In more than two decades of working with physicians, I've watched doctors agonize over portfolio allocations and student loan strategies while leaving the single largest asset they own completely exposed: their ability to earn an income.
Think about it. A 35-year-old attending earning $350,000 has somewhere north of $10 million in future earning power ahead of them. No 401(k), no real estate position, no brokerage account comes close. And yet disability insurance—the one product designed to protect that asset—is the thing physicians most often put off until "things slow down."
They never slow down. I've seen too many physicians become uninsurable during the exact window they kept telling themselves they'd handle it later. So let's handle it now. Here's what you must know about implementing disability insurance correctly, and the mistakes I see physicians make again and again.
What You Must Know
1. Your specialty is your occupation—insist on "true own-occupation" coverage
This is the single most important provision in the contract, and it's where most policies quietly fall short. A true own-occupation definition means that if you can no longer perform the material duties of your specialty, you collect your full benefit—even if you go on to earn income in another role.
For a surgeon who loses fine motor function, that distinction is everything. Under a weaker "any-occupation" or "transitional" definition, the insurer can reduce or deny your benefit because you're technically able to work somewhere. Don't accept anything less than true own-occupation, ideally with specialty-specific language. Only a handful of carriers offer it properly to physicians—Ameritas, Guardian, MassMutual, Principal, and The Standard are the names most respected in the physician community, and they're the carriers we work with at Attend.
2. Get it non-cancelable and guaranteed-renewable
These two terms work together. Guaranteed-renewable means the insurer can't cancel your policy or change its terms as long as you pay the premium. Non-cancelable means they also can't raise your premium. Lock both in, and the policy you qualify for today is the policy you keep for your entire career—at the rate you started with.
3. Understand the gap in your employer's group plan
Most hospitals and large groups offer some form of group long-term disability (LTD), and I'm glad they do. But understand what it is and isn't:
- It's usually not true own-occupation. Many group plans revert to an "any-occupation" standard after a couple of years.
- The benefit is often taxable. If your employer pays the premium with pre-tax dollars, your benefit gets taxed when you need it most—shrinking a "60% of income" benefit to something far smaller in your pocket.
- It's not portable. Leave the job, and the coverage typically stays behind.
- It frequently ignores bonus, call pay, and productivity income—often a huge slice of a physician's real compensation.
Group coverage is a foundation, not a plan. The right move is almost always to coordinate it with an individual policy you own and control.
4. Know the tax math
When you pay premiums on an individual policy with post-tax dollars, the benefit comes to you tax-free. That's why a private policy paying a smaller headline benefit can actually deliver more usable income than a larger taxable group benefit. Run the after-tax number, not the gross.
5. The riders that actually matter
The base policy is the foundation; the riders make it fit a physician's life. The ones worth understanding:
- Residual / partial disability — pays a proportional benefit if you can still work but at reduced capacity or income. Critical, because most disabilities are partial, not total.
- Future Increase Option (FIO) — lets you raise your coverage as your income grows without new medical underwriting. If you buy young, this is how your coverage keeps pace with your earnings.
- Cost-of-Living Adjustment (COLA) — inflation-protects your benefit while you're on claim.
- Student loan rider — covers loan payments on top of your benefit during disability.
- Catastrophic and recovery benefits — extend protection for severe cases and for the income gap during recovery.
6. Buy it young, buy it healthy
Coverage is cheapest when you're a resident or fellow, and pricing locks in based on your age and health at issue. More importantly, your insurability is never higher than it is right now. A new diagnosis, a pregnancy complication, even an off-label medication can add exclusions or take you out of the market entirely. If you're a trainee, ask specifically about Guaranteed Standard Issue (GSI) policies—offered through certain institutions with no medical underwriting, they can be a lifeline for anyone with a pre-existing condition.
What to Avoid
Avoid waiting for the "right time"
There isn't one. The most expensive disability policy is the one you couldn't buy because you waited. I've seen physicians go from fully insurable to completely uninsurable in a matter of months. If you're healthy today, that's the signal to act—not a reason to delay.
Avoid treating your employer's plan as the whole answer
We covered the gaps above. Relying on group LTD alone is one of the most common and most dangerous assumptions I see. Coordinate it; don't lean your entire financial security on it.
Avoid shopping on premium alone
The cheapest quote almost always means a weaker definition of disability, fewer riders, or buried exclusions—the parts that don't show up on a one-line price comparison but determine whether a claim actually pays. Ask for the carrier's official policy illustration and read the definition of "total disability" before you look at the price.
