Disability insurance for physicians
Direct answer
Physicians should hold an individual policy whose definition of disability names their specialty, because an employer plan usually caps the benefit below a physician’s income, counts only base pay, and ends when the job ends. Buy before a health issue enters your record, and use a future increase option so the benefit can grow with your income.
Key facts
Check first
- How your contract defines "your occupation"
- Whether bonuses and RVU pay are covered
- Who pays the premium (it decides the tax)
Must-have features
- True own-occupation, specialty language
- Non-cancelable and guaranteed renewable
- Residual and partial disability rider
- Future increase option
Common pitfalls
- Relying on the employer plan alone
- Mental nervous limits of 24 months
- Waiting until after a health issue is on record
- Letting the policy lapse during a job change
What is different for physicians
A physician’s income depends on a specific clinical skill set, and the value of a policy depends on whether the contract protects that skill set or only your ability to work in medicine at all. A surgeon who can no longer operate can often still teach or consult. Whether the policy keeps paying when that happens is decided by a few words in the definition of disability.
Employer plans are a starting point
Most physicians are now employed by a health system or a group, and most of those employers provide group long term disability coverage. These plans commonly replace a percentage of base salary up to a monthly cap, leave out production pay, are taxable when the employer pays, and end when you leave. An individual policy fills the difference and stays with you.
Specialty language
Some contracts treat your recognized specialty as your occupation. Others look only at whether you can work as a physician. Ask for the definition in writing and compare it with the wording below before you apply.
Contract language: strong vs weak
Two clauses that both get called “own-occupation.” Read the bold words.
Strong wording
“Totally disabled means that, solely due to injury or sickness, you are unable to perform the material and substantial duties of your occupation. If you have limited your practice to a recognized specialty, that specialty is your occupation. You may work in another occupation and still receive full benefits.”
Pays if you cannot do your own work, even while you earn in another role.
Weak wording
“Totally disabled means you are unable to perform the material duties of your occupation and you are not engaged in any other gainful occupation. After 24 months, totally disabled means you cannot perform any occupation for which you are reasonably suited by education, training, or experience.”
Stops paying once you take other work, and after two years may deny a claim entirely.
Try it with your numbers
Your group LTD gap
- Group plan pays (before tax)
- $12,000
- Estimated after tax at 30%
- $8,400
- Monthly gap to 60% of income
- $9,600
Questions physicians ask
Have your group plan read by someone who reads them daily
Send the summary. You get a written gap analysis within two business days. No call required.