A Physician’s $12 Million Mistake

The average physician can expect to make $12 million in their career or more. Not planning for an injury or illness could be an expensive mistake.


Doctors make a pretty good living, but not without incredible sacrifice.

The average length of time a doctor spends in school and training is more than 12 years and the average cost of medical school has now surpassed $150,000 and oftentimes students loans can exceed $300,000.  The investment of both time and money to become a physician will hopefully pay dividends on the back end with a sizable paycheck.  

Depending on the medical specialty, a physician’s salary can range from $150,000 to a $1,000,000 depending on the specialty and scope of practice.  If the average physician makes around roughly $200,000 a year, then a physician could reasonably expect to make more than $12,000,000 over the course of their career assuming modest pay increases.  


Physicians put off getting a real paycheck for years so they can complete their training.  The opportunity cost of not saving and taking advantage of compounding interest earlier in life like the typical bachelorate degree holder, is the promise of a much larger paycheck the rest of their career post training.  However, if an injury or illness prevents them from continuing to practice then that decision to become a physician turns out to be a terrible idea and they’ll lose out on a $12 million opportunity.  An injury or illness that prevents you from working is called a Disability.

So how does a physician prevent themselves from making a $12 million mistake?  Wrapping themselves in bubble wrap like the kid from the movie Little Giants is a thought… but not a very good one; 90% of disabilities are NOT related to injury.  The top three types of disabling conditions are musculoskeletal connective tissue disorders, mental/nervous disorders, and cancers.  

So how does a Physician protect their $12 million “asset in waiting”?  The answer is quite simple… Disability Insurance.

Click Here to request a detailed comparison of Disability Insurance quotes for your medical specialty.

There are four basic types of disability insurance a physician has access to:

  1. Governmental/Social Programs
  2. Employer Provided Benefits
  3. Association Group Programs
  4. Individually Owned Insurance

Click Here to read an in depth analysis of each program.

In most cases, a W-2 employee will have access to at least 2 of these options with no purchase necessary.  

Governmental or Social programs such as Social Security Disability Income are automatically available to those who have contributed to the Social Security system.  The problem with this program is that it is incredibly difficult to qualify for benefits and the average payment is around $1,200 a month (typically not to exceed $2,100).  

Employer Provided Benefit plans (also known as Group Long-term Disability Insurance) is provide to employees of larger healthcare systems.  These benefits are usually paid for by the employer making any benefits payable during a claim taxable.  GLTD plans will cover everyone at the employer regardless of age, gender, occupation or health situation.  To accommodate the increased risk of the uninsurable and higher risk individuals, the definitions within the contract will be highly restrictive and benefits will often be offset by other sources of income (such as Social Security Disability should the person qualify).  These type of plans will generally cover only 60% of income and will cap the amount of benefit a physician can receive as well.

If a physician is a member of an association, they may have a group policy available to members where a disability insurance certificate can be purchased at a discount.  These plans may or may not cover everyone depending on their health (insurability) and often have restrictive language in the contract to accommodate lower costs to members to encourage larger participation.  

Individually Owned Disability Insurance (IDI) is usually purchased through an insurance agent or financial advisor.  It can be more difficult to qualify for if significant health issues exist, but the definitions with in the contract are generally better and will pay out more income benefits in more situations than the other options above.  The benefit of an IDI policy is that it is portable (GLTD plans stay with the employer).  The policy is considered to be a “unilateral contract” so the insurance company cannot change the features or pricing on the insured (the other programs have very few guarantees like this).  

In many instances, physicians will supplement an employer plan with an individual policy to insure as much of their income as possible.  Having only the employer provided plan can leave a major gap in income should a disability actually occur.