Avoid skipping the Future Increase Option
I understand the instinct to trim cost as a resident. But declining FIO means that when your income triples as an attending, you'll need fresh underwriting to raise your coverage—and you may no longer qualify. Buy the option while you're young and healthy.
Avoid the conflicted or captive agent
Here's an uncomfortable truth about my industry: some agents represent a single carrier and will only show you what they sell. Others won't mention GSI options because it might mean splitting or losing a commission. That's backwards. You deserve an independent agent who compares carriers and tells you when another path serves you better—even when it doesn't pay them. As fiduciaries on the advisory side and an independent agency on the insurance side, that's the standard we hold ourselves to.
Avoid making your spouse your insurance policy
"My partner earns plenty, so I don't really need coverage" is a plan that depends on circumstances never changing. Incomes change, marriages change, and life is unpredictable. Your protection should stand on its own.
Avoid over- or under-insuring
Carriers will generally let you insure up to roughly 60% of your gross income—they don't want to remove your incentive to return to work. Don't reflexively buy the maximum, and don't lowball it either. The right benefit accounts for your real expenses, your savings goals, and the fact that benefits typically end in your mid-to-late 60s. This is exactly the kind of number that should be set inside your broader financial plan, not in isolation.
What This Means for You
If you're in residency or fellowship: This is the cheapest and easiest your coverage will ever be to get. Lock in true own-occupation now, add the Future Increase Option so your benefit can grow with your income later, and ask about GSI if any part of your health history could complicate underwriting down the road.
If you're a new attending: You likely have group LTD through your employer—coordinate it with an individual policy rather than leaning on it alone. If you bought FIO during training, this is the moment to exercise it. And confirm your benefit actually reflects bonus, call pay, and productivity income, not just base salary.
If you're an established physician or in private practice: Revisit your coverage every few years. As your income grows, so does your insurable maximum—but only if you ask for it. If your policy is several years old, check whether COLA and residual disability riders were even on the market when you bought it.
If you're changing jobs or going independent: Don't assume your new employer's group plan picks up where the old one left off. Confirm the gap in writing before you give notice. Your individual policy, unlike group coverage, stays with you no matter where you practice.
What to Do Right Now
- Get your insurability confirmed. Even if you're not ready to buy today, find out where you stand health-wise—that window can close faster than you expect.
- Read your current definition of "total disability." If you have group LTD, request the certificate of coverage and check whether it's true own-occupation or reverts to "any-occupation."
- Ask about FIO and GSI. If you're a trainee, these two provisions matter more than almost anything else in the contract.
- Run the after-tax math. Compare what a taxable group benefit actually pays out against a tax-free individual benefit before assuming the bigger number wins.
Where This Fits in Your Bigger Picture
Disability insurance isn't a standalone purchase—it's the foundation that makes the rest of your plan possible. There's little point optimizing investments or mapping out retirement if a single illness or injury can wipe out the income those plans depend on. Protect the engine first.
At Attend, we do the legwork: we gather and compare quotes across our physician-vetted carriers, build the policy around your specialty and career stage, and stay your point of contact for the life of the coverage. There's no fee to you for our insurance work—the carriers compensate us—and because we're independent, our advice isn't tied to any one company. That's what it means to be a physician-focused team that puts your interests first.
If you take one action after reading this, make it this: confirm whether you're insurable while you still are.
Ready to protect your income?
For more guidance written for physicians, by people who understand your world, visit the Attend Insights library or reach out to our team.
Frequently Asked Questions
Is disability insurance worth it if I already have coverage through my hospital? Usually yes—coordinated with, not instead of. Group LTD is a foundation, not full protection, particularly because of the any-occupation switch and the taxable-benefit issue described above.
How much disability coverage do I actually need? Carriers generally cap coverage around 60% of gross income. The right number depends on your expenses, savings goals, and how long you want benefits to last—best set inside a full financial plan, not picked in isolation.
What's the real difference between non-cancelable and guaranteed-renewable? Guaranteed-renewable locks in your right to keep the policy as long as you pay premiums. Non-cancelable additionally locks in your premium rate. You want both, not one or the other.
When is the best time to buy disability insurance? As early as possible—ideally during residency or fellowship, when you're cheapest to insure and your insurability is at its highest. Waiting is the single costliest mistake physicians make with this coverage.
Attend Wealth works exclusively with physicians. If you want a second set of eyes on your disability coverage, reach out to our team.
