Story at-a-glance
- Your practice is your income engine. If you can’t work, both personal and business cash flow stop.
- Individual disability coverage protects your personal paycheck.
- Business Overhead Expense insurance keeps rent, staff, and bills paid while you recover.
- Buy-Sell and Loan Protection safeguard your partners and debt.
- Review coverage yearly. As income and expenses grow, update benefits to match.
Running your own practice isn’t just a job — it’s your livelihood, your reputation, and your investment. You’ve worked hard to build it.
But what happens if an illness or injury keeps you from working?
For self-employed doctors, a disability doesn’t just stop personal income — it can also stop business income. That means rent, payroll, and loan payments don’t get paid… even if patients stop coming through the door. That’s why practice owners need a different level of protection — one that covers you, your income, and your business.
Let’s break down the four key types of disability coverage every self-employed physician or dentist should know.
1. Individual Disability Insurance — Protect Your Income
This is the foundation of every plan.
Individual disability insurance replaces a portion of your personal income if you get sick or injured and can’t work.
For doctors, this is called own-occupation coverage. It pays full benefits if you can’t perform the duties of your specific medical specialty — even if you could technically work somewhere else.
Example:
If you’re an oral surgeon who develops tremors and can’t perform surgery, your policy still pays full benefits, even if you decide to teach or consult.
How much coverage should you have?
- Most physicians insure 60–70% of their income.
- You can choose a monthly benefit up to $20,000 (or more with certain carriers).
- Add a Future Increase Option so you can raise coverage as your practice grows.
Key takeaway: This policy protects you personally — your paycheck, your mortgage, your family.
2. Business Overhead Expense (BOE) Insurance — Keep the Lights On
If you can’t work, your practice still has bills.
Rent. Staff salaries. Utilities. Equipment leases. Malpractice premiums.
Business Overhead Expense insurance pays those ongoing expenses while you’re disabled, so your practice doesn’t collapse before you recover.
How It Works:
- You choose a monthly benefit that matches your average overhead (typically $10,000–$50,000/month).
- It pays for fixed expenses for up to 12–24 months.
- You can use the money to keep staff paid, maintain your patient base, and avoid draining personal savings.
Example:
Dr. Lopez, a dentist, had a back injury that kept her out for 10 months. Her BOE policy paid $25,000 per month — enough to keep her hygienists and office manager employed. When she returned, her patients — and her business — were still there.
Key takeaway: BOE keeps your business alive while you focus on getting better.
3. Disability Buy-Sell Insurance — Protect Your Partnership
If you co-own your practice with another physician or dentist, this one is critical.
What happens if one partner becomes permanently disabled and can’t return?
Without a plan, the healthy partner may have to:
Buy out the disabled partner’s share with personal savings, or
End up running the business with a silent, non-working partner.
Disability Buy-Sell insurance solves that problem.
How It Works:
- The policy funds a buyout agreement if one partner is totally disabled for a set period (usually 12 months).
- It pays a lump sum to purchase the disabled partner’s ownership interest.
- The healthy partner keeps control of the business, and the disabled partner receives fair value for their share.
Example:
Dr. Chen and Dr. Miller, co-owners of a two-dentist practice, each purchased a $1 million buy-sell policy. When Dr. Miller developed multiple sclerosis and couldn’t return to work, the policy funded Dr. Chen’s buyout — no loans, no financial strain.
Key takeaway: Buy-sell coverage protects both partners — financially and emotionally — during tough transitions.
4. Disability Loan Protection — Safeguard Your Business Debt
Many doctors borrow to start or expand their practice.
If you’re paying off equipment, build-out, or acquisition loans, a disability could leave you personally responsible for those payments — even if the practice stops earning revenue.
Disability Loan Protection insurance steps in to cover those loan payments if you’re unable to work.
How It Works:
- The insurer pays your monthly loan obligations for a set period (usually up to 5 years).
- It keeps your credit intact and prevents the lender from seizing business assets.
- Can be added as a rider to some BOE policies or purchased separately.
Example:
Dr. Ahmed borrowed $500,000 to open his medical practice. After a car accident left him unable to work for a year, his loan protection coverage paid his bank loan each month — avoiding default and protecting his credit.
Key takeaway: Loan protection keeps debt from becoming a disaster.
How These Policies Work Together
Each policy covers a different piece of your financial picture:
| Coverage Type | Protects | Benefit Type | Typical Duration |
|---|---|---|---|
| Individual Disability | Your personal income | Monthly income | To age 65+ |
| Business Overhead Expense | Practice expenses | Monthly reimbursements | 12–24 months |
| Buy-Sell Disability | Ownership interests | Lump sum | After 12 months of total disability |
| Disability Loan Protection | Business debt | Monthly loan payments | Up to 60 months |
When combined, these create a complete safety net for your business and your family.
Why You Should Review Coverage Each Year
As your practice grows, your expenses, income, and debt levels change.
At least once a year, review:
- Your monthly overhead
- Your outstanding loans
- Your ownership agreements
- Your personal coverage
Adjusting your benefits now ensures you’re fully protected if life takes an unexpected turn.
The Bottom Line
If you’re self-employed, your practice is more than just a workplace — it’s your financial engine.
Disability insurance protects that engine from breaking down.
Without it, a single illness or injury could threaten your income, your staff, and your legacy.
With the right coverage, you can recover with confidence — knowing your practice, patients, and family are all taken care of.
Next Step: Protect Your Practice and Your Income
Our team specializes in helping physicians and dentists design complete protection plans — including personal disability, business overhead, buy-sell, and loan protection coverage.
Ready to protect your future?
Get a personalized side-by-side policy comparison of the leading disability insurance companies from an independent insurance broker.
