Crucial insurance every veterinarian needs

Q: I'm a young associate veterinarian with a family. What types of insurance do I need to protect them?

"Since one in three people will become disabled in their lifetime, you really need to have disability coverage first—in addition to the basics," says Mark McGaunn, CPA, CFP, who works with veterinarians and veterinary practices at McGaunn & Schwadron, CPAs in Boston.

McGaunn points out that with most associate veterinarians assuming educational loans these days, they need a way to make those payments—and afford basic living expenses for their families—if they become injured or ill and can't work for an extended period of time. A disability insurance policy would cover that.

Another type of coverage McGaunn recommends is a life insurance policy. There are two basic types of life insurance coverage. One kind values what expenses your dependents would be responsible for in the event of your demise. The other is based on human life value, which takes into account what you would have potentially earned over your lifetime.

Finally, consider adding an umbrella policy. "If you're a dog owner, one dog bite could bring a huge liability," he says. "This extra coverage could prevent you from losing everything."