Updated 3/14/2025

2025 Guide to Physician Disability Insurance

With salaries typically above $200k annually, physicians rely on their ability to practice medicine as their greatest financial asset, making disability insurance essential. This guide simplifies the key features of disability insurance, from “own-occupation” definitions to benefit amounts, helping you choose the right coverage to protect your income and secure your financial future.

Whether you are a resident or a practicing physician, this complete guide to disability insurance will tell you everything you need to know.

What is Disability Insurance?

Disability insurance is a type of coverage that provides financial protection if an illness or injury prevents you from working and earning an income. It replaces a portion of your salary, ensuring you can meet living expenses, pay off debts, and maintain financial stability during a period of disability. For physicians, this is especially important because their specialized skills and high earning potential could be significantly impacted by even a temporary loss of work. Disability insurance acts as a safety net, offering peace of mind and financial security in the face of unexpected challenges.

Understanding the Risks

A sudden loss of income can be financially devastating, especially for physicians with substantial student loans, family obligations, or high living expenses. To navigate such a challenge, it’s essential to have a plan in place. 

The first step is understanding the risks at play. The chances of you missing paychecks due to a disability are higher than you may think. More than 1 in 4 adults in the United States have some type of disability. Many people assume that most disabilities are caused by accidents, but 90% of disabilities are actually related to illnesses.

There is an easy way to protect yourself from these risks: invest in disability insurance. 

By purchasing disability insurance, you transfer the risk of losing your ability to earn income to an insurance company. In the event that you become disabled, the insurance company is then responsible for covering part of your income. 

With all the time and money invested in education and training, having disability insurance should be an easy decision for any physician. 

Why You Need Disability Insurance

Physicians typically dedicate 10 to 14 years to complete their education and training. They also invest on average $238K in medical school. As a reward, they become one of the top earners in the country.

But what if an illness or accident took away your ability to work and earn a paycheck?  You could potentially jeopardize your ability to meet daily expenses, pay off loans, and save for the future. Having a comprehensive disability insurance policy ensures a steady flow of replacement income, helping you maintain financial stability. Proactively planning for these scenarios can provide peace of mind and protect your financial future. You can even make sure your business cash flow is not interrupted by having a plan that covers your overhead expenses while you are not practicing and your revenue is decreased for a period of time.

How Does Disability Insurance Work?

The first step is to compare the various plans offered by different insurance companies. Once you have settled on the plan that is right for you, you will have to go through a process called underwriting.

Underwriting usually includes both a medical and financial component. Medical underwriting involves a review of your medical history, and may include an exam if deemed necessary. Financial underwriting typically involves a review of your pay history to confirm that you are eligible for the amount of coverage you are applying for.

Once a policy is offered and you start to pay premiums, your insurance coverage will begin.

But what happens if you need to collect from the insurance company due to an illness or accident?  The first step is to understand if you meet the definition of disability. Every insurance policy includes a definition of disability that you need to meet to file a claim. Definitions can vary slightly across insurance providers.

Assuming you meet the definition of disability, you are eligible to file a claim as soon as you suffer an injury or disability. Most insurance companies will require that you provide a series of documents and reports, including medical records and evidence from your physician and employer that your disability is preventing you from working.

Once a claim has been filed and approved, you will need to satisfy the elimination period. Every disability insurance policy has a waiting period and the length can vary, but the standard waiting period for individual long-term disability policies is 90 days. What this means is that you would have to wait 90 days from the time that you were disabled before you become eligible for the monthly benefit. This is why it is always important that you file claims as early as possible.

Once your elimination period is over, you will start to receive your monthly benefit and your payouts will continue until you are able to return to work or reach the end of the benefit period, whichever comes first.

Understanding Important Components of Disability Insurance for Physicians

Before you choose a policy, it is important to understand the basic components, including the definition of disability and the differences between group policies and individual policies.

1. Short-Term vs. Long-Term Disability Insurance

Disability insurance is generally divided into short-term and long-term coverage, each serving distinct purposes. Short-term disability insurance provides benefits for temporary disabilities, typically covering a period of 3 to 6 months, with a waiting period of just a few days to a couple of weeks. It’s ideal for conditions like recovering from surgery or a short-term illness.

