As you are reviewing your options for insurance, you may come across the words “stepped” or “level,” referring to the premiums you will pay.
It’s important to know the difference, because while the overall pricing of a policy you’re considering—say physician disability coverage—might be the same, the impact on your budget could be substantially different.
Level premiums divide the lifetime cost of the policy into equal payments. So, your payment—whether monthly, quarterly, or annual—remains the same throughout the life of the policy.
Stepped premiums are lowest early in the policy life when risk is lowest but increase as you age and risk grows. Generally, your income will have grown as well, so you can accommodate the rate increases.
How often will the stepped premium increase? That will be defined by the policy. It could be as often as every year, or at the point when you, the policyholder, move into a new age band, for example every five years.
Which type of premium is right for you? That’s a matter for discussion with an Insurance Specialist who is familiar with your profession and your unique requirements. However, there are some general guidelines that will influence your decision.
You can get specific information, based on your current situation and needs, by calling a Physician Insurance Specialist at 888-627-5902. These specialists work with physicians and their families to arrive at solid financial protection solutions. They also work with highly rated companies who offer favorable rates. Get acquainted with them now. They’ll be happy to provide answers to your insurance questions and solutions that work for you.
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