Story at-a-glance
- Group coverage is often provided by employers and is usually free or low-cost—but comes with limits.
- Individual coverage is bought on your own, stays with you, and offers stronger protection.
- Group policies can be taxed, changes or canceled.
- Most doctors should supplement group coverage with a strong individual policy to fully protect their income.
Two Ways to Protect Your Paycheck
As a physician or dentist, your ability to earn income is your greatest financial asset. That’s why having the right disability insurance matters.
There are two main types of coverage: group and individual. Understanding how they work—and where they fall short—can help you avoid gaps in protection.
Group Disability Coverage: The Basics
Group coverage is typically offered by:
- Hospitals
- Large dental groups
- Universities or medical employers
- Professional associations
This type of policy is often automatic or subsidized, meaning it’s free or very affordable. But there’s a catch: you get what you pay for.
Key Limitations of Group Coverage:
- Not portable – You lose it when you leave your employer.
- Limited benefit amounts – Usually only covers 50%–60% of your income, and may cap at a low max (e.g., $5,000/month).
- Benefit offsets – Your benefit may be reduced if you receive income from Social Security, workers’ comp, or other sources—cutting your payout even further.
- Taxable benefits – If your employer pays the premium, any benefits you receive during a claim are taxable.
- Weak definitions – Group plans don’t offer true own-occupation coverage.
- Can be changed or canceled by the employer or insurer at any time.
Bottom line: Group coverage is a nice safety net, but it’s rarely enough to protect a high-earning medical professional long-term.
Individual Disability Insurance: The Gold Standard
Individual coverage is a private policy you buy for yourself—customized to your needs, your specialty, and your income.
Key Benefits of Individual Policies:
- True own-occupation definitions—so you’re covered if you can’t do your specific occupation
- Tax-free benefits if you pay with after-tax dollars
- Portable—your coverage stays with you, no matter where you work
- Stronger riders like Cost of Living Adjustment (COLA) and Future Purchase Options
- Guaranteed renewability—your coverage can’t be canceled or changed by the insurer as long as you pay your premium
While the cost is higher than group coverage, individual policies give you far more security, flexibility, and long-term value.
Why Most Doctors Need Both
Group coverage is a good start, but it’s not enough. A strong individual policy fills the gaps, locks in better protection, and grows with your career.
Most doctors carry both: group coverage for free or low-cost protection, and individual coverage for full income replacement and long-term peace of mind.
Final Thoughts
Disability insurance isn’t one-size-fits-all. Knowing the difference between group and individual coverage helps you build a stronger safety net—so your income is protected, no matter what happens.
Not sure what you have or what you need? Click the button below to get a personalized quote.
We’ll review your group policy and show you how to supplement it with the right individual 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.
