Disability Coverage Gaps: Which Types of Doctors Have the Most to Lose?

James Crook
knee doctor - coverage gaps

Dr. Williams has just completed medical school and is now ready to begin his residency. He knows that while he has achieved his dream, there could come a time when injury or illness may leave him unable to practice medicine. To hedge against this possibility, he purchases an individual disability insurance (IDI) policy.

As Dr. Williams progresses in his career, he gains respect and experience, and the demand for his services increases. Because of this, he now earns more money than when he began.

While his IDI protected 60% of his income right out of medical school, he now has a severe coverage gap. His income has grown, and his coverage is now inadequate. If he were to experience a disability that forced him to stop practicing medicine, his original IDI coverage would provide only 20% income replacement.

Dr. Williams doesn’t realize that he is in this predicament and that if he became disabled, he would likely face severe financial hardship.

While nearly every doctor would benefit from additional disability coverage, some are more likely to develop a disability coverage gap than others. Several factors determine which doctors are most likely to have significant coverage gaps. These include:

  • Medical specialty
  • Whether or not the insured is self-employed
  • The state where the insured practices medicine

Disability insurance brokers should pay attention to these factors as they routinely review their clients’ opportunities to increase their coverage limits or, if necessary, purchase separate additional coverage to meet current gaps.

Medical Specialty

According to Medscape’s 2021 physician salary report, the average salary for a plastic surgeon in 2020 was $526,000, while the average salary for a pediatrician was only $221,000. Doctors in different specialties earn different levels of compensation. The higher the pay, the more pronounced the coverage gap is likely to be.

There are also many additional hazards inherent in different healthcare specialties. The National Institutes of Health notes a higher risk of workplace accidents and injuries for surgeons. Some of the more notable of which could be “injuries to their arm, back or legs,” or contracting HIV, Hepatitis B, and Hepatitis C infections “due to the exposure to blood, body fluid or tissue specimens.”

The risk of these infections is also high in other specialties with more “frequent blood or needle-stick exposure,” such as obstetricians, gynecologists, and anesthesiologists. As some doctors have a higher risk in the workplace, they should be covered more extensively.


Medscape’s 2021 physician salary report also shows that, on average, a self-employed doctor made $52,000 more in 2020 than a doctor who was not. This could leave the self-employed doctor with a larger disability coverage gap than a physician who is not self-employed.

Self-employed doctors, dentists, and other healthcare professionals often manage business-related expenses that those practicing as employees of larger organizations do not. For these professionals, prudent brokers should also recommend business overhead expense (BOE) riders or stand-alone BOE policies in addition to any supplemental disability insurance. This will ensure proper coverage of extra monthly costs like office rent, staff wages, accounting fees, etc. in the event of a disability.

Practice Location

There are wide variations in potential earnings and the cost of living depending on the state where a doctor practices. For example, an invasive cardiologist living in Mobile, Alabama will earn roughly 13.1% less than an invasive cardiologist living in Minneapolis, Minnesota but will also have a 17.1% lower cost of living.

While an invasive cardiologist on average will earn more in Minneapolis than in Mobile, the invasive cardiologist’s correlated cost of living results in a smaller safety net with a coverage gap. Since a doctor is earning more and spending more in Minneapolis, that doctor is likely to develop a larger coverage gap than the one living in Mobile.

Disability Coverage Gaps – Conclusion

While IDI is the first disability insurance product most doctors purchase to protect their income, it is just the starting point for most. This is particularly true for high earners. While nearly every doctor would benefit from added coverage, those in higher-earning medical specialties, those who are self-employed, and those who live in states with high salaries and high costs of living are at the most risk. Therefore, brokers should prioritize ensuring these clients have the right amount and type of disability insurance to protect their current income.

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