What Doctors Need to Know About Social Security Benefits and Disability Insurance

It’s important to assess your insurance needs to ensure you aren’t left financially strapped should a catastrophe happen. Even if your employer provides disability insurance, is it enough to cover your living expenses and health care? How long will it protect you? What about Social Security disability benefits? Will they come to your rescue?

These are all valid questions to consider.

Disability insurance is a complicated insurance product. But it is imperative for you as a physician to have adequate disability coverage.

To get a better understanding of this topic, we’ve compiled this comprehensive guide.

Types of Policies

When it comes to disability insurance, there are a few different policy options. These three types are the main ones that we will be focusing on in this article.

Social Security Disability Benefits

The Social Security Disability Insurance program, or SSDI, gets applied for through the Social Security Administration.

You pay SSDI through the social security taxes you’ve been contributing to every year that you’ve had a work history. When you get a paycheck, you can see the FICA taxes that were deducted from your pay on the itemized pay stub. Of the two taxes paid, one went to an account that the government uses to fund any disability claims from those that are eligible.

The Social Security Administration has a strict definition of disability. In the SSA’s definition, there is no gray area. You must be incapable of SGA (substantial gainful activity) to be eligible for social security disability benefits. That means you must be unable to perform not only your previous job as a physician but any job for a period of at least a year.

Elimination Period

The elimination period is much longer than other disability insurance. Social Security disability benefits only take effect after five months from the time they deem you disabled. Cases that fall under Compassionate Allowances, such as some cancers or mental impairments, may process faster.

However, while earned income limits what disabled workers can collect in SSDI benefits, there is no limitation on unearned income or income brought into the household by family members. Personal assets and investments do not impede SSDI recipients.

Persons on SSDI also qualify for Medicare after 24 months.

Also, note that SSDI is not the same as Supplemental Security Income (SSI), which is also offered through the SSA.

SSI has an income cap. As a doctor, you would not be eligible for SSI as a disability program. You will, however, qualify when you reach retirement age. Even high-income earners and other wealthy Americans collect SSI benefits in addition to their other retirement benefits.


Group insurance policies are usually provided by an employer or purchased through a professional association if you’re a member.

These policies are usually cheaper because the insurance company splits the risk between all the physicians enrolled in the group policy.

It’s great to have these policies in place, but they usually have some major drawbacks in the way of coverage. Besides these drawbacks, group policies only cover you while you are with the employer providing the policy to you.

What do you do when you are between placements?

The answer is to purchase an individual disability insurance policy.


An individual policy is not given through your employer but rather facilitated through an agent or broker. You can shop around for a policy and purchase the one you decide offers the best coverage at the best price.

These policies usually cover around 60% of your total gross income. They also offer more options for you to tailor your plan to your needs.

The most reliable way to find a good policy is to get quotes from the Big 6 disability insurance companies.

Then compare and contrast their quotes to choose the one that best fits your needs.

This article focuses on how much better it is to have individual disability insurance than any other disability insurance because it gives you more control over how much coverage you have.

Physician’s Thrive can help you with free disability quotes from the Big Six and other reputable providers.

How to Buy Disability Insurance Wisely

How to buy disability insurance for doctors
Buying disability insurance isn’t like purchasing a new vehicle. This policy could mean the difference between financial ruin and financial survival.

Use an independent agent — they are more likely to find you the best policy. They aren’t connected to one company and won’t push any certain policy on you.

No matter which policy you buy, they are paid by the insurance company. They make money by ensuring that the policyholder is happy with their insurance and will do what it takes to make sure you are. The compensation package for an independent broker may be more favorable for you. Independent brokers normally don’t have special perks and incentives that can cause a bias compared to a captive agent who may have a pension plan.

As mentioned above, you should get a quote from the Big 6 and compare quotes to find your perfect fit.

The Standard, Guardian, Principal, Ameritas, Ohio National, and MassMutual all have their own formula to follow when offering individual disability insurance policies. They may end up being very similar, but some might be more willing to make competitive adjustments than others.


Don’t be afraid to ask to see if you qualify for a discount. Physicians will often get discounts depending on who their employer is or which professional associations they belong to.

Often you can get a discount if you pay the cost of your policy with one annual lump payment instead of through monthly payments.

It’s also smart to start smaller when you are just beginning your residency. You will have less income and more medical school bills, so you won’t be able to afford as much insurance as you would like.

However, the chances of being disabled before you retire are still high, so it’s best to upgrade your policy as your professional life upgrades, and you can afford more.

Getting Older

As you get close to your sixties, you may wonder how much longer you need your disability insurance policy and if it’s even worth paying for at this point. Most policies stop when you turn 65 anyway.

Other than getting older, the only additional time that canceling your policy is at all advised is if you become completely financially independent and could support yourself even if disabled.

Related: Provider Reviews – Northwestern Disability Insurance

How to Choose the Right Policy

After you have your quotes in hand, how do you decide which is the best for you and what should you barter for?

There are a few areas to keep top of mind.

Definition of Disability

The biggest factor of an individual disability insurance policy that holds weight on the value of your policy is how it defines disability. The optimal definition of disability is that which encompasses the broadest of terms.

