Disability Income Coverage Calculator for Orthopedic Surgeons

Hospital group LTD caps benefits at $10,000–$15,000/month — and that benefit is taxable at your marginal rate. At $700K–$1.5M gross income, the real coverage gap runs $20,000–$45,000 per month. This calculator shows your exact shortfall and how much individual own-occupation coverage to carry.

Coverage gap at a glance

These estimates assume a $10,000/month group LTD cap (employer-paid, benefits taxable), no existing individual policy, and a 37% federal marginal rate — the applicable bracket for MFJ filers above $768,700 taxable income in 2026.¹ Individual DI benefits paid on after-tax premiums are received income-tax-free under IRC § 104(a)(3).²

Most carriers cap individual policies at $20,000–$25,000/month. At $800K+ income, a single policy cannot close the full gap — see stacking below.

Why 60% of gross is the right target

The industry standard disability income replacement ratio is 60% of pre-disability gross income. For orthopedic surgeons, three factors justify this threshold:

• Individual DI benefits are tax-free. If you pay your own premiums with after-tax dollars, benefit payments are received income-tax-free under IRC § 104(a)(3). At a 35–37% marginal rate, 60% of gross tax-free replaces roughly 85–90% of your after-tax income. You lose ASC distributions and production bonuses — which a policy cannot replace anyway — but you can cover all fixed obligations.
• Carriers limit aggregate coverage to 60–70% of income. This is deliberate. If policies replaced 100% of income, no one would return to work. When applying, carriers will verify and coordinate coverage across all existing policies (group + individual combined).
• ASC distributions are usually excluded. Your disability policy replaces earned income from medical practice — not passive distributions from ASC equity you own. Budget the policy to cover operating expenses and personal obligations, not total lifestyle maintenance.

The group LTD tax trap

When your employer pays group long-term disability premiums — the default for hospital-employed surgeons — any benefits you receive are ordinary income under IRC §§ 105 and 106.³ At a 35–37% marginal rate, a $10,000/month gross benefit produces only $6,300–$6,500/month in after-tax income. Group LTD covers far less than it appears to on paper.

Maximum individual coverage limits and stacking

No single carrier will issue more than $20,000–$25,000/month in own-occupation DI to an individual policyholder. At $800K+ gross income, that won't cover your 60% target. The solution is stacking — buying policies from multiple carriers simultaneously, with full disclosure of existing coverage at application.

• Illustrative stack: Guardian $10K/month + Principal $10K/month + Mass Mutual $5K/month = $25K/month individual. Add $6,300/month after-tax group LTD = $31,300/month total. For an $800K surgeon, that's 47% of gross — not 60%, but transformatively better than group alone.
• Maximum practical coverage: With 3–4 carriers, most surgeons can reach $35,000–$50,000/month total. Aggregate coverage above roughly 60–70% of documented income will typically be declined.
• Carriers offering true own-occupation definitions for surgeons (2026): Guardian, Principal, Ameritas, The Standard, and Mass Mutual. Other carriers use modified definitions — your benefits stop once you can do any work, not just surgical work.⁴

The fellowship timing window (guaranteed standard issue)

During residency and fellowship — and for the first 60–90 days of attending employment — most major carriers offer guaranteed standard issue (GSI) disability policies without individual medical underwriting. Under GSI, you are approved for a defined benefit amount based solely on your training level and anticipated income, not your health status.

For orthopedic surgeons, the GSI window is the single most important disability insurance opportunity of your career. A hand injury, rotator cuff tear, vision issue, or neurological finding that appears after fellowship can make you uninsurable or trigger permanent specialty exclusions. Non-cancellable own-occupation policies locked in during GSI cannot be rescinded and cannot be excluded for conditions that develop later.

If you are currently in fellowship or within 90 days of signing your first attending contract, placing an individual own-occupation policy is the single highest-priority financial action you can take this month.