Life Insurance

There are a variety of options available to help pay for final expenses, replace income, cover debts and other expenses.


Life Insurance

Life insurance covers the life of the insured and provides financial protection for the policy's named beneficiaries. If you have a family or own your practice, you probably need the protection that life insurance offers.

What types of life insurance are available?

There are two basic types of life insurance to consider: term and permanent. If you are just starting to practice and your cash flow is low or unpredictable, you might choose a term policy.

This coverage provides a level face amount (death benefit) that does not decrease over time. It is an affordable coverage for a specific length of time.

If you are an established D.C., permanent life insurance may be more appropriate for your situation. There are several types of permanent insurance, such as:

  • Whole Life Insurance  – fixed premiums, guaranteed death benefit and cash value growth
  • Universal Life Insurance – flexibility to change payments, premiums and death benefit options
  • Variable Universal Life Insurance flexibility to change payments, premiums and death benefit options. This insurance also provides the options to take investment risks in return for a potentially higher cash value.

Endorsements available for additional coverage

There are certain endorsements to consider as well, such as waiver of premium (if you become disabled, your premium is waived). Accidental death and dismemberment is another "add-on" endorsement that provides payment if there is a loss of life, hearing, sight or paralysis.

Critical illness coverage can be added to some life policies. It provides the insured with coverage if diagnosed with a critical health problem such as cancer, heart attack, major organ failure, stroke, and others. The policy pays the insured the face amount after the diagnosis is made and, like disability coverage, the insured doesn't have to die to collect the benefit.

Other life insurance needs

If you own your practice or work in a partnership, life insurance may be important for business continuity and succession planning. Your life insurance agent can discuss what best meets your needs. Some options, depending on the situation, are:

  • Key person insurance – This insures individuals who are instrumental in your practice.
  • Buy-sell agreement – This enables a surviving business owner to purchase the deceased owner’s share of the business with life insurance proceeds.

The information in the NCMIC Learning Center is offered solely for general information and educational purposes. It is not offered as, nor does it represent, legal or professional advice. Neither does this information constitute a guideline, practice parameter or standard of care. You should not act or rely upon this information without seeking the advice of an attorney familiar with the specific legal requirements of the state(s) in which you practice. If there is a discrepancy between the site and an insurance policy you have with NCMIC, the policy will prevail.