Lesson 1 · 9 min read

Protect the License

Everything else in this curriculum assumes you can keep practicing. Before loans, before investing, before the first contract, the first job is to make sure an illness or injury cannot take your income with it.

Lesson 1 of 8

Watch

Read it once. Five to ten minutes.

Why this is lesson one

A physician’s single largest asset is not a house or a retirement account. It is the stream of income that a medical license produces over a career, often north of ten million dollars for a specialist. Disability insurance is the only instrument that protects that stream, and the terms you can get are best right now, while you are young, healthy, and in training.

Three things set the price and availability of coverage: your age, your health, and your specialty. Two of the three only move against you from here. A chart note about a back injury, a sleep study, or an anxiety diagnosis at 33 can mean an exclusion, a rated premium, or a decline that was not there at 28.

The definition is the product

Every policy pays when you are disabled. The question is how the contract defines the word. A true own-occupation definition pays the full benefit if you cannot perform the material duties of your own specialty, even if you go on to earn income doing something else. An any-occupation definition pays only if you cannot work at anything you are reasonably suited for. Employer group policies commonly start own-occupation and switch to any-occupation after 24 months.

For a surgeon with a tremor, an anesthesiologist with a needle-stick infection, or an emergency physician with a back injury, the difference between those definitions is the entire benefit.

Group coverage is a floor, not a plan

Keep the group long-term disability plan your program and your future employer provide, and read it. Group benefits are usually capped at a monthly maximum that protects a resident’s salary and not an attending’s, the benefit is taxable when the employer pays the premium, and the coverage stays behind when you change jobs, at exactly the moment a new employer’s underwriting might exclude something. Individual coverage fills each gap, and because you pay the premium with after-tax dollars, the benefit arrives tax-free.

What to buy in training

Most carriers will issue a resident or fellow a monthly benefit of roughly $5,000 to $7,500 regardless of salary. Buy the most you can reasonably afford, and buy the largest future increase option the carrier will attach to it, so the benefit can grow with attending income on financial proof alone, without new medical questions. Ask for a residual (partial disability) rider, a cost-of-living rider, and a non-cancelable, guaranteed-renewable contract.

Ask your program coordinator or GME office whether a guaranteed standard issue program exists. GSI offers issue individual policies without medical underwriting during an enrollment window. For a resident with any medical history, it may be the only route to a strong policy at a standard price, and the window usually does not reopen after graduation.

Two neighbors: life and malpractice

Term life insurance belongs in this lesson only if someone depends on your income: a spouse who would carry the loans, a child, a co-signer. Size it to debts, income replacement, and years of dependence. If no one depends on you yet, skip it for now and revisit when that changes.

Malpractice coverage is your employer’s to buy, but you should know which kind it is. Occurrence policies cover any claim from care delivered while the policy was in force. Claims-made policies cover only claims filed while the policy is active, so leaving requires tail coverage, which can cost one and a half to two times the annual premium. Who pays for tail is a contract question, and it comes back in lesson seven.

Do

Check them off as you go. Your progress saves in this browser.

Find out whether your program has a guaranteed standard issue disability offer, and when the enrollment window closes.
Read your group LTD summary: the monthly cap, whether the benefit is taxable, and when the definition of disability changes.
Run the disability coverage tool with your numbers and write down the individual monthly benefit worth shopping for.
Get one quote for a true own-occupation policy with a future increase option, and note every rider and its monthly cost.
Ask whether your malpractice coverage is occurrence or claims-made, and who would pay for tail if you left.

Teach

You know it when you can explain it.

Explain to a co-intern why a resident should buy disability insurance now instead of waiting for an attending salary, and what the phrase “true own-occupation” means. If you can do it in two minutes without notes, you have this lesson.

Check yourself

A surgeon develops a tremor and starts teaching full time. Under which definition does the policy still pay the full benefit?

True own-occupation. The surgeon cannot perform the material duties of her own specialty, so the benefit is paid in full, even alongside the new teaching income. An any-occupation policy would likely pay nothing.

Your group LTD pays 60 percent of salary with a $10,000 monthly cap and the hospital pays the premium. Why does that protect less than it sounds?

Three reasons: the cap protects a resident’s salary but not an attending’s; the benefit is taxable because the employer paid the premium; and the definition often narrows to any-occupation after 24 months. It also ends when you change jobs.

What does a future increase option let you do?

Raise the monthly benefit as income rises, on financial proof alone, without new medical underwriting. It is what makes a small resident policy valuable later.

Educational content, current as of September 2026. Not individualized investment, tax, insurance, or legal advice; consult a qualified professional about your own situation. Tax figures reflect published 2026 federal parameters. Student loan program terms are set by the U.S. Department of Education; confirm your own plan at StudentAid.gov.