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- Group disability insurance provides affordable income protection for doctors but may have benefit limits, stricter disability definitions, and limited portability
- Individual disability insurance offers greater customization, portability, and can include own-occupation coverage
- Doctors can combine group and individual coverage to supplement their income protection and fill gaps in their group plan
- Insurers typically cap total DI across all sources at 60%-85% of earnings, and benefits are often reduced by offsets (CPP‑D, WSIB/WCB, EI, other DI coverage)
A group disability insurance offered through your employer or an association covers 50%-70% of the physician’s base salary up to a monthly maximum. Individual disability insurance, on the other hand, fills this gap and provides a higher benefit. It is also portable and includes an own-occupation disability definition. For many physicians, group coverage is a starting point, while an individual policy may help cover gaps in contract terms or income protection.
Core differences between individual and group disability insurance for doctors:
Definition of disability:
- Individual: Can include an own-occupation definition, allowing a physician to receive benefits if they can no longer perform the duties of their specific specialty
- Group: Often uses own/regular occupation for the first 24 months, then shifts to“any occupation”
Ownership:
- Individual: Physician owns the policy, hence it remains in force even if they switch clinics
- Group: The coverage ends once you leave your clinic or medical association
Premiums:
- Individual: Premiums are generally higher because the physician pays for personalized coverage
- Group: Lower rates as risk is pooled across the group
Best for:
- Individual: Physicians seeking portable and customized coverage
- Group: Physicians looking for affordable baseline coverage
Do doctors need disability insurance in Canada?
Yes, doctors need disability insurance in Canada because it plays a crucial role in protecting them from income loss if they become unable to practise. For physicians, even a temporary disability can result in a significant loss of income, particularly for those in highly specialized or procedure-based fields. While provincial health insurance in Canada covers patients’ medical expenses, it does not replace a physician’s income if the physician is unable to work.
In general, disability is a broad term covering various conditions, from illnesses like cancer to temporary setbacks such as bone fractures. One of the first steps to getting disability insurance is understanding what disability means. The different definitions of disability significantly impact how and when benefits are paid out.
What are the definitions of disability applicable to doctors for getting disability insurance?
For physicians, the definition of disability determines when they can receive benefits and whether they can continue working in another capacity while receiving them. The most common disability definitions relevant to physicians are:
- Own occupation: A doctor is considered disabled if they cannot perform the duties of their specific medical specialty. For example, a surgeon who can no longer perform surgery because of a hand injury may qualify for benefits even if they can work as a medical consultant or teacher
- Any occupation: A doctor must generally be unable to perform another occupation for which they are reasonably suited based on their education, training, or experience. This is typically a more restrictive definition of disability
- Regular occupation: Regular occupation is similar to “own occupation” but typically applies to your usual line of work without specifying your exact duties. This can offer broader coverage than “any occupation” but is not as tailored as “own occupation
How do these disability definitions affect your coverage?
The key difference between group and individual disability insurance lies in how they define disability. Group disability insurance typically uses the “any occupation” or “regular occupation” standard, which means you only receive benefits if you cannot perform “any” possible job. This can be problematic for doctors because, even if they can’t practice medicine, they might still be able to work in a different capacity or a less demanding role.
Individual disability insurance often uses the “own occupation” definition. This means that doctors receive benefits if they are unable to work in their specific medical field. This is crucial for physicians, as it takes into account the specialized skills and knowledge they have developed. Having an individual disability insurance policy with the “own occupation” clause ensures that if doctors can no longer practice in their specialty due to health issues, they will still have financial support.
What is the difference between group and individual disability insurance for doctors?
Group and individual disability insurance play a crucial role in protecting doctors in Canada from income loss in case they become unfit to practise. For doctors, choosing between these two options involves critical differences in how claims are paid, taxed, and structured.
Group disability insurance
Group disability insurance for physicians provides income protection through a group plan sponsored by an employer, hospital, university, professional association, or other organization for doctors. It typically covers 50%-70% of your base salary. For doctors, group coverage can provide an affordable foundation for disability protection, often without the detailed medical underwriting required for an individual policy. Group coverage is generally less customizable and may use a stricter definition of disability.
In Ontario, physicians can also access group disability insurance through professional associations. The Ontario Medical Association (OMA) provides insurance solutions primarily for physicians and certain other eligible groups through OMA Insurance, including disability insurance. OMA offers coverage options designed for doctors at different stages of their careers.
Individual disability insurance
Individual disability insurance provides income protection through a policy that is personally owned by the physician rather than an employer or association. Unlike group coverage, doctors can choose the benefit amount and policy features based on their income, occupation, and financial needs.
For physicians, one of the biggest advantages is the availability of an own-occupation definition of disability. This can allow a doctor to receive benefits when they can no longer perform the duties of their specific specialty, even if they are capable of working in another medical or non-medical occupation. Moreover, individual policies are underwritten; doctors typically undergo more detailed medical and financial underwriting than they would for group coverage. However, for physicians seeking long-term disability insurance, specialized income protection, an individual policy can complement group coverage and help address gaps in the group plan.