Long-term disability insurance, on the other hand, is designed for more serious or permanent conditions that prevent you from working for an extended period, often until retirement age. These policies usually have a longer waiting period, ranging from 90 to 180 days, but they offer sustained financial protection over years or even decades. Physicians often prioritize long-term coverage, as it provides crucial income replacement for scenarios that could significantly impact their career and earning potential.

More on long-term vs. short-term disability insurance. 

2. Group vs. Individual Disability Insurance

When choosing disability insurance, it’s important to understand the differences between group and individual policies. Group disability insurance is often offered through employers or professional associations, typically at a lower cost due to group rates. However, these policies may have limited customization, lower benefit amounts, and can be terminated if you leave the employer or association.

Individual disability insurance, on the other hand, is tailored specifically to your needs. It provides greater flexibility, higher benefit limits, and features like “own-occupation” coverage, which is especially valuable for physicians. While individual policies may cost more, they offer portability, ensuring your coverage stays with you regardless of job changes, making them a preferred option for long-term financial security.

More on group vs. individual disability insurance policies.  

3. Residual Disability Coverage

Residual disability coverage is an essential feature of many disability insurance policies, designed to provide partial benefits if you experience a significant loss of income due to a partial disability. Unlike total disability benefits, which require you to be completely unable to work, residual coverage supports you when you can still perform some job duties but your earning capacity is reduced.

For physicians, this is particularly valuable because even a minor injury or illness could limit their ability to practice fully, leading to reduced hours or fewer patients. Residual disability benefits ensure you receive a proportionate payout to offset the income loss, allowing you to maintain financial stability while continuing to work as much as you are able.

More on partial vs. total disability.

4. The Definition of Disability

The definition of disability in a disability insurance policy determines the circumstances under which you are eligible to receive benefits and is a critical factor in choosing the right coverage. Policies for physicians often include an “own-occupation” definition, which provides benefits if you are unable to perform the duties of your specific medical specialty, even if you can work in another capacity.

Other definitions, like “any occupation,” are more restrictive, requiring you to be unable to work in any job for which you are reasonably qualified. Some policies also offer modified definitions, blending aspects of both. Understanding how your policy defines disability is crucial so you can select coverage that aligns with your career and financial needs, offering peace of mind if the unexpected happens.

More on own occupation vs. any occupation definitions of disability

Why You Shouldn’t Just Rely on Your Employer-Sponsored Disability Plan

While employer-provided disability insurance is a convenient benefit, it often falls short of offering comprehensive financial protection. Group policies typically replace only a limited percentage of your income and may not account for bonuses, commissions, or other earnings. Additionally, employer-sponsored coverage is usually not portable, meaning you lose it if you change jobs.

For physicians, who often have higher earning potential and specialized skills, relying solely on employer coverage could leave significant gaps in income replacement. Supplementing or replacing group insurance with an individual policy ensures more robust coverage tailored to your unique needs, including higher benefit limits and features like “own-occupation” protection.

More on the limitations of employer-sponsored disability plans. 

When to Apply for Disability Insurance

The best time to apply for disability insurance is now.

Premiums are generally lower for younger applicants, and you’re more likely to qualify for favorable terms without exclusions for pre-existing conditions. For physicians, securing coverage during medical residency or fellowship is particularly advantageous, as many insurers offer special discounts and benefits for trainees. Waiting until later in your career could mean higher premiums or reduced options if health issues arise. Early planning ensures you have reliable protection in place before you need it, safeguarding your income and financial future.

How Waiting on Disability Insurance Can Hurt You in the Long Run

Premiums are typically lower when you are younger and healthier, as insurers view younger applicants as lower risk. Because you will likely carry your policy through retirement age, investing in disability insurance at a young age can save you tens of thousands of dollars over your career.

As you age, the likelihood of developing health conditions increases, which could result in higher premiums or exclusions for pre-existing conditions in your policy. You also run the risk of becoming ineligible if you experience a long-term disability before you have an opportunity to secure a policy.

More on the cost of waiting to buy disability insurance. 

How Much Disability Insurance Do Physicians Need?

Determining the right amount of disability insurance depends on your income, expenses, and financial goals. Physicians typically need coverage that replaces 60–70% of their pre-tax income, which allows them to maintain their standard of living, pay off debts, and cover essential expenses if they’re unable to work.

It’s also important to factor in additional costs, such as student loan payments, which don’t pause for a disability. Many policies allow for future benefit increases as your income grows, ensuring your coverage keeps pace with your financial needs.

