Types of Insurance Policies Doctors Need


Learn more about the best insurance policies for doctors in Canada, and how doctors can protect their income, ensure business continuity, and provide financial security for loved ones.


Being a doctor or physician comes with its own unique challenges and responsibilities. So, how do those who care for everyone else ensure they are protected? By having the right insurance policies in place!

The best insurance policies for doctors cater to a medical professional’s specific personal and professional needs. This article will take you through the types of insurance policies in Canada that every physician and doctor should consider.

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  • Living benefits
  • Death benefits
  • Practice-related coverage 

Living benefits

Doctors and physicians in Canada are usually high-income earners. Since they’re specialists in what they do, it is unlikely that they will look for alternative sources of income. This makes it essential for doctors and physicians to get disability insurance and critical illness insurance to ensure they get adequate coverage in the event of an accident or illness. 

Disability and critical illness insurance

Just like any other working professional, doctors need to protect their income and financial stability against the risk of illness or injury that could prevent them from working. This is where disability and critical illness coverage come into play.

Disability insurance for doctors

Disability insurance for doctors provides financial protection in the event that they’re unable to work due to illness or injury. Disability insurance protects doctors against a loss of income by replacing a substantial amount of their paycheque in the event of an injury or disability. 

Doctors can use their disability insurance payout to:

  • Manage living expenses 
  • Clear any debts
  • Take care of other financial obligations

Disability coverage can be short-term or long-term, covering partial or total disability, with benefits starting from 30 to 365 days after the incident. 

How is disability defined?

Disability is often defined differently by insurers, but it is important to understand that it generally falls into two categories: 

  1. Own occupation coverage that pays benefits if the doctor is unable to perform the specific duties of their medical specialty 
  2. Residual or partial disability coverage provides benefits if the doctor can still work but experiences a significant reduction in income due to a partial disability

Other key features of disability insurance:

In addition to own-occupation and residual/partial disability coverage, there are other important features and riders that doctors can consider:

  • Future increase option (FIO): Allows doctors to increase their coverage amount as their income grows, without requiring additional medical underwriting
  • Cost of living adjustment (COLA): Adjusts the benefit amount annually to keep up with inflation, ensuring that the purchasing power of the benefits does not decrease over time
  • Non-cancellable and guaranteed renewable: Ensures that the insurer cannot cancel the policy, increase premiums, or reduce benefits as long as premiums are paid
  • Return of premium rider: Offers a partial refund of premiums paid if no claims are made over a specified period

Learn more about disability insurance riders

Critical Illness Insurance

With CI or critical illness insurance, doctors receive a one-time lump sum payment if diagnosed with a critical illness after the policy starts. Unlike life insurance, the payout occurs during the doctor’s life to address immediate financial burdens. Plans typically cover serious illnesses like cancer, heart attack, stroke, paralysis, and kidney failure.

The key features of critical illness insurance are:

  • Lump-sum payment: Provides a one-time payment that can be used for any purpose, such as medical bills, travel for treatment, or home modifications
  • Coverage for multiple illnesses: Policies typically cover a range of critical illnesses, providing comprehensive protection
  • Survival period: Benefits are usually paid out after a specified survival period following the diagnosis

What does critical illness insurance cover?

Most insurers offer plans that cover different serious diseases. These plans have basic coverage and enhanced coverage options.

Basic critical illness coverage includes:

  • Cancer
  • Heart attack 
  • Stroke 

Enhanced critical illness insurance coverage includes serious medical conditions that can be categorized into five broad buckets—cerebrovascular diseases, serious heart issues, vision impairment, neurodegenerative diseases, and other critical ailments.

Learn more about critical illness insurance cover

How can critical illness insurance help doctors in Canada?

Doctors are some of the highest-paid individuals in Canada. This makes them vulnerable to financial and personal challenges that arise from serious illnesses. Here’s how CI insurance helps protect them:

  • Cover everyday expense so their family can maintain the same standard of living (groceries, bills, rent, etc.)
  • Pay off outstanding debt (mortgages, lines of credit, credit card bills, business loans, etc.)
  • Provide for their children’s education

Check out PolicyAdvisor's life insurance calculator.

Death benefits

A death benefit is a payout to the beneficiaries of a life insurance policy or pension plan. For doctors in Canada, a life insurance policy can be the cornerstone for financial planning. Let’s understand what life insurance is and what types of life insurance doctors in Canada can get. 

Life insurance

 Life insurance pays a tax-free lump sum benefit to the beneficiaries of the insurance payout. This can be used to replace the income of a deceased doctor to support children or dependents and maintain their quality of life.