COMPLIANCE NOTE: This article is for educational purposes only and does not constitute personalized tax, legal, or investment advice. Tax laws and contribution limits change annually. Readers should consult a licensed tax professional and/or financial advisor for guidance specific to their situation. References to tax rates, contribution limits, and income thresholds are based on 2025–2026 IRS guidelines and are subject to change. Attend Wealth is a fee-based RIA; insurance solutions are offered with disclosed commissions.
Premium. The cost of the insurance policy.
Underwriting. The process used by the insurance company to evaluate risk, determine insurability, and determine premium prices. The process often involves a review of your job, income, age, gender, medical records, laboratory data, and prescription drug history.
Individual Policy. With an individual policy, you purchase the policy from a broker or agent. Your ability to get coverage is not based on your employer or membership in a group or association. Individual policies are portable, meaning you keep the policy when you change employers.
Group Policy: Group policies are made available to employees of a company or members of an association. There is typically discount associated with group plans and employers often subsidize the premiums for employees. The underwriting process for these plans is simplified relative to an individual policy. However, these plans may not be portable, meaning you could forfeit the policy if you leave the employer or association that is affiliated with the plan.
Definitions of disability. The definition of disability is one of the most important aspects of a policy, because you will only be eligible for benefits if you meet the definition.
- Own occupation: You qualify for benefits if you are unable to perform each and every task required by your occupation at the time of disability. For example, a surgeon with a hand injury who cannot operate would qualify for disability benefits. Moreover, she would continue to receive disability benefits even if she gained employment doing a different occupation.
- Any occupation: You qualify for benefits if you are unable to perform any occupation for which you are qualified by training, education, or experience. The surgeon with a hand injury would not qualify for benefits under this definition, since she could find employment in an alternative occupation for which she is qualified, such as teaching medical students or working for an insurance company.
Guaranteed Renewable. If your policy is guaranteed renewable, the insurance company cannot cancel your policy or reduce your benefits as long as you pay your premiums. However, insurance company can increase your premium.
Non-cancellable. If a policy is non-cancellable, the insurance company cannot cancel the policy, reduce the benefits, or increase the premiums as long as you pay the premiums.
Elimination period. The time between when you become disabled and when you qualify for benefits.
SHORT-TERM VS. LONG-TERM DISABILITY
Disability insurance policies are generally categorized as being either short or long term.
Short-term disability insurance is designed to provide income protection for periods of temporary disability. In general, short-term disability insurance:
- Is provided by employers
- Provides benefits of 60-70% of pre-disability monthly income, though it is often capped at $10,00-$15,000 per month
- Begins paying benefits within a few weeks of disability
- Provides benefits for a limited duration, typically less than 1 year
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Many physicians who do not have employer-sponsored short term disability insurance choose not to purchase individual policies. We believe this is reasonable, provided they have an alternative means to cover their monthly expenses (e.g., sufficient emergency fund, high earning spouse) until long-term disability benefits begin.
Long-term disability insurance in designed to provide income replacement due to an illness or injury that lasts for many months or longer. Financially, long-term disabilities are far more serious than brief disabilities.
In general, long-term disability insurance:
- Does not pay benefits until several months after the onset of disability
- Provides benefits for many years, often until retirement age
- Provides benefits of up to 60-70% of pre-disability income, although benefits are typically capped at $15,000-$20,000/month
There are four sources of long-term disability insurance:
- Social security
- Employer-sponsored policies
- Group policies
- Individual policies
Social security disability insurance is funded through payroll tax and provides limited benefits to those who meet a strict definition of disability.
We do not recommend relying on social security disability insurance because:
- The approval rate is very low (~35% of applicants are approved on their first application)
- The disability definition is too restrictive. Benefits are only approved if you cannot participate in any substantial gainful activity due to a disability that will result in death or last no less than 12 months
- The benefits are too low for most physicians, averaging $800 - $1,800 per month
Employer-sponsored disability policies are offered as a benefit by many companies. These policies may be subsidized or completely paid for by your employer. There is often no underwriting or medical exam.
We recommend taking advantage of these policies if they are available to you. However, make sure you understand the limitations of your employer-sponsored policy. These may include:
- Lack of Portability. Most plans are not portable, meaning you lose coverage if you change jobs.
- Benefit caps. Some plans cap benefits at levels that are too low for most physicians (e.g., $3,000/mo).
- Weak disability definition. These policies may not use an own occupation of disability. Alternatively, an own occupation definition may be used for 2 years. If you remain disabled after two years of receiving benefits, the policy may adopt an any occupation definition of disability.
- Taxation. If premiums are paid for by your employer, the benefits will be subject to taxation.
