Disability Insurance for Nurse Practitioners

Nurse practitioners are rapidly growing in the field of medicine. NPs offer a similar level of care as physicians, but this career requires less education and training and often provides a better work-life balance.

Given the years of training and the investment needed to become a nurse practitioner, you want to protect your wealth and earning potential from injury or illness that could prevent you from being able to practice medicine.

That’s where disability insurance comes in. In this article, we will discuss how disability coverage works and answer some common questions that nurse practitioners may have about disability insurance.

What is Disability Insurance for Nurse Practitioners?

Disability insurance is a type of insurance that will provide financial assistance to NPs who are unable to work due to a short-term or long-term disability or injury.

How much the NP will receive depends on the individual disability insurance policy, but oftentimes, it can replace a sizable chunk of income.

There are 2 types of disability insurance available for NPs, short-term and long-term.

  • Short-term disability insurance (STDI) will provide coverage for a short, finite period of time, typically 2-6 months. Generally, this disability policy is meant to serve as a bridge between when the NP becomes disabled and when they are able to either return to work or qualify for long-term disability coverage. Childbirth is one of the most common reasons STDI is used.
  • Long-term disability insurance (LTD) extends coverage for a longer period of time, typically 2-5 years. This coverage is a form of income protection for NPs unable to work for an extended period of time due to illness or disability. You may be able to receive LTD in addition to Social Security Disability Insurance (SSDI), a government-sponsored program that provides limited long-term coverage based on your earning history. The waiting period for LTD benefits to kick in can be 30 to 180 days or more. (SSDI can take 5 months to several years to kick in and often involves a lengthy appeals process.)

We’ll go into more detail on both types of disability insurance below.


Coverage rates can vary based on your policy, but typically disability insurance will cover up to 60% of your lost income. It’s not uncommon to find coverage rates up to 70% though.

Each insurance company will have its own specific definition of disability and different types of disability coverage, so it’s important to understand the underwriting terms.

Some plans may cover you for a specific number of years (i.e. 2 years) while others may offer coverage until you reach retirement age. There are some policies that also have residual benefits where you can return to work at less than full-time and still receive partial disability coverage as a weekly or monthly benefit. Other plans have all-or-nothing coverage; you’ll receive disability insurance benefits until you are able to return to work full-time.


As with any insurance policy, the cost will vary based on a number of factors. Your age is the factor bearing the most weight. The younger you are, the cheaper it is to buy disability insurance coverage and the lower the premiums you will pay. As you grow older, premiums increase because your risk for illness or injury also increases.

  • Specialty or area of practice (i.e., surgery or internal medicine)
  • Sex
  • Percentage of income you want to cover (with some policies, it’s set at 60% and you cannot opt for a different rate of coverage)
  • Length of period of coverage
  • Any add-ons, like residual benefits or supplemental coverage (to cover the gap between what your disability insurance pays and the amount of money needed to maintain your monthly expenses)
  • The insurance company you choose

Your monthly cost — insurance premiums — for coverage will generally be 1% to 3% of your income. So if you earn $10,000 a month, your monthly premiums would range from $100 to $300.

Depending on the type of policy (i.e., employer-sponsored), the premiums may or may not be taxable. If the premiums are paid pre-tax, then the benefits are taxable.

Long-Term vs. Short-Term Disability Insurance

Here are some additional differences between long-term vs short-term disability coverage:

  • Cost of premiums: LTDI can cost from $1 to $3 for every $1,000 of monthly income (1% to 3%) whereas STDI is usually $0.50 to $1 for every $1,000 of monthly income (0.5% to 1%).
  • Employer availability: STDI plans are more commonly provided by employers than LTDI. Not surprising given that STDI is for employers temporarily out of work (for weeks to months) whereas LTDI recipients may never return to work again.
  • Group coverage: STDI can be more effectively sold as group coverage, hence there are far more group coverage options for STDI than for LTDI plans. Group coverage is cheaper than individual coverage as the risk is spread out more broadly.
  • Waiting period: It’s typically a 7-14 day waiting period for disability insurance coverage whereas LTDI coverage has a waiting period of 30 to 180 days or more.
  • Advance planning: Generally, you will plan for short-term disability coverage upfront with your supervisor and HR department at your work. Utilize STDI to cover a future medical event (i.e., knee replacement or gastric bypass surgery) and have a good idea of how much recovery time will be required.
  • Definition of disability: LTDI has a stricter, more narrow definition of disability, and some conditions that may qualify include traumatic brain injury, permanent paralysis, or cancer. STDI defines a qualifying disability as a much broader range of conditions, including surgery, pregnancy, childbirth, mental health, and drug or alcohol rehabilitation.
  • Eligibility requirements:  may have very stringent eligibility requirements, like having been continually employed in the same occupation for a minimum number of years. STDI, inversely, may not have any minimum eligibility requirements beyond the medical condition itself.

