How much coverage do you actually need?

Most disability insurance guidance for physicians converges on replacing roughly 60-70% of gross income. That range shows up for a specific, mechanical reason, not because it's some universal ideal — and once you understand why, it's easier to see when your own number should move away from it.

Where the 60-70% figure actually comes from

Carriers themselves cap how much individual disability coverage they'll issue relative to income — commonly framed as up to around 60% of gross income, subject to the carrier's own monthly dollar cap regardless of how high your income is. That underwriting ceiling is part of why 60% became the industry-standard starting point, not just a rule someone picked for tidiness.

The other half of the reason it tends to be enough: individual policy benefits are received completely tax-free when you paid the premiums yourself, and most high earners are already paying somewhere in the 15-35% range of income toward taxes. A tax-free 60% of gross income can end up close to your normal take-home pay — see the calculator's tax treatment panel for what that looks like with your own numbers.

Start from expenses, not just a percentage

The more precise approach — and the one worth actually doing once, even if you use 65% as a starting default — is to work from your real fixed obligations: mortgage or rent, loan payments, dependent care, insurance premiums, and a reasonable baseline for everything else. A percentage-of-income rule is a fast approximation; your actual expenses are the real target.

Subtract what you already have

Whatever your employer's group LTD plan actually pays — after its dollar cap and the tax treatment of employer-paid premiums are both accounted for — reduces the gap you need to fill with an individual policy. Group LTD headlines "60% of salary" but frequently nets out lower in practice once caps and taxes apply; see the group LTD gap guide for the mechanics. Any existing individual policy counts here too.

Add back your loans

Student loan payments don't pause because you're disabled — if anything, a disability makes federal income-driven repayment amounts drop toward $0, but private loans and any refinanced loans generally keep billing on schedule. Whether that's a real gap for you depends heavily on your repayment strategy (PSLF eligibility, refinancing, aggressive payoff) — model that first at MedDebt Calculator, then bring the resulting monthly obligation back here.

Factor in a working spouse, carefully

A spouse's income can reasonably lower how much you personally need to replace — the calculator's expert mode has a field for it. But don't lean on it too heavily: it assumes their income, job, and health all stay stable at exactly the moment yours doesn't, which is an optimistic assumption to build a safety net on. Treat spouse income as a partial offset, not a substitute for your own coverage.

Put it together

Run the coverage gap calculator with your actual group LTD benefit, specialty, and (in expert mode) spouse income and any existing individual policy. Treat the default 65% target as a starting point to adjust from using your own expense picture, not a number to accept unexamined.

Sources

Carrier issue-and-participation limits and specific dollar caps change over time and vary by carrier — confirm current limits with a broker before treating any specific cap as current.