More on determining the right amount of physician disability insurance. 

When is Disability Insurance Taxable?

The taxability of disability insurance benefits depends on how the premiums are paid. If your employer pays the premiums or you use pre-tax dollars to cover them, any benefits you receive will generally be considered taxable income. However, if you pay the premiums yourself using after-tax dollars, the benefits are typically tax-free.

For physicians, this distinction is crucial when planning how much coverage to purchase, as taxable benefits may not stretch as far as tax-free ones. Understanding the tax implications of your policy ensures that you have adequate coverage to meet your financial needs in the event of a disability.

More on disability insurance and taxes. 

What Determines the Cost of Disability Insurance for Physicians?

The cost of disability insurance for physicians varies based on several key factors. Understanding these components can help you make informed decisions about selecting the right policy to meet your needs.

1. Gender/Age

Younger applicants typically pay lower premiums because they are less likely to experience a disability, and premiums increase with age. Gender also plays a role, as women often face higher premiums due to statistical differences in disability claims. Applying early is a smart way to secure lower rates.

2. Occupation

The nature of your medical specialty significantly affects your premiums. Higher-risk specialties, such as surgeons or emergency medicine physicians, often have higher costs than lower-risk fields like psychiatry or dermatology. Insurers assess the physical demands and risks associated with your occupation when setting rates.

More on the occupation class in a disability insurance policy.

3. Region

Where you live can impact your premiums due to regional cost-of-living differences, state insurance regulations, and claim rates in your state.

4. Monthly Benefit

The amount of monthly income replacement you choose directly affects the cost of your policy. Higher benefit amounts mean higher premiums. Physicians often opt for coverage that replaces 60–70% of their income, ensuring they can maintain their lifestyle and meet expenses during a disability.

5. Riders

Optional policy riders, such as residual disability coverage, cost-of-living adjustments (COLA), or future increase options, enhance your coverage but also increase your premiums. These riders offer valuable benefits tailored to your specific needs and long-term goals.

6. Elimination Period

The elimination period, or the waiting period before benefits begin, influences your premium. Shorter elimination periods, such as 30 or 60 days, result in higher costs, while longer periods, like 90 or 180 days, reduce premiums. Physicians with emergency savings may opt for longer elimination periods to save on costs.

More on how to choose an elimination period for your disability policy. 

7. Benefit Period

The benefit period determines how long you’ll receive payments if you’re disabled. Policies with longer benefit periods, such as coverage until retirement age, are more expensive than those with shorter durations, like five or ten years. Physicians often prioritize long-term benefit periods to ensure financial security throughout their careers.

More on disability insurance benefit length.

Disability Insurance Riders

Riders are optional add-ons to a disability insurance policy that provide additional benefits to enhance coverage based on your specific needs.

1. Residual Disability

This rider provides partial benefits if you experience a loss of income due to a partial disability, allowing you to maintain financial stability while still working in a limited capacity.

More on partial disability vs. total disability.

2. Catastrophic Disability

Designed for severe disabilities, this rider offers additional benefits to cover expenses for long-term care, home modifications, or other substantial needs that arise from a catastrophic condition.

More on the catastrophic disability rider.

3. Retirement Benefit

This rider helps ensure contributions to your retirement savings continue during a disability, preventing disruptions to your long-term financial goals.

More on the retirement benefit rider. 

4. Cost of Living Adjustment (COLA)

COLA riders increase your benefits annually to keep pace with inflation, ensuring your coverage remains effective over time, especially for long-term disabilities.

More on the cost of living adjustment rider. 

5. Student Loan

This rider reimburses student loan payments if you become disabled, a particularly valuable feature for physicians with substantial education debt.

More on the student loan rider.

6. Future Increase Option

This rider allows you to increase your coverage as your income grows without undergoing additional medical underwriting, ensuring your policy keeps up with your evolving financial needs.

More on the future increase option. 

7. Automatic Benefit Increase

This rider automatically raises your benefit amount over time, typically annually, to account for income growth and inflation, even if you do not actively request an increase.

More on the automatic benefit increase rider.

What You Need to Know Before Signing Up for a Disability Insurance Policy

Before committing to a disability insurance policy, it’s essential to understand key aspects like the definition of disability, costs, and the waiting period.

1. Definition of Disability

Physicians need to pay close attention to how disability is defined in their insurance policy. An own-occupation and specialty specific definition is a must for doctors because you can collect benefits as long as  you cannot perform some duties of your specialty. Even if you continue to work in medicine, as a faculty advisor for example, you can still collect your benefit.

