Written By Caitlin See
Updated on December 2, 2024
Physicians invest countless years and resources into their medical careers. Yet many overlook protecting their most valuable financial asset — and no, I'm not referring to your house or investment portfolio. I'm talking about your ability to practice medicine. That’s where physician disability insurance comes in.
Consider this: over a 30-year career, a physician earning $250,000 annually will earn approximately $7.5 million. That's an investment worth protecting.
Between managing a busy practice and staying current with medical advances, who has time to decode insurance policies? That's why we've put together this comprehensive yet straightforward guide.
Physician disability insurance premium cost
Physician disability insurance cost is often the first question physicians ask about coverage. Let's break down what you can expect to pay – and why rates vary significantly across medical specialties.
Monthly disability insurance premiums for policies bought in residency typically range from $150 to $350 a month in level premiums, depending on your specialty, gender, and choice of insurance carrier. Here's a quick overview of monthly premium ranges across different specialties:
| Specialty | Average Male Cost | Average Female Cost |
|---|---|---|
| Pediatrician | $140 | $217 |
| Primary Care | $149 | $249 |
| Neurologist | $158 | $246 |
| Cardiologist | $168 | $265 |
| Dermatologist | $172 | $271 |
| Neurosurgeon | $184 | $284 |
| Orthopedic Surgeon | $209 | $329 |
Why such variation in premiums? Several key factors influence disability insurance costs:
- Specialty risk classification: Insurance companies categorize medical specialties based on their claim history and complexity. Lower-risk specialties like pediatrics generally pay less than surgical specialties that require more manual dexterity.
- Gender: Female physicians typically pay more for coverage due to higher historical claim rates, which is likely related to complications of pregnancy. While this might seem unfair, it reflects statistics that insurance companies use to set rates.
- Coverage amount: Most physicians purchase coverage for $10,000 to 15,000 per month in benefits. Your specific amount should align with your income and other financial obligations.
- Policy features: Adding valuable riders like partial disability or cost-of-living adjustments will increase your premium but provide important protection.
Keep in mind that disability insurance is a highly customizable financial product. What’s best for one person won’t necessarily be what’s best for the next. Reach out to an independent insurance broker to discuss your existing coverage and tailor a policy to fit your financial needs.
SLP Insurance works with physicians and medical professionals to connect you with the best own-occupation policy with the top discounts available. If you want a quick quote, fill out the form below. Otherwise, keep reading to see what to look for in a policy and how the best disability insurance companies for physicians stand out.
Get the best price on own occupation disability insurance
SLP Insurance will find you the best price even if it's not with us. Fill out the form below to get discounts of up to 30%.
What disability insurance do physicians need?
Every physician needs specific policy features designed to protect their medical specialty and future earnings potential. Here are the key provisions to look for in your disability coverage:
Own-occupation definition of disability
Long-term disability insurance protects your income if you have a long-term injury or medical condition. But the best disability insurance for physicians needs a true own-occupation definition of disability, which is the strongest income protection for your medical or dental specialty.
You won’t generally find comprehensive coverage through your employer benefits or a professional association group plan. Instead, you’ll need to shop around for an individual disability insurance policy to supplement your existing coverage.
The “Big 5” disability insurance carriers offer individual disability policies with a specialty-specific definition of disability — distinguishing themselves from other companies providing disability and life insurance products.
Future increase riders
Your income will likely grow significantly throughout your career. A future increase option (FIO) lets you boost your coverage without new medical underwriting. This means you can start with lower coverage during residency or early practice and increase it as your income grows.
There is also a benefit increase rider available with most carriers. It’s less flexible in how it can be exercised in exchange for paying no additional premium, but it also allows you to increase coverage without medical underwriting.
Residual disability coverage
Not all disabilities result in a complete inability to work. Residual disability coverage pays partial benefits if you suffer a loss of income due to reduced hours or duties. For instance, if a condition forces you to reduce your patient load by 40%, you'll receive proportional benefits to help offset the income loss.
Cost of living adjustment (COLA)
For long-term disabilities, inflation can significantly erode your benefit's purchasing power. A COLA rider increases your monthly benefit each year, typically by a fixed percentage or linked to the Consumer Price Index for All Urban Consumers (CPI-U).
