A 10-minute annual checklist for physicians and dentists: how to pull your policy, compare your benefit to your real income, check your riders, and make updates while you still qualify.
A 10-minute annual checklist for physicians and dentists: how to pull your policy, compare your benefit to your real income, check your riders, and make updates while you still qualify.
Story at a Glance
The start of a new year is the perfect time to check in on your financial protection — especially your disability insurance. Your income changes. Your life changes. And your coverage should change with it. A quick 10-minute review each January can make sure your policy still fits your income, your family, and your goals. Here's a step-by-step guide to walk you through it.
1Find Your Policy and Review the Basics
Start by pulling out your most recent policy summary or in-force illustration. If you bought your policy years ago, this may be sitting in a file or a digital folder from your agent.
Check these basic details:
- Definition of disability
- Monthly benefit amount
- Benefit period (how long benefits would last)
- Waiting period (how long before payments start)
- Riders included (extra features like cost-of-living or future increase options)
Lost your policy documents or changed agents?
This happens more often than you'd think, especially if you bought coverage during residency and have since switched hospitals, states, or advisors. You have three ways to reconstruct your policy details:
- Call the carrier directly. Every major carrier (Guardian, MassMutual, Principal, The Standard, Ameritas) has a policyholder services line that can send a current in-force illustration once they verify your identity and policy number.
- Check your bank or credit card statement for the recurring premium draft — the carrier name and a reference number are usually right there.
- Work with an independent broker who can request a policy audit on your behalf, even if they weren't the agent who originally sold it to you.
These details are the backbone of your coverage. Knowing them helps you see if your protection still matches your life.
2Compare Your Coverage to Your Current Income
Disability insurance is designed to replace a portion of your income — typically 60–70%. But many doctors buy coverage early in their careers and never update it. As income grows, the benefit stays the same — leaving a big gap.
Example: You bought a $6,000/month policy as a resident. Now you're earning $300,000 a year. That policy only replaces about 24% of your income. If you were disabled tomorrow, that shortfall would hit hard.
Calculating your real replacement ratio with side income
If your income is only W-2 base salary, the math is simple: monthly benefit ÷ monthly gross income. But most physicians and dentists have more moving parts — call pay, 1099 locum work, RVU bonuses, or a side practice. Most individual disability policies are underwritten against your earned income at the time of application, which usually includes bonuses and 1099 income if you can document it with tax returns. Here's how to build an accurate ratio:
| Income Source | How to Count It | Include in Ratio? |
|---|---|---|
| W-2 base salary | Prior year gross, from paystub or W-2 | Yes, always |
| RVU or productivity bonus | Average of last 2 years, from tax return | Yes, if consistent |
| 1099 locum / moonlighting | Schedule C net income, 2-year average | Yes, most carriers count it |
| Side practice ownership income | K-1 or Schedule C distributions | Often, case by case |
| Investment or passive income | Not tied to your ability to work | No |
What to Do:
- Add up your last two years of tax returns, isolating income that stops if you can't work.
- Compare your current monthly benefit to that total, divided by 12.
- If the percentage is under 60%, it's time to explore a benefit increase.
3Check Your Riders and Options
The riders on your policy determine how flexible and powerful your coverage is. Here's what to look for:
Future Increase Rider (or Benefit Purchase Option): lets you increase your monthly benefit as your income grows — no new medical exam, though carriers still verify income at each exercise.
Residual (Partial) Disability Rider: pays benefits if you can still work part-time but lose part of your income due to illness or injury.
Cost of Living Adjustment (COLA) Rider: increases your benefit each year during a long-term claim to keep up with inflation.
If you're missing one or more of these, talk to your advisor about adding them. The cost is often small compared to the long-term value.
How the Future Increase Rider works by carrier
Every major carrier offers some version of a future-increase rider, but the exercise windows, dollar caps, and income-verification rules differ. This is worth knowing before your January review so you're not surprised at the exercise date.
| Carrier | Rider Name | General Structure |
|---|---|---|
| Guardian | Future Increase Option (FIO) | Scheduled option dates plus income-triggered windows; income verification required at each exercise |
| MassMutual | Guaranteed Insurability Option | Set option ages/dates with defined maximum increase amounts per exercise |
| Principal | Future Benefit Increase Rider | Periodic option dates; also offers an automatic increase rider tied to a cost-of-living index |
| The Standard | Automatic Increase Benefit / Future Increase Option | Automatic annual increase in early policy years, plus optional future increase windows |
| Ameritas | Future Insurability Option | Defined option dates tied to income growth, subject to a maximum policy benefit cap |
Exact caps, windows, and income documentation requirements vary by policy form and issue state, so confirm the specific language in your contract or ask your advisor to pull it during your review.
4Review Your Employer Coverage (If You Have One)
If you have disability insurance through your employer, it's worth a closer look. Most employer plans:
- Cover only 60% of base salary (not bonuses or side income)
- Are taxable if the employer pays the premium
- Use an "any-occupation" definition
- End when you leave that job
That's why a private, own-occupation policy is so important — it goes with you no matter where you work.
Example: Dr. Alvarez relied on her hospital's group plan. When she switched hospitals, she discovered she had zero coverage for 3 months — a risk she never realized she was taking.
Ready to protect your future?
Get a personalized side-by-side policy comparison of the leading disability insurance companies from an independent insurance broker.