More on own-occupation vs. any-occupation coverage. 

2. Fixed vs. Variable Costs

When selecting a disability insurance policy, you’ll encounter two common premium structures: fixed and variable. Fixed, or level, premiums remain the same throughout the life of the policy, providing long-term cost predictability and stability.

Variable, or graded, premiums start lower but gradually increase over time, typically aligning with your rising income during the early stages of your career.

For physicians, variable premiums can be appealing during training or the initial years of practice, but level premiums are more cost-effective in the long run. Choosing between the two depends on your current budget, long-term financial goals, and how much stability you want in your insurance costs.

More on level vs. graded premiums. 

3. Waiting Period

The waiting period is the time between the day you become disabled, and the day that you are eligible to start collecting benefits.

It is important to understand how long you can afford to be without a steady flow of income before determining your waiting period. The longer the waiting period, the lower your premiums will be, but the longer it will take to start collecting monthly benefits.

How to File a Disability Insurance Claim

Start by notifying your insurance company as soon as you believe you qualify for benefits, and request the necessary claim forms. Many insurance companies have a 20-30 day time frame to file a claim that starts on the date you suffered the disability.

Make sure you are aware of both the required filing timeline and the definition of disability outlined in your policy.

More on how to file a disability insurance claim.

Where to Get Physician Disability Insurance

Shopping for disability insurance can feel overwhelming with so many options to consider. It’s important to work with a trusted broker or advisor who specializes in physician-focused policies and has access to multiple carriers. DocPlanning simplifies this process by offering tailored guidance and presenting you with personalized quotes from top-rated insurers. Our expertise in physician disability insurance ensures you’ll understand the nuances of your various coverage options.

With the people at DocPlanning, you’ll always receive clear, unbiased advice to help you find the best protection for your career and financial future. Thousands of doctors have trusted DocPlanning to help them secure physician disability Insurance. You do not pay more by working with a broker.

Who We Work With

At DocPlanning, we partner with top-rated insurance carriers known for their financial stability and comprehensive disability insurance options tailored to physicians.

Guardian

Founded over 160 years ago, Guardian has built a reputation for stability, financial strength, and exceptional service. Guardian is one of the largest and most trusted insurance companies in the United States. They are one of a few insurance companies who provide a true own occupation benefit and offer robust disability insurance solutions for doctors.

More on Guardian Life.

Ameritas

Founded in 1887, Ameritas Life Insurance Company has a long history of providing insurance and financial services. With over a century of experience, Ameritas has built a solid reputation for financial strength, stability, and dedication to customer service. They are one of a few insurance companies who provide a true own-occupation benefit and offer robust disability insurance solutions for doctors.

More on Ameritas.

The Standard

The Standard Insurance Company has been providing insurance services since 1906. Their longevity and stability in the industry reflect their commitment to meeting clients’ needs with consistency and reliability. They are one of a few insurance companies who provide own-occupation coverage and offer robust disability insurance solutions for doctors.

More on The Standard.

MassMutual

Massachusetts Mutual Life Insurance Company, commonly known as MassMutual, is a leading mutual life insurance company. Founded in 1851, MassMutual has grown to become one of the most reputable and financially stable insurance providers in the United States. With a strong focus on financial security and personalized service, MassMutual offers a comprehensive range of insurance and financial products designed to meet the diverse needs of its policyholders. They are one of a few insurance companies who provide a true own-occupation benefit and offer robust disability insurance solutions for doctors. 

More on MassMutual.

Principal

Founded in 1879, Principal Financial Group has evolved into a global financial services provider. Principal Life Insurance, a division of Principal Financial Group, offers a wide array of insurance products, including disability insurance. With over 140 years of experience, Principal has built a reputation for reliability and financial strength. Its solid ratings from financial institutions like A.M. Best and Moody’s are a testament to its commitment to delivering long-term financial protection.

More on Principal.

State By State Guide to Disability Insurance

We help doctors in all 50 states secure own occupation disability insurance. Dive into the statistics in your specific state and learn the unique benefits and considerations for you.

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Get the Specialty Specific Coverage You Need

We understand the unique challenges and income protection needs of each specialty, ensuring every physician gets tailored disability insurance solutions that align with their specific career and financial goals.