Best physician disability insurance companies for physicians
Guardian, MassMutual, Ameritas, The Standard and Principal make up the “Big 5”. These disability carriers offer varying levels of own-occupation coverage to fit your needs and a suite of optional policy riders to further enhance your coverage.
Here’s an overview of key details for each carrier offering the best disability insurance for physicians.
| Company | AM Best Rating | BBB rating | Lowest Elimination Period Offered | Maximum Monthly Benefit |
|---|---|---|---|---|
| Guardian | A++ (Superior) | A(Not BBB Accredited) | 30 days | Up to $30,000 |
| MassMutual | A++ (Superior) | A(Not BBB Accredited) | 60 days | Up to $20,000 |
| Ameritas | A (Excellent) | A+(Not BBB Accredited) | 30 days | Up to $20,000 |
| The Standard | A (Excellent) | A+(Not BBB Accredited) | 60 days | Up to $30,000 |
| Principal | A+ (Excellent) | A+(Not BBB Accredited) | 60 days | Up to $30,000 |
Guardian: Best for financial strength ratings
Why we chose it: Guardian consistently receives high marks from financial rating agencies. Its COMDEX ranking (a composite score averaging ratings from agencies such as AM Best, Fitch, Moody’s and S&P) is 100, the highest score available. Physicians will likely be keeping their disability policies for 3 decades, so it matters a lot if the company will still be in business.
Other stand-out features include:
- Enhanced true own-occupation coverage, Guardian’s signature definition of disability for physicians, is the strongest contract language among the Big 5 carriers
- Guaranteed Standard Issue (GSI) policies at many prestigious residency programs. These policies require no medical underwriting.
- Graded premiums which allow physicians to pay much lower premiums in their younger years, like during residency or fellowship
Related: Guardian Disability Insurance Review
MassMutual: Best for Retirement Planning & Mental Benefits
Why we chose it: MassMutual offers a unique rider to their disability policies called RetireGuard. If someone is disabled and not working, they no longer have earned income that they can contribute to a 401k. Most disability plans cut off benefits at age 65, so this rider protects those who are disabled early in their working careers from being dependent on minimal Social Security payments in their golden years.
Other stand-out features include:
- Endorsement option to remove 24-month mental disorder limitation, resulting in a mental health diagnosis being treated the same as any other disability. This limitation is normally per incident instead of over the lifetime of the policy, which is a unique definition among the Big 5.
- Pays dividends to participating policyholders (dividends aren’t guaranteed but have been paid every year since 1869).
- Graded premiums for those who want to save on the front end of their policy compared to level premiums
Related: MassMutual Disability Insurance Review
Ameritas: Best for low premiums
Why we chose it: Ameritas’s medical underwriting guidelines tend to be more forgiving than most, meaning you are less likely to pay a higher premium for having certain medical conditions. They also have many medical specialties in their best risk classification, so their products can be priced pretty aggressively.
Other stand-out features include:
- Has a wide variety of elimination periods available, ranging from 30 days up to 365 and 730 days, depending on the chosen benefit period.
- Offers unique built-in features, such as a $500 benefit advancement to pay for medical treatment expenses and a good health benefit that reduces your waiting period over time.
Related: Ameritas Disability Insurance Review
The Standard: Best for family benefits
Why we chose it: The Standard includes a Family Care Benefit as part of its base policy. This benefit allows you to collect disability income if you have a 20% loss of income and are working at least 20% fewer hours in order to take care of a family member with a serious health condition.
Other stand-out features include:
- Allows a maximum monthly benefit of $30,000 for physicians (e.g., 5P, 4P, 4S, 3P occupation classes).
- Enhanced residual disability rider available that pays no less than 50% of your base monthly benefit for the first 12 months, followed by a payment proportional to your loss of income.
Related: The Standard Disability Insurance Review
Principal: Best for long benefit periods
Why we chose it: Principal offers a wide selection of benefit periods ranging from two years to age 65, 67 and 70.
Other stand-out features include:
- Offers a unique combination of future purchase options that allow a 3% automatic benefit increase each year and unlimited optional increases based on income in the first three years, followed by increases for major milestones, such as marriage or birth of a child, later in the policy.
- Has a maximum issue limit of $30,000 per month for physicians.
- There is no extra fee to pay premiums monthly instead of annually, no other carrier offers this.