Group disability insurance policies are offered by many professional associations, such as the American Medical Association (AMA). These policies are less expensive than individual policies, but still require medical underwriting. Policies offered through physician organizations generally include favorable terms, such as high monthly benefit limits and portability. Moreover, since premiums are paid using after tax dollars, the benefits are not subject to taxation.
The disadvantage of group disability policies is lack of flexibility, meaning you have limited ability to choose some features of the policy. Commonly cited weaknesses of the AMA plan include:
- The definition of disability. The base AMA plan uses an “own-specialty” definition of disability. This is similar to own occupation, but you do not receive benefits if you choose to work in a different specialty following disability. However, as of 2022, you can now obtain true “own occupation” disability protection for an additional fee.
- Guarantees. The AMA plan is not guaranteed renewable or non-cancellable, so your premiums can increase or the policy could be cancelled if the AMA decided to stop offering it.
- Low benefit limits. The benefit cap is $15,000/mo, which might be too low for high earners.
When shopping for insurance, we recommend that you apply for group policies in addition to individual policies. These policies can be a bargain and the limitations are likely overstated by insurance brokers.
Individual disability insurance policies offer the greatest degree of customization and flexibility. You can purchase these policies from an insurance company through an agent or broker. These policies are portable and paid for using after-tax earnings, so the benefits are not taxable. Some insurance companies offer very high benefit limits (up to $30,000/mo) which may be important if you are a very high earner. Most plans are guaranteed renewable with an option to be non-cancellable.
Individual disability insurance policies are expensive. In general, the cost of the premium will be between 2-6% of the monthly benefit. The cost is impacted by your gender, age, and policy features (definition of disability, elimination period, non-cancellability, etc.).
ADVICE ON GETTING DISABILITY INSURANCE (note: need a better name for this)
Now that you understand the basics of disability insurance, it’s time to create a plan. We recommend doing this during your residency or fellowship training, no later than the final year of training. As a resident, you will usually qualify for premium discounts. Moreover, applying for insurance when you are young and in good health will always result in lower premiums and better policy terms.
- Determine how much coverage you need.
Most financial advisors recommend obtaining benefits equal to approximately 60% of your monthly salary. If the benefits are non-taxable, your disability benefits would be approximately equal to your pre-disability income.
It is possible that you will need less coverage. For example, if you live well below your means, have a spouse that earns a high salary, have little debt, or have substantial savings, it is reasonable to obtain less coverage.
- Determine how much coverage you already have.
Do you have an employer-sponsored plan from an employer you intend to remain with for several years? If so, determine how much coverage that provides, as well as the details of coverage such as disability definitions, benefit duration, etc.
If you have a short-term disability insurance policy, review the terms and benefit duration. This will impact the elimination period you choose for your long-term disability policies.
If you have previously purchased a group or individual policy, review them to identify weaknesses in your policy or gaps in coverage. Do your existing policies provide enough coverage? Too much coverage?
- Make sure you have an adequate emergency fund.
Remember, long-term disability insurance has an elimination period that is typically at least 3 months. Getting a plan with a longer elimination period will reduce your premiums, saving you money in the long run.
We recommend an emergency fund equal to at least 3-months of non-discretionary expenses (mortgage/rent, car payments, food, health insurance, etc).
- Find a reputable insurance broker who is experienced working with physicians
You can buy insurance from a broker or an agent. An agent works for one insurance company and will try to sell their product. A broker has relationships with multiple companies and will get you quotes from multiple companies.
Apply for multiple policies so you have as many options as possible. Complete the applications at the same time. This will ensure that a denial of coverage from one company does not impact your ability to obtain coverage from others.
The underwriting process takes time and requires work by you. Make sure to fill out all the forms and get laboratory testing completed promptly.
We recommend that you also apply for group policies offered by at least one medical association. You will have to do this independently of your broker. Compare the coverage and premium prices to those of individual plans you are offered.
- Work with your broker to compare policies and get the best price for your needs
When underwriting is complete, your broker will present you with options, ideally from several companies. There will be options to modify the plan to optimize the benefits and price.
We believe the benefit amount and the definition of disability are the two most important aspects of a plan. Try to get as much coverage as you need (as determined above). If you are getting a policy during residency, the benefit likely be less than you ultimately need. If so, make sure there is a “future increase” provision. This will allow you to purchase a larger policy when your salary is higher, without undergoing additional medical testing.
We strongly recommend obtaining a policy with an “own occupation” disability definition. This is particularly important for physicians in procedural specialties.