There are two primary types of life insurance: term life insurance and permanent (or whole) life insurance.

Term life insurance:

Term life insurance offers coverage for a specific period, typically 10, 20, or 30 years, offering death benefits if the insured passes away during the policy term. Here are the key features of term life insurance:

  • Affordable premiums: Term life insurance generally comes with lower premiums compared to permanent life insurance, making it an attractive option for doctors seeking cost-effective coverage
  • Fixed coverage period: Policyholders select the duration of coverage, ensuring protection for a predetermined period. Once the term ends, the policy expires unless renewed
  • Renewable and convertible options: Many term life policies offer the flexibility to renew the policy at the end of the term or convert it to permanent life insurance without the need for a medical exam, providing adaptability as needs change over time

Permanent (whole) life insurance:

Permanent life insurance offers coverage for the insured’s entire life. It provides death benefits to beneficiaries whenever the insured passes away, as long as premiums are paid. Here are the key features of whole life insurance:

  • Lifetime coverage: Unlike term life insurance, permanent life insurance ensures lifelong protection, offering peace of mind and financial security for the insured’s beneficiaries
  • Cash value accumulation: A portion of the premiums is allocated to a savings component that accumulates cash value over time on a tax-deferred basis. Policyholders can access this cash value through policy loans or withdrawals, providing liquidity and financial flexibility
  • Higher premiums: Premiums for permanent life insurance are typically higher than those for term life insurance due to the lifelong coverage and cash accumulation features

Why do doctors need life insurance?

Doctors, like anyone else, need life insurance to protect their loved ones financially in the event of their death. Here are some specific reasons why life insurance is important for doctors:

  • Income replacement: Doctors often have high incomes that support their families and maintain their lifestyles. CI insurance provides a lump-sum payout that can replace lost income if they are unable to work due to illness.
  • Covering medical expenses: While Canada’s healthcare system covers many medical costs, there can still be substantial out-of-pocket expenses for specialized treatments, medications, or services not covered by provincial health plans. CI insurance can help cover these costs.
  • Business overhead and practice management: Many doctors run private practices. CI insurance can help cover business overhead costs, such as staff salaries, office rent, and equipment maintenance, ensuring the practice can continue operating even during the doctor’s absence.
  • Debt and financial obligations: Doctors often have significant financial commitments, including student loans, mortgages, and other debts. The lump-sum payout can help manage these obligations without causing financial strain.
  • Travel for specialized care: Some treatments are not available locally and require travel. CI insurance can cover travel and accommodation costs, allowing doctors to seek the best possible care.
  • Education and childcare: If the doctor has children, the payout can help cover education costs or additional childcare services during the period of illness and recovery.

Want to purchase the best insurance policies as a doctor? Speak to our experts!

Choosing the right insurance policies can be a daunting task, especially given the unique risks associated with the medical profession. 

Speak to our licensed advisors at PolicyAdvisor and discover the right insurance that protects you, your loved ones, and your practice!

Frequently Asked Questions

Do doctors get disability insurance?

Yes, doctors must have disability insurance because they face the same risk of accidents, injuries, or illnesses impacting their income as anyone else. Since a doctor’s ability to earn is their primary asset, protecting it with disability insurance becomes crucial.

Do doctors usually have life insurance?

Private practitioners must buy their own life insurance, while doctors working for health systems, hospitals, or hospital-owned practices may have access to employer-sponsored life insurance. However, these plans might only partially meet their needs. If that’s the case, they should think about adding another policy to supplement their coverage.

How much life insurance should a doctor get?

The amount of life insurance a doctor needs depends on factors like age, health, income, student debt, and, most importantly, the number of dependents. Supporting a family’s lifestyle and education can be costly, so insurance coverage should match these needs. However, a doctor without a spouse, partner, or children may not require any life insurance.

Are Canadian physicians covered by the government for medical liability?

Yes, Canadian physicians are protected by the Canadian Medical Protective Association (CMPA) for medical liability. The CMPA provides legal defense, indemnification, and risk management education to its members in the event of medical-legal issues.

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  • Doctors should consider various insurance policies to ensure comprehensive coverage for themselves, their families, and their practices
  • Disability and critical illness insurance are essential for protecting doctors' incomes and financial stability in case of illness or injury
  • Practice-related insurance, including overhead, interruption, property, and malpractice insurance, safeguards doctors' practices against unforeseen events
  • Life insurance provides tax-free lump sum payments to support dependents, cover debts, and ensure business continuity in the event of a doctor's death

By Jiten Puri
CEO & Founder, Insurance Advisor, LLQP
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