High Income Disability Insurance: Protecting $250k–$1M+ Earners

Your income is the engine of your lifestyle, savings, and legacy. If a sickness or injury stops that engine, even temporarily, traditional group LTD caps (often $10,000/month) and standard individual DI may leave a large gap. High Income Disability Insurance—sometimes called High Limit DI—is built to protect physicians, executives, business owners, entertainers, professional athletes, and other top earners who need benefits that keep pace with their pay.

At Diversified Insurance Brokers, we design layered disability strategies that can insure $30,000–$100,000+ per month of tax-efficient benefits by coordinating group LTD, individual DI, and supplemental high-limit coverage. We shop multiple top-rated carriers to structure own-occupation definitions, specialty coverage, and generous benefit periods—so your lifestyle remains protected while you recover.

Who Needs High Income Disability Insurance?

• Physicians & Surgeons – High earning specialists with precise, hands-on duties often require true specialty own-occupation protection and supplemental limits. See our niche page: Disability Insurance for Dentists (principles also apply to physicians and oral surgeons).
• Executives & Partners – Bonuses, K-1 income, and equity comp can be hard to insure with group LTD alone; supplemental layers help close the gap.
• Business Owners – Personal DI replaces your income; Business Overhead Expense (BOE) keeps the practice’s bills paid while you’re out.
• Entertainers & Athletes – Irregular income and career-specific risks often require specialty underwriting. Learn more: Disability Insurance for the Entertainment Industry.
• Self-Employed / 1099 Professionals – Without an employer plan, a customized mix of individual DI and high-limit supplemental coverage is essential.

Common Problem: The “Coverage Cliff” Above $250k

Most employers provide 60% income replacement up to a monthly cap (often $10,000–$15,000). For a $600,000 earner, 60% would be $30,000/month—but a $10,000 cap leaves a $20,000 shortfall. Individual DI might add another $10,000–$15,000, but many still fall well short of their actual take-home needs. High-limit DI fills that remaining gap so mortgage, tuition, savings, and lifestyle stay on track.

How We Build a High-Limit Strategy

1. Evaluate Existing Coverage: We review your group LTD (definitions, caps, offsets) and any personal policy riders.
2. Model Your True Need: We quantify monthly fixed expenses, savings goals, and taxes to set an appropriate replacement target.
3. Layer Policies: Coordinate group LTD, individual DI (own-occ), and supplemental high-limit benefits to your target—often $30k–$75k+/month total.
4. Own-Occupation & Specialty Language: Especially critical for medical and professional specialties where a partial impairment still prevents you from performing material job duties.
5. Future Increase & Residual Benefits: Protect your ability to grow benefits as income rises and get paid proportionally during partial disabilities.

Underwriting Options: From Streamlined to Guaranteed-Issue

Busy high earners want minimal friction. Depending on age, income, and case design, we can access:

• No-Exam / Simplified Issuance: For qualifying professionals, see No Exam Disability Insurance.
• Multi-Life Discounts: Practices and firms can often secure unisex rates, discounts, and Guaranteed-Issue Disability Insurance—no medical questions with modest participation.
• Special Occupation Definitions: Specialty own-occupation (e.g., surgeon, interventionalist, trial attorney, high-skill entertainer) with robust partial/residual riders.

Key Features to Consider

• True Own-Occupation: Pays benefits if you cannot perform the substantial and material duties of your occupation—even if you work elsewhere.
• Residual/Partial Disability Benefit: Replaces income if you’re working part-time or at reduced capacity due to disability.
• Catastrophic (CAT) Benefit: Extra protection for severe impairments that require ongoing assistance.
• Future Increase Options: Add benefit amounts later as income grows—without new medical underwriting.
• Retirement Contribution Rider: Funds a separate benefit to replace missed retirement plan contributions during disability.
• Benefit Periods: 5 years, 10 years, to-age-65/67, and some specialty to-age-70 provisions.

Tax Treatment for High Earners

Taxation depends on who pays the premium:

• Personally Paid Premiums: Benefits are typically received tax-free, maximizing the net income you keep.
• Employer-Paid Premiums: Benefits are generally taxable to the employee; supplemental individual coverage can help restore after-tax income.
• BOE Policies: Benefits reimburse business expenses and are typically taxable income to the business; the expenses paid remain deductible—netting out in practice. Details vary—coordinate with your CPA.

Case Study: Surgeon at $1.1M Annual Income

Objective: Secure at least $50,000/month after-tax benefits to protect lifestyle and savings goals.

• Group LTD: $10,000/month cap (taxable).
• Individual DI: $15,000/month (own-occ, tax-free).
• High-Limit Supplemental: $25,000/month (own-occ layered, tax-free if personally paid).
• Total Monthly Benefit: $50,000+ with strong specialty definitions and residual riders.

We also added BOE coverage to keep office expenses paid if a partial or total disability interrupts procedures for several months.

Special Situations We Handle

• New Attending Physicians & Dental Specialists: Future increase riders to match rapidly rising incomes; see Dentist DI.
• Entertainers with Irregular Cash Flow: Layered own-occ language plus residual benefits to account for partial impairments; see Entertainment DI.
• Practice Owners: Blend personal DI, high-limit supplemental, and BOE for a complete backstop.
• Group Carve-Outs: Partners and top execs often require carve-out layers above the standard employee LTD cap; consider Guaranteed-Issue DI when participation allows.
• No-Exam Paths: For qualifying incomes and ages, explore No Exam Disability Insurance.

How Much Coverage Should You Carry?

We start with your net “must-have” number: mortgage, tuition, taxes, insurance, savings goals, and baseline living costs. For most high earners, a target of 60%–70% of gross income—received after tax—is a solid benchmark. Because tax treatment varies by payer, we design your layers to maximize after-tax, spendable income.

What Drives Cost?

• Age & Health: Younger, healthier applicants secure the best pricing and can lock in future increase options.
• Occupation Class: Specialty medical and high-risk or highly physical roles typically price higher.
• Elimination & Benefit Periods: Longer elimination periods reduce cost; longer benefit periods increase it.
• Riders: Own-occ, residual, CAