Physician disability insurance is a crucial safeguard for medical professionals, ensuring financial stability if an illness or injury prevents them from practicing. As a physician, understanding the cost of disability insurance is essential to making informed decisions about coverage. Here’s an in-depth look at the factors influencing the cost of physician disability insurance and what you can expect.

What Determines the Cost of Physician Disability Insurance?

The cost of disability insurance for physicians isn’t one-size-fits-all. Several key factors influence your premium:

1. Age and Health

• Age: The younger you are when you purchase a policy, the lower your premiums will be. Insurers view younger applicants as lower risk because they are less likely to experience health issues.
• Health: Pre-existing conditions or a history of medical issues can increase your premiums. Maintaining good health can help keep costs down.

2. Specialty

Certain medical specialties come with higher risks of disability. For instance:

• Surgeons and anesthesiologists typically face higher premiums due to the physical demands of their jobs.
• Less physically demanding specialties, such as psychiatry or radiology, generally have lower premiums.

3. Coverage Amount and Benefit Period

• Monthly Benefit Amount: The higher the benefit amount you choose, the higher your premiums. Physicians often select benefits that replace 60–70% of their income.
• Benefit Period: Policies offering benefits until age 65 or 67 are more expensive than those with shorter durations.

4. Policy Features

The type and level of coverage also play a significant role:

• True Own-Occupation Coverage: This type of policy ensures benefits are paid if you can no longer work in your medical specialty, even if you’re able to work in another capacity. It’s more comprehensive and typically more expensive.
• Riders: Optional policy add-ons, such as cost-of-living adjustments (COLA) or future purchase options, increase your premium but provide enhanced benefits.

5. Location

Premiums can vary by state due to differences in insurance regulations and cost-of-living adjustments.

How Much Should Physicians Expect to Pay?

On average, physicians can expect to pay 1–3% of their annual income for disability insurance. Here are some example scenarios:

• A resident earning $60,000 per year might pay $50–$100 per month for a basic policy.
• An attending physician earning $250,000 annually might pay $200–$700 per month, depending on the level of coverage and specialty.

How to Reduce Disability Insurance Costs

1. Purchase Early

Buying a policy during residency or fellowship typically locks in lower premiums, even as your income increases over time.

2. Compare Policies

Work with an experienced broker to compare policies from top insurers, such as Guardian, MassMutual, Principal, and The Standard, to find competitive rates.

3. Opt for Group Policies

Group disability insurance offered through an employer or professional association may offer lower premiums. However, these policies may lack the customization and portability of individual policies.

4. Customize Coverage

While comprehensive coverage is important, you can tailor your policy by adjusting benefit amounts, eliminating unnecessary riders, or choosing a shorter benefit period.

Why Disability Insurance is Worth the Investment

For physicians, disability insurance provides peace of mind and financial protection. Without it, an unexpected injury or illness could jeopardize your ability to maintain your lifestyle, pay off student loans, or secure your family’s future.