The more limited the definition, the harder it will be for you to receive disability benefits should any tragedy befall you.

The most common difference in disability definitions is when it comes to your ability to earn an income in another occupation.

When your disability covers “true own occupation”, this means that if your disability makes you unable to complete the occupation that you were working at the time of the accident, you will receive benefits. This is the highest sought after definition of disability.


Some policies offer “own occupation, not working.” These policies cover you if your disability makes you unable to complete the occupation that you were working at the time of the accident, but you are potentially able to hold another job. You cannot, however, take any other job to be covered.

A policy with an “any occupation” disability definition will only provide you with monthly benefits if your disability makes you unable to perform any job, not just the job you held when you became disabled.

Some policies include a presumptive total disability clause. This clause waives the need for a doctor’s proof of disability in the event of certain drastic physical limitations. Examples include total blindness, deafness, or the loss of more than one limb.

You will want to check to see if their disability includes mental illness such as stress, depression, anxiety, and substance abuse. This differs from company to company, but many offer this addition as a rider.

Learn more about true own-occupation insurance in our Own-Occupation Disability Insurance Guide.


You will also want to be completely aware of all the exclusions on the policy.

Any pre-existing medical condition that you had before purchasing the policy that might render you disabled will not be covered with your individual disability insurance.

Many companies exclude mental disabilities from coverage. You can purchase a rider or barter to include mental or psychological disability in your policy, but you will have to pay more.

  • Maternity from a regular pregnancy is never considered eligible for a disability claim.
  • If you engage in risky hobbies on a regular basis, you may not be eligible for disability insurance benefits.
  • If your disability is due to the fact that you are active military, or is from an act of war, this will likely not be covered by disability insurance.

Elimination Period

The disability insurance elimination period is how long before your policy takes effect after you’ve been disabled. This time is typically either 60, 90, 180 days before you start receiving disability payments. You can choose to make your elimination period shorter by paying a higher premium.

The opposite can also be true; the longer the waiting period, the cheaper the policy.

Riders Worth the Money

Disability insurance riders
There are often many different options that you can choose to add to your policy for an added fee.

Which of these might be worth shelling out some extra money for?

We consider these four to be prime options.

Residual Disability 

A residual disability rider will partially cover your disability if you’ve been disabled to the point that it affects your ability to perform a fraction of your duties at your occupation.

When your disability doesn’t meet the definition of total disability, but you can’t work full time, this rider will allow you to work part-time and collect some of your benefits to make up for the lost income.

Future Purchase Option

If you’ve purchased a smaller policy at the beginning of residency with hopes of being able to afford more in the future, this rider allows you to increase the value of your policy as your income increases.

This can be worth the money if you consider your potential income to make a good increase in the years to come.

Related: Why Every Physician Should Have an FIO Rider in their Disability Policy

Non-Cancelable and Guaranteed Renewable Rider

This really shouldn’t be a rider and they actually sometimes include this in the policy language. However, if you don’t see it in plain English, you may request that they add it.

If they reply that this can be purchased as a rider, purchase the rider or look for a policy that has this written in.

You don’t want to be canceled from your insurance without warning or denied renewal when you need it most.

Catastrophic Coverage

This rider will help offset some of the medical costs of catastrophic disability. For example, this rider pays for the cost of a CNA if you can no longer care for yourself because you’ve become so drastically disabled.

How Much Will My Policy Cost Me?

Many different factors come into play when a company decides how to calculate your quote. They consider several demographics to assess how much of a risk you pose of needing coverage in the future.

Your cost is dependent on age. The younger you are, the cheaper your policy will be.

Your cost is also dependent on health. The healthier you are, the fewer risks there are that you will become disabled. For this reason, a healthier person can get a cheaper policy.

Your cost is also dependent on income. Most disability insurance policies cover 50-70% of your gross income when you become disabled. The higher your income, the more expensive your policy will be.

Most physicians pay 2-5% of their income to protect themselves at 60-70%. When you do the math, it makes sense to pay that small percentage to protect themselves at such a high level.

Lastly, your cost will depend on the risk of use due to the occupation you have. The occupation of an ER doctor will be riskier than that of a pediatric doctor.

Do You Really Need Extra Disability Insurance?

When it comes to deciding whether you need to purchase extra disability insurance on top of the group and social security disability benefits, you should ask yourself these questions:

  1. How reliable is the insurance provided by your employer?
  2. How much benefits can you qualify for from Social Security Disability?
  3. What is your cost of living now and in the projected future?
  4. Can you rely solely on your spouse’s income?

If any of the answers to the questions above made you feel uneasy about your financial stability in the case of disability, it is wise to invest in a strong individual policy and not rely on the unreliable.


Disability insurance is an important investment, and even more so for high-income earners like physicians.

This fact should motivate you to be willing to pay for a good policy, considering that your chances of needing it are considerable. You will have better protection with a top-quality individual policy. Don’t rely on Social Security Disability benefits or rock bottom group policies.

Hopefully, you remain healthy and strong. If you do suffer a physical or mental inability to work at your profession, having a robust insurance plan can help you and your family survive such a difficult time.

Start your search for a policy that meets your needs with a free disability insurance quote from Physicians Thrive.

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