Own Occupation vs. Any Occupation Coverage

When reviewing supplemental disability insurance products, you will come across the terms own occupation vs. any occupation coverage.

Either form may be offered as long-term or short-term disability insurance, but it’s a more specific form of coverage.

  • Any occupation coverage pays out if you’re fully disabled and unable to return to work or to any other job. It costs less but carries many restrictions and makes it hard to file a claim and access benefits. Any occupation coverage can be for short-term or long-term disability.
  • Own occupation coverage will pay out if you are disabled and unable to work in the area of medicine (i.e., dermatology) that you specialized in during your training. This coverage will pay the claimant even if you are able to work another job. Or, if you took a lower-paying job, your own occupation coverage could cover the difference in salary.

Disability Insurance Plans

Group Coverage

Group coverage covers members of a group like members of an organization or employees of a company. It’s typically less expensive than an associate or individual option and may have a simpler claims process. Generally, these policies are less flexible and have limited customization options.

Associate Policy

An associate policy is similar to group coverage as it’s a policy that covers members of an organization. It’s generally less expensive than individual coverage, but more expensive than group coverage. It can be more flexible than a group coverage plan and have some customization options. The claims process may be more complicated, but it will be less arduous than with an individual policy.

Individual Coverage

An individual coverage plan is the most flexible and customizable option, but it’s the most expensive one and has the most complicated claims process. It may even require a qualifying physical. Individual coverage, though, can offer the most comprehensive protection.

6 Reasons to Invest in Disability Insurance as a Nurse Practitioner

If you’re a nurse practitioner thinking about disability insurance, here are 6 reasons to consider investing now. These apply to other medical professionals too, like doctors, registered nurses, and nurse anesthetists.

1. Now is Cheaper than Later

Insurance companies base their costs (premiums) on the risk they are undertaking. The older you get, the greater your risk of experiencing a debilitating condition and the more expensive it is to purchase a policy. You’re only getting older. Purchasing a policy now — when you’re the youngest you’ll ever be — will enable you to lock in the most affordable premiums.

If you are a fellow or a resident, you may be able to get steep discounts now because you aren’t yet practicing. You may be able to lock in any premiums that you get now throughout your entire career.

2. Protect Your Income

No matter how young or healthy you are now, life happens. If you are the primary provider for your family or carry significant debts (i.e., mortgage), you will want to protect your income. The inability to work can harm your family’s financial well-being.

Income protection from disability insurance enables you and your family to stay on track with where and how you’re living (i.e., no need to sell the house and downsize), cover your bills, and maintain general financial and better emotional stability.

3. Pay Back Student Loan Debt

If you become injured, your student loans won’t go away. Even with bankruptcy, in most instances, your student debt still won’t be discharged. Having disability insurance will ensure you can continue to meet your student debt-related obligations.

4. Protection After Residency

During a residency or fellowship, your disability insurance is likely capped based on your earnings. But after you finish your residency, your earnings will go up.

You could go through an insurance underwriting process again, or you could add a Future Increase Option Rider to your policy. This rider is a provision that allows for increased coverage without having to submit to further underwriting or get a new policy altogether.

Getting the rider early on means you can continue with increasing, wage-based coverage well beyond the early years of your NP career.

5. Potential Access to Multi-Life Discounts

If you work for a large employer, you may be eligible to get multi-life discounts or unisex discounts which enable you to get cheaper premiums and save money on overall coverage.

You could be eligible for Guaranteed Standard Issue Policies which do not require medical underwriting –  meaning you can be approved regardless of your current state of health or any preexisting conditions.

Through private insurers, you may be able to get a discount as well. While there is no such thing as a bundled rate for health care, disability, and life insurance, you may be able to get a discount if you purchase two or more policies through the same provider.

6. Portability

Many nurse practitioners will move around. It’s unusual to stay with one practice for the entirety of your healthcare career.

You could have excellent disability and health insurance coverage today through your employer, but if you change jobs you may find yourself without adequate (or any) disability coverage.