Key differences: Individual vs group disability insurance for doctors
| Features | Group disability insurance | Individual insurance |
| Ownership | The employer, hospital, university, or association | Individually owned by the doctor |
| Benefit amount | Based on a percentage of income, subject to the group plan’s maximum benefit | Customizable based on income and needs |
| Premium payment | The employer or association may pay all or part of the premium | Paid directly by the physician to the insurer |
| Customization | Limited control over the benefit amount, definition of disability, waiting period, and other policy features | Extensive customization options for individual needs |
| Portability | Coverage tied to employment; may lose coverage if you change jobs | Portable coverage; not tied to employment |
| Definition of disability | Typically uses stricter definitions of disability, which may require you to be unable to work in any occupation after a certain period, depending on the employer’s plan design | Offers greater flexibility and stronger definitions, including options such as “own occupation” coverage, where benefits are paid if a doctor cannot work in their specific occupation, even if they could work in another role |
| Underwriting process | Typically requires no or minimal underwriting as it is under a group plan | Rigorous underwriting process may include medical exams and detailed health history disclosure |
| Cost | Lower premiums due to risk pooling | Higher premiums reflecting personalized coverage |
| Benefit period | Typically includes both short-term and long-term disability benefits, depending on the plan opted | Flexible benefit periods, ranging from a few years to retirement age or beyond |
| Tax implications | Benefits may be taxable if the employer pays premiums | Benefits are generally tax-free if premiums are paid with after-tax dollars |
| Waiting period | Set by the group plan and cannot usually be customized by an individual physician | The physician can generally select from available waiting periods based on their financial needs and policy options |
| Changes to the plan | The employer or association may change the plan’s terms, coverage, or premiums according to the group contract | The physician has greater certainty over the policy’s contractual terms, particularly with a non-cancellable policy |
| Residual/partial disability | Limited or unavailable | Available as a rider |
| Best suited for | Doctors looking for affordable baseline income protection through their employer or association | Doctors who want portable, customizable coverage designed around their specialty and long-term income needs |
Partial and residual disability benefits
Partial disability means you can still work but not at full capacity, while residual disability means there are certain job tasks you can no longer perform. Group disability insurance plans often lack coverage for partial disabilities, while individual disability insurance plans will in most cases include coverage for both partial and residual disabilities. This is beneficial for doctors, as it allows them to receive benefits even if they can only work part-time or perform some of their job functions.
Did you know?
Our advisor’s take: Is group disability insurance enough for physicians?
One of our advisors recently worked with a physician earning $20,000 per month. Their employer’s group LTD plan provided a maximum benefit of $10,000 per month, leaving a significant gap between their income and disability coverage.
The advisor explored adding an individual disability insurance policy to increase the total monthly benefit.
| Parametres | Group DI coverage | Group + individual DI coverage |
| Monthly income | $20,000 | $20,000 |
| Group DI benefit | $10,000 | $10,000 |
| Individual DI benefit | $0 | $5,000 |
| Total monthly benefit | $10,000 | $15,000 |
| Income replaced | 50% | 75% |
| Monthly income gap | $10,000 | $5,000 |
Disclaimer: For reference purposes only. Actual disability benefits can vary based on policy limits, income, offsets from other benefits, tax treatment, and individual policy terms.
Our advisor’s insight: Through this illustration, we helped our client understand how they may combine group and individual disability insurance rather than relying solely on an employer or association plan. Adding $5,000 of individual coverage brings the illustrated replacement to 75% and reduces the monthly income gap by half.
What should you consider when choosing between group and individual disability insurance?
When deciding between group and individual disability insurance, it is crucial to evaluate specific aspects of each option to ensure you select the best coverage for your needs.
Group coverage
When evaluating group or association disability insurance, ask the following questions:
- Can you convert to an individual plan without medical evidence of insurability if you change employers or leave the association?
- Can the plan be cancelled?
- Do benefits reduce with age?
- Will you still be covered during a strike or leave of absence?
- How long will the plan remain active?
- Is renewal in the plan guaranteed, and will evidence of good health be required?
- Is the price schedule guaranteed? If not, how much could the cost increase?
Individual coverage
For individual disability insurance, consider these factors:
- What is the definition of disability, for example, “Own occupation” or “Regular occupation”
- What is the waiting period before the coverage starts?
- Are benefits paid if you can work but not at full capacity?
- If you are self-employed, can the plan cover deferred income taxes and other business expenses?
- Is there a refund of premiums offered after a specified period without a claim?
