disability coverage or they’re relying on limited employer coverage. Therefore, the numbers are likely skewed lower than if they had adequate coverage on their own.

Cost estimates for individual disability insurance for pharmacists

Let’s run some cost estimates to see how much disability insurance costs for pharmacists who want their own policy with sufficient coverage.

Using the Bureau of Labor Statistics average pharmacist salary of  $128,710, here’s what a 30-year-old pharmacist in excellent health can expect to pay if they don’t have existing coverage.

The ideal monthly benefit for this salary level is $6,300. In order to secure this maximum benefit, the monthly cost will be:

  • $125 to $169 per month for a 30-year-old male pharmacist.
  • $207 to $280 per month for a 30-year-old female pharmacist.

Unfortunately for women, disability insurance generally costs more than for their male colleagues. However, some insurance companies provide unisex discounts, which can help bring the rate down for women.

Note that these cost estimates include the most common policy riders, including

own occupation coverage, residual disability coverage, non-cancelable and a future increase option. These riders are optional, so you can adjust your disability premium by adding or removing them from your policy.

Additionally, you can choose a longer waiting period (e.g. 90, 180, 365 days) between when you file a disability claim and when you receive the first disability payment. The longer the waiting period, the cheaper the premium will be.

We recommend speaking with an expert independent insurance agent to explain the nuances of each rider to ensure you get the policy you need.

Since pharmacists don’t buy coverage at the same rates as physicians or dentists, insurance companies might offer you wildly different quotes for coverage. The good news is that you should be in a fairly low-risk category, which at the right insurance company might get you a significantly lower rate than you thought.

What disability coverage do pharmacists have through their work?

Disability insurance through employer group plans often come with limitations and unforeseen barriers.

Our survey found that 68% of pharmacists have disability coverage through their employer. Although some coverage is absolutely better than nothing, many pharmacists don’t realize how restrictive their policy is.

For example, Walmart offers long-term disability insurance through Lincoln for up to 50% or 60% of its pharmacists’ average monthly wage. Monthly benefits are capped at $15,000 or $18,000, depending on the plan, and employees are responsible for 100% of the premiums. However, this benefit isn’t available to pharmacists until after 12 months of employment (except for California pharmacists who qualify from the date of hire).

A lot can happen in a year, so solely relying on coverage that hasn’t even kicked in yet, as is the case in this example, could be detrimental. Pharmacists also change jobs, so you want a policy that’s portable that covers you regardless of what stage of your career you’re in.

Additionally, many employer group benefit plans have stricter definitions for what qualifies as a disability than policies you buy individually.

Disability insurance options for pharmacists

If you’re the breadwinner of your household, disability insurance is a must. However, if your spouse earns a similar income that would allow your family to maintain its standard of living without your pharmacy job, then you might opt out of disability coverage.

Start by looking at your existing disability insurance policy. Take time to scrutinize the details, so you know exactly what benefits you’ll receive if it’s ever needed. If your coverage is lacking like most, you have other options.

Some professional associations offer insurance partnerships that might benefit you. For example, the American Society of Health-System Pharmacists (ASHP) offers disability insurance underwritten by New York Life with a monthly benefit ranging from $100 to $4,000.

But don’t automatically sign up for an association group plan just because you have access for being a member. They’re often more costly or have limited coverage, such as the ASHP coverage which caps out at $4,000.

Always shop around to compare policies to get the best coverage and rate.

We can help you quickly compare some of the biggest disability insurance companies to see what coverage is available at an affordable rate.

Start the free quote process by using the form below. You’ll receive a free one-on-one assessment of your insurance needs where you can get all of your disability insurance questions answered to feel more confident in your decision.

You might think disability insurance is something pharmacists either don’t need or can put off. However, if you’re a young pharmacist, a resident, or still in school, protecting your income is a smart move until you have enough passive income to replace your earnings.

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