Protect it
Your income is the asset worth protecting first
For a surgeon or interventional specialist, the ability to do one specific job funds everything else. Group coverage rarely protects it as well as people assume.
In one paragraph
Disability planning protects earned income if you cannot work. For physicians it centers on the policy's definition of disability, whether coverage is own-occupation and specialty-specific, how much income is genuinely replaced after tax, and how employer group coverage combines with an individual policy you own.
The problem
The definition matters more than the brochure
A hand injury can end an interventional career while leaving someone fully capable of clinical or administrative work. Whether that counts as a disability depends on wording most people never read.
Own-occupation coverage pays if you cannot perform your own specialty, even if you take other work. Any-occupation coverage may not pay if you are able to work in some other capacity. The difference is enormous for a specialist, and group plans often sit on the less protective side.
Group coverage has two further limits. Benefits are frequently capped at a percentage of base salary, which can miss the bonus and production income that make up much of a physician's pay. And when an employer pays the premium, benefits are generally taxable, so a policy that appears to replace 60% may replace closer to 40% of what you actually take home.
What we actually do
The work, item by item
- 01
Read your existing policies line by line
The definition of disability, whether the policy is specialty-specific, benefit caps, what counts as covered income, and any offsets against other benefits.
- 02
Calculate real replacement after tax
We compare covered income against your total compensation, then adjust for whether benefits would be taxable. The resulting number is usually lower than people expect.
- 03
Layer an individual policy where it makes sense
Coverage you own is portable across employers and typically funded with after-tax dollars, which affects how benefits are treated. It can sit on top of group coverage to close the gap.
- 04
Look at the riders that matter for your stage
Provisions addressing future increases, residual or partial disability, and inflation adjustment tend to matter most for physicians early in a high-earning career.
- 05
Revisit after every income change
Coverage sized to a fellowship salary protects almost nothing once you are established. This is the most common gap we see.
- 06
Consider long-term care alongside it
Disability protects your working years; long-term care addresses a later exposure, and it is often the risk that reaches your children's finances. Both belong in the same conversation.
An example
Covered, until you read the definition
A surgeon has group long-term disability through the hospital: sixty percent of base salary, which sounds close to adequate until two details surface. It excludes the bonus and call pay that make up a third of what she earns. And it pays only if she cannot work in any occupation her training suits, rather than if she can no longer operate.
A hand injury that ends surgery but leaves her able to consult may produce no benefit at all under that definition. The policy is real. What it leaves uncovered is the difference between the career she trained for and one she could technically perform.
So we look at whether an own-occupation definition is available to her individually, what the group plan actually counts as income, whether benefits arrive taxable or tax-free given who pays the premium, and how much of the gap is worth insuring rather than absorbing.
A composite illustration, not a specific client. Your situation and results will differ.
Straight answers
Disability planning: common questions
An own-occupation policy pays benefits if you cannot perform the material duties of your own occupation, even if you are able to earn income doing something else. For a specialist this is the critical distinction: a policy defined around any occupation may not pay if you can still work in a different capacity, which is a realistic outcome after many injuries.
Often not, for three reasons. Group definitions of disability tend to be less protective than individual own-occupation coverage. Benefits are commonly capped and calculated on base salary, which can exclude bonus and production income. And when the employer pays the premium, benefits are generally taxable, reducing what you actually receive. Reviewing the policy document is the only way to know.
Generally it depends on who paid the premium. When an employer pays with pre-tax dollars, benefits are typically taxable to you. When you pay premiums personally with after-tax dollars, benefits are generally received tax-free. This is why the headline replacement percentage on a group policy can overstate what would reach your household. Confirm your specific situation with your tax professional.
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This material is for general educational purposes only and is not intended as tax, legal, or investment advice. Neither GGM Wealth Advisors nor Cambridge provides tax or legal advice. Please consult a qualified professional about your specific situation.
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