Related: Principal Disability Insurance Review
Where can you buy physician disability insurance?
Most physicians have some form of group disability coverage through their hospital or practice. However, that hospital or practice group policy probably won't give you the protection you really need. Most group plans offer basic coverage that falls short in two critical ways: they don't protect your specific medical specialty, and you'll lose the coverage if you change jobs.
To properly protect your income, you'll want your own individual disability policy. Let's look at your main options for buying coverage:
Online comparison shopping sites
These days, you can get instant disability quotes online. Pretty convenient, right? You can walk away with a starting point for comparing rates and features. Just keep in mind that online quotes provide a general picture — you'll want to discuss physician-specific features, available discounts, and any medical considerations with an expert before making your final decision.
American Medical Association (AMA)
The AMA offers group disability insurance to physicians, residents, and medical students at reduced rates. Their plan includes some appealing features:
- Specialty-specific coverage options
- Choice of disability definitions
- Streamlined application process
- Coverage until age 67
- Benefits for both total and partial disability
But there are some important details to consider. For instance, the rates can increase as you age, and available discounts may change over time. Plus, the plan isn't available in all states.
Independent insurance agents
Finally, consider working with an independent disability insurance broker. Ask some of your physician friends for recommendations. If they’re happy with their policy, it might work for you, too.
The goal here is to compare multiple policies from different insurers. Coverages and perks can vary quite a bit, so looking at your options side by side can help you narrow down your choices and pick the best disability coverage for your situation.
Here's a helpful tip: whichever path you choose, check the insurance company's financial strength rating with AM Best. Look for an A- rating or better — this indicates excellent financial stability. Imagine a life insurance company dying before you do. Big problem, right? All the “Big 5” carriers we discussed earlier meet this important benchmark.
Related: Disability Insurance Broker Fees? How to Protect Yourself
Does physician disability insurance cover student loans?
Well, sort of. Most disability insurance policies replace about 60% of your income — and you can use this money for any of your expenses, including student loan payments. But here's the challenge: keeping up with loan payments while maintaining your lifestyle can be difficult on a reduced income. Regular disability benefits might not be enough.
Fortunately, several disability insurance companies offer a student loan rider. It’s available at most of the Big 5 companies (all except Principal). This rider pays a benefit above and beyond your base disability benefit. There are also certain states where this rider is not currently available.
Get help finding disability insurance coverage for your needs
This guide is intended as a starting point for your search versus being a definitive one-size-fits-all “best” scenario. Disability insurance has many layers, to the point of being understandably overwhelming for most policyholders.
Each carrier offers different policy structures, including whether it’s non-cancelable or guaranteed renewable, and many optional riders for additional protection, like a cost-of-living adjustment (COLA), catastrophic disability benefits, student loan protection and more. There’s simply a lot to consider when buying a long-term disability policy.
We encourage you to work with an independent broker who looks at the “Big 5” and explores options for a guaranteed standard issue (GSI) policy through your residency or fellowship program (even if it means not earning a commission).
SLP Insurance does just this. Our team reviews all of your options for the best disability insurance for physicians. You can rest assured that you’re receiving the best pricing based on your policy preferences. Fill out our quote form to get started.
FAQ: Best physician disability insurance companies
Long-term disability insurance provides physicians and other high-income earners with financial security if they become disabled. By choosing a disability insurance policy with a true own-occupation definition of disability, you’ll have the flexibility to be gainfully employed outside of your dental or medical specialty and still receive full benefits for a total disability.
Disability insurance premiums can be tax deductible if you own your own practice and claim it as a business expense, but this makes the benefits taxable if you ever need them. However, disability insurance benefits are tax-free if you pay for an individual policy with post-tax dollars. In contrast, group coverage premiums are generally covered by the employer or paid with pre-tax dollars, therefore, any benefits received are treated as taxable income.
You can expect to pay between 2% to 4% of your annual income for own-occupation disability insurance. However, the cost of disability insurance depends on your age, gender, occupation, medical history, state of residence, and specific policy choices (e.g., benefit period, monthly benefit amount, etc.)
Compare disability insurance quotes and save
SLP Insurance will find you the best price on own occupation coverage, even if it's not with us. Fill out the form below for a quote with up to 30% discounts.
