Types of Disability Insurance Plans

  1. Group — received through your employer

  2. Individual — purchased on your own privately

  3. Guaranteed Standard Issue (GSI) — Offered at various residency programs or groups

Group Plan

Group coverage disability insurance policies are typically offered to employees by the employer. These policies are the most limited of the disability insurance types in terms of coverage. Group DI plans typically provide short-term coverage for 3-6 months and are designed to replace 60-80% of your income, though some plans offer long-term coverage. Also, the plan’s definition of what it means to be disabled may be difficult to satisfy, even if you are unable to perform the duties of your job, which may make receiving a payout difficult. These plans are generally not portable, meaning the benefit does not stay with you if you are laid off or change jobs. While physicians may have disability insurance through a group plan, they are still recommended to get their disability insurance through either the individual plan or the GSI plan, as discussed below.

Individual Plan

Individual plans offer the most flexibility and allow you to tailor the policy benefits to your needs. These policies allow you greater control over the premiums, the definition of “disabled,” and optional policy provisions called “riders”. Of all the different policy provisions you can add on, the true own-occupation rider is the most important to include because it protects you if you cannot perform the duties of your occupation.

Consider getting individual DI as a resident physician (or during your intern year for advanced specialties) to lock in a better rate because your rate will increase if you are in an advanced specialty.

Guaranteed Standard Issue

Guaranteed Standard Issue (GSI) plans provide guaranteed disability insurance coverage and are offered by many medical residency and fellowship programs. A GSI plan may benefit you over the individual plan if you satisfy either of the following:

(1) have a pre-existing condition that excludes you from receiving disability insurance coverage, or

(2) are a woman.

IMPORTANT: If you have already applied and been denied coverage from another disability insurance plan, you may unintentionally risk losing your eligibility for a GSI plan.

Pros:

  • Women pay more for disability insurance, approximately 30-50% more than men. Because GSI plan rates are unisex, they may provide significant savings over their lifetime.

  • No medical underwriting or medical exam is necessary. In other words, those with pre-existing conditions are protected as they do not need to disclose that info.

  • GSI plans are portable. In other words, as long as you continue to pay your plan premiums, you can continue coverage under the GSI policy even with job changes.

  • GSI policies are specialty-specific and coverage is based on your own occupation.

  • You can generally remain covered even if you participate in “high-risk” activities such as skiing, base-jumping, racecar driving, etc.

Cons:

  • You may be denied coverage for a GSI plan if you have already been denied coverage elsewhere.

  • GSI plans may be more expensive than individual plans, especially if you are a healthy young male.

  • The maximum monthly benefit may be capped at $10,000. Individual plans offer greater flexibility.