If purchasing an individual plan, make sure it is guaranteed renewable. Nearly all physicians also obtain policies that are also non-cancellable.
You can decrease the premium by extending the elimination period (for example, from 3 months to 9 or 12 months). There will be many other optional provisions (referred to as “riders”) that you may not need. Eliminating them will decrease the cost of the premium, though we recommend discussing them with your broker or financial advisor to determine their value to you. Common riders are discussed in the appendix.
- After you select a policy, setup autopay for your premiums.
If you fail to make your premium payments, you will lose your policy. Physicians make a surprising number of financial mistakes due to lack of time and fatigue. The best way to prevent this is through autopay.
You will likely get discounts by paying for your premiums on a quarterly or annual basis.
- Review your insurance needs on a period basis.
Your financial needs will evolve as your career progresses. After you finish training, for example, you will change employers and your income will increase significantly. This is a good time to get additional coverage, if needed.
Any time you change jobs, you should evaluate the impact on your employer-sponsored benefits. Significant changes may impact your individual insurance policy needs.
Over time, your disability insurance needs should decrease as you pay off debts and accumulate assets. Performing a periodic needs assessment will help you cancel coverage you no longer need, potentially saving you thousands of dollars in premiums per year.
Appendix: Additional Terms and Riders
Partial Disability
A partial disability benefit (also called residual disability benefit) provides income replacement if you experience a disability which reduces, but does not eliminate, your ability to work. The benefit will typically be proportional to the fraction of work lost. For example, if you suffer an injury and can only work 50% as much as prior to the injury, you would be entitled to 50% of your disability benefit.
Exclusions
Disability policies include a list of exclusions, which are situations in which the insurance company is not required to pay benefits even if you meet the definition of the disability. Common exclusions include self-inflicted injuries, injuries related to wars or hazardous activities, and disabilities related to pre-existing conditions.
The best time to buy disability insurance is when you are in good health. If you wait until you have a health concern, it will be discovered during the medical underwriting process. Pre-existing (and related) conditions will likely be excluded under any policies available to you or you may be denied coverage entirely.
Guaranteed Renewable
With a guaranteed renewable policy, the insurance company cannot cancel your policy or reduce your benefits as long as you pay premiums, but it can change your premium. Premium changes must be made at the plan level, not the individual level. In other words, the company cannot single out your policy and increase your premium due to a change in your risk or health. However, they can increase the premiums on all policyholders as a group.
Non-Cancellable
If a policy is non-cancellable, the insurance company cannot cancel the policy, reduce the benefits, or increase the premiums as long as you pay the premiums. This is a better level of coverage than guaranteed renewable only. Non-cancellability may be added to a guaranteed renewable plan as a rider.
Future Increase
A future increase rider allows the policyholder to increase their benefit without the need for new medical underwriting.
This rider is particularly valuable for young physicians with low income and limited disposable income. For example, as resident you can apply for a plan with a low benefit, taking advantage of and good health and resident discounts to get favorable rate on the initial benefit. When you finish residency, you can use the future increase rider to purchase a significant increase in your benefit without undergoing additional medical underwriting. The premium will increase, based on your age at the time of the increase and the amount of the additional benefit.
Automatic Increase
This provision increases the benefit initially set forth in the policy (e.g., by 4% per year), but also results in an increase in the premium. Automatic increases can be refused by the policyholder.
Presumptive Disability
For certain conditions, the waiting period is waived under a presumptive disability feature. Examples include total and permanent loss of speech, hearing, sight, use of both hands, both feet, or one hand and one foot.
Catastrophic Disability
This rider provides additional benefits if the policyholder becomes totally disabled and is unable to perform at least two activities of daily living or suffers a complete loss of speech, hearing, or use of hands/feet.
In this case, it is expected that the policyholder would both suffer a loss of income and incur additional expenses resulting from the catastrophic disability. The additional benefit is intended to help cover these expenses.
Cost of Living Adjustment (COLA)
This rider provides inflation protection by increasing the monthly benefit after you have been disabled for 12-months. The adjustment is often indexed to inflation but capped, for example at 3% or less.
Advisors are split on the value of COLA riders. Some recommend that young physicians purchase COLA riders, since inflation could significantly reduce the value of disability benefits following a prolonged (multi-year) disability. Others believe the high cost of COLA riders are rarely worth it.
Family Care Benefit
A family care benefit rider provides you with benefits if you experience a loss of income due to time spent caring for a family member (spouse, domestic partner, child) with a serious injury or illness.
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