5Check Your Premium and Renewal Status
Confirm your policy is non-cancelable and guaranteed renewable. That means the insurance company can't change your rates or cancel your policy as long as you pay on time.
Also, check how your premiums are structured:
- Level premium: stays the same for life.
- Graded premium: starts lower and increases over time.
If your income has grown, now may be a good time to switch to a level premium policy that locks in a fixed rate for the long term.
6Make Updates While You're Healthy
Here's the most important part of your January review: you can only make changes while you're healthy. Once you develop a medical issue — even a mild one — your ability to increase coverage or add riders can be limited or denied. That's why January is the best time to act — before another busy year begins. It's like your annual physical for your financial health.
What if you're already underinsured and now have a health condition?
This is one of the most common situations we help physicians work through, and it's not hopeless. A new diagnosis doesn't automatically shut every door:
- Use your existing Future Increase Rider if you have one — most riders let you exercise a scheduled increase without new medical underwriting, even with a new condition, as long as you act within the option window.
- Ask about a carve-out or exclusion rider instead of an outright decline. Several carriers will offer coverage that excludes only the specific condition, leaving the rest of your income protected.
- Shop multiple carriers. Underwriting appetite for the same condition varies significantly by carrier — a condition that gets rated up at one company may be offered standard, or close to it, at another.
- Don't wait for it to get worse. Every year without acting is a year of underwriting risk that only grows.
7Ask for a Policy Review
You don't have to figure it all out alone. A quick 10–15 minute review with a licensed advisor can confirm if you're fully protected or if there are gaps.
Your advisor can help you:
- Compare your policy to your current income
- Explain your riders and options
- Request increase offers from your carrier
- Explore discounts if you've changed employers or hospitals
Two easy items people forget every year
State Rules and Tax Notes on Benefit Increases
A few things worth knowing before you request a benefit increase:
- Taxation follows who paid the premium. If you personally pay premiums with after-tax dollars on an individual policy, your benefits are received income-tax-free. If your employer pays the premium (common with group LTD), benefits are generally taxable as income. Increasing an individually owned, personally paid policy doesn't change this treatment.
- State insurance filings can limit rider availability. Not every rider is approved in every state — California, New York, and Florida in particular sometimes have different filed versions of a carrier's contract. If you've moved since your policy was issued, your available options may differ from what's shown in national marketing materials.
- State premium tax is built into your quote already and isn't something you need to track separately — but it is one reason identical coverage can price differently across states.
None of this should be a reason to delay a review — it's simply useful context so your advisor can flag anything state-specific during your January check-in.
The Bottom Line
Your disability insurance is one of the most important financial tools you own — but it only works if it keeps up with your life. Every January, take a few minutes to make sure your coverage still fits your income, your career, and your family's needs. It's a simple habit that can save you from major stress down the road.
Frequently Asked Questions
Your income and life change over time. A quick January check helps make sure your benefit amount, riders, and terms still match your needs. It keeps your coverage strong and up to date, and January is typically the calmest point in the year to act before another busy stretch begins.
Look at your definition of disability, your monthly benefit, your waiting period, your benefit period, and any riders you have. These basics show if your coverage still fits your income and family needs.
Call the carrier's policyholder services line directly with your name and date of birth — they can verify your identity and send a current in-force illustration. You can also check a bank or credit card statement for the recurring premium draft, which usually shows the carrier name and a reference number, or ask an independent broker to request a policy audit on your behalf even if they didn't originally sell you the policy.
Most doctors need coverage that replaces about 60% to 70% of income. Compare your monthly benefit to your current pay, including consistent bonuses or 1099 income documented on your tax returns. If the number is much lower than 60%, it may be time to raise your benefit.
No. Most carriers will count consistent RVU bonuses and 1099 locum income if you can document a two-year average from tax returns, but the specific rules, documentation requirements, and maximum increase caps vary by carrier and by which future-increase rider is on your policy. Confirm the details with your advisor before assuming a specific income source will count.
Look at your future increase option, residual or partial disability rider, and cost of living adjustment rider. These riders help your policy grow with your income and protect you during long claims.
Yes. Most work plans cover only base pay, may be taxable, and often end when you change jobs. A private own-occupation policy stays with you and covers more of your real income.
Start with any Future Increase Rider already on your policy — many can be exercised without new medical underwriting if you're within the option window. If you need new coverage, ask about carve-out or exclusion riders that protect the rest of your income while excluding only the specific condition, and shop multiple carriers since underwriting appetite for the same diagnosis varies. An independent broker can informally check appetite across carriers before you file a formal application.
Tax treatment is based on who pays the premium, not the benefit amount. If you personally pay premiums with after-tax dollars on an individually owned policy, benefits are received income-tax-free — increasing that coverage doesn't change the treatment. If your employer pays the premium, benefits are generally taxable as income.
An advisor can compare your benefit to your current income, explain your riders, request increase offers, and check for discounts. It is a fast way to see if you have any gaps, and to confirm your beneficiary and contact information are current with the carrier.
Next Step: Get a Free Policy Review
Not sure if your coverage is still enough? We'll help you review your current policy, explain your increase options, and compare quotes from the top physician-specialized insurers. Start the year with confidence — knowing your income is fully protected, no matter what the year brings.
Ready to protect your future?
Get a personalized side-by-side policy comparison of the leading disability insurance companies from an independent insurance broker.