The point is you don’t want to be at the mercy of your employer’s disability insurance offerings. Having your own policy offers you protection as your career path progresses. Again, you want to lock into the best coverage and policy rates you can get now as opposed to when you get older and eligibility requirements and rates become less favorable.

Characteristics of a Quality Disability Insurance Policy

Looking at different policy options and disability insurance quotes can be a bit tedious. The best disability insurance plan will have these features:

COLA Rider

COLA stands for cost of living adjustment. Look for a policy that has a COLA rider so your benefits keep pace with inflation if you’re disabled for 12 months or longer.

Own Occupation

The own occupation rider means you can file a claim for disability if you are unable to perform your specific occupation. Without this rider, you may be denied disability benefits if you are considered able to perform other work outside of your career occupation.

For example, if you are surgical NP and lose the use of a hand, you could no longer practice in your specialty. While there are other jobs you could do, they would likely pay much less. The own-occupation rider enables you to protect your income as a surgical NP.

Residual Disability Rider

A residual disability rider will offer income protection if you are only able to return to work on a part-time basis. As you would be earning less money, a residual disability rider would provide benefit coverage in proportion to the amount of income lost.

To qualify, you typically need to have a loss of income of at least 20% but check closely with the policy options you are considering.


Long-term coverage means you’ll be covered if you become permanently unable to work from the date of the disability until retirement age.

Future Increase

A future increase option means you are securing disability insurance at current rates that you can carry into the future without having to (re)submit to a medical exam or new underwriting process.

Student Loan Repayment Rider

If you have significant student loan debt, consider a policy with a student loan rider. Here, your policy will pay off your student loans in the event you become disabled. As with any policy, there may be a benefit cap (i.e., $250,000). So read the fine print and consider the amount of debt you have now and how quickly you are paying it down year over year.

Frequently Asked Questions

Here are some frequently asked questions that nurse practitioners and other medical professionals have regarding disability insurance.

What is a Policy Rider?

A policy rider is an amendment to your existing policy that can add additional coverage. We’ve talked about several different disability policy riders to look for above.

You will pay a higher premium for having a rider, but overall, it can significantly increase your coverage.

How Do Disability Insurance Companies Classify Nurse Practitioners?

Disability insurance companies categorize nurse practitioners (NPS) in different ways based on the company itself and the type of policy being offered.

Most commonly, nurse practitioners are classed in the same occupational class as physicians and will pay a similar premium (rate) for coverage.

Is a Nurse Midwife Considered a Nurse Practitioner?

Yes, generally disability insurance companies consider a nurse midwife (CNM) to be a nurse practitioner. This is because CNMs have a similar level of education and training, and both are licensed to practice as advanced practice registered nurses (APRNs).

What Does Elimination Period Mean?

The elimination period means the waiting period before the benefits or benefit period kicks in after you have submitted your disability insurance claim. During the elimination period, you will not receive any income or insurance benefits and will have to carry all of your expenses out of pocket.

Age, condition (of illness or injury), and the type of policy you have all have an impact on how long the elimination period will be. It can range in length from 7 to 180 days — or more. Short-term disability policies will have a shorter elimination period. For long-term policies, the waiting period could even be 1 year.

Does Disability Insurance Cover Long-Term Care?

No, disability insurance does not cover long-term care. Long-term care insurance is a separate plan you would need to purchase, and it’s designed to cover the costs associated with long-term or end-of-life care, such as skilled nursing or assisted living facilities.

What is the Most Common Type of Disability Insurance for Nurse Practitioners?

Own-occupation disability insurance is the most common type of disability insurance for nurse practitioners. This policy will pay disability benefits if you are unable to perform the specific duties of your own occupation — even if you are able to work in another occupation.

How Does Your Medical Specialty Impact Your Disability Insurance Rates?

Your area of specialization bears a significant impact on your rates for disability insurance. Specialties that are deemed to be high-risk carry higher premium rates as a result.

  • Emergency or ER medicine
  • Anesthesia
  • Surgery
  • Orthopedic surgery (as a separate high-risk class of surgery)
  • Neurosurgery (as a separate high-risk class of surgery)
  • Radiology
  • Oncology
  • Cardiology
  • Obstetrics and Gynecology
  • Midwifery

Bottom Line

Getting disability insurance is a smart idea for nurse practitioners. Protect your income and your family in the event of being unable to work as an NP, ensuring that life can continue as seamlessly as possible and you have wage protection in place.

The income that comes with being an NP is obviously one attractive facet of the role, and you want to be able to take care of your family and your financial obligations as an NP regardless of whether or not you’re actively practicing in that field.