Things to look for in individual and group disability insurance for doctors
Here are the things you should look for in individual or group disability insurance for physicians in Canada:
- Benefit amount: Insurers can cap total disability benefits from all sources at around 60%-85% of earnings and reduce the benefit amount if there is any offset. You should thus check what percentage of your income will be paid and whether there is a maximum monthly benefit
- Benefit period: Long-term disability benefits commonly continue to age 65, although policies may offer shorter periods such as 2, 5, or 10 years. Choose a benefit period that aligns with your needs
- Inclusions/exclusions: Coverage should generally address both sickness and injury. You should also check for limitations or exclusions, including pre-existing condition clauses, and understand how they could affect your ability to claim benefits
- Waiting period: Common elimination or waiting periods include 30, 60, 90, 120, or 180 days, depending on the policy. Check how long you must be disabled before benefits begin. Ask whether the waiting period differs for accidents and illnesses and whether a new waiting period applies if a disability recurs
- Definition of disability: Physician-specific individual policies may offer own-occupation coverage, while group plans can move from an own/regular occupation definition to any occupation, often after 24 months
- Portability: Find out whether your coverage will continue if you change employers, leave a hospital, open a private practice, or change medical associations
- Future increase options: Young doctors and residents may see their income increase substantially as they progress in their careers. This can be particularly valuable for residents and early-career doctors whose income may rise substantially after completing training
How does medical underwriting differ in group and individual disability plans?
Group policies typically involve little to no underwriting, though underwriting may be required in some scenarios, such as for late applicants or small, high-risk groups. Conversely, individual policies may require detailed health history disclosures and medical examinations to accurately assess your risk profile.
For doctors, especially, it is crucial to know that certain health issues or dangerous hobbies might influence both the underwriting steps and what they will end up paying for your disability insurance policy. It makes sense to tell insurers everything up front when applying so that they can give an accurate assessment and make sure you are covered properly.
What is medical underwriting?
How much disability insurance do doctors need?
Doctors should consider their income, existing group coverage, and financial obligations when determining how much disability insurance they need. However, insurers typically cap total disability benefits from all sources at around 60%-85% of earnings, rather than allowing coverage to replace 100% of income. The amount a doctor can receive may also be reduced by offsets from other benefits, such as CPP Disability (CPP-D), WSIB/WCB, EI, or other disability insurance policies. For this reason, doctors should assess their existing coverage and calculate their potential benefit after these offsets before purchasing additional individual coverage.
How to apply for disability insurance as a doctor?
Group coverage through work typically involves automatic enrolment by your employer or union, especially in large companies where medical underwriting may not be required. In smaller organizations, you might need to provide medical information or undergo a physical exam for group coverage. The insurance company assesses each applicant individually due to the smaller risk pool.
On the other hand, applying for an individual plan involves a more detailed process where your application is evaluated by the insurance company. Our advisors can assess your needs, compare policies, and help select suitable disability insurance coverage. Schedule a call now!
Call 1-888-601-9980 to speak to our licensed advisors right away, or book some time with them below.
Frequently Asked Questions
When should doctors consider purchasing disability insurance?
The ideal time to buy disability insurance is early in your career. While it is possible to purchase at any point, securing coverage early ensures you are protected from the start, often at a lower cost. As your income grows, you can adjust your coverage accordingly. Given the potential consequences of losing your ability to earn a living, investing in long-term disability insurance is vital for doctors.
Is group disability insurance enough for doctors?
No, group disability insurance may not be enough for doctors. While it can provide valuable baseline coverage, it may have a maximum monthly benefit, a more restrictive definition of disability, limited customization, and coverage that ends when the physician leaves the group. Doctors should review their existing plan to determine whether it adequately protects their income and specialty. An individual policy can supplement any such gaps.
What is own-occupation disability insurance for doctors?
Own-occupation disability insurance can pay benefits when a doctor is unable to perform the substantial duties of their specific occupation or medical specialty, even if they are capable of working in another field.
What happens to a doctor’s group disability insurance when they change jobs?
In many cases, group disability coverage is tied to the employer or association and may end when the doctor leaves the group. Some plans may offer continuation or conversion options. An individually owned disability policy, on the other hand, generally remains with the physician when they change employers or practices, provided the policy remains in force and premiums are paid. So, it totally depends on the terms of the group plan.
Can doctors have both group and individual disability insurance?
Yes, doctors can have both group and individual disability insurance at the same time in Canada. In fact, combining the two can help doctors get more comprehensive coverage. Group disability insurance can provide affordable coverage through an employer, hospital, university, or medical association. An individual disability policy can then supplement this coverage by filling gaps in the monthly benefit amount, definition of disability, portability, and policy features.
Are there any exclusions in disability insurance coverage?
Disability insurance policies may contain exclusions, specifying conditions or circumstances where benefits are not payable. Common exclusions include pre-existing conditions, self-inflicted injuries, and disabilities resulting from illegal activities.
How long do disability insurance benefits last for doctors?
The disability insurance benefit period lasts for 6-26 weeks for short-term policies, while it can cover up to age 65 or retirement for long-term policies. Doctors should consider a longer benefit period when they want protection against a disability that could permanently affect their ability to practise and earn an income.
Disability insurance helps doctors protect their income if an illness or injury prevents them from practising. Group coverage offers affordable protection, while individual coverage can provide higher benefits, own-occupation protection, and portability. Many physicians combine both to fill gaps and reach a 60% to 85% income replacement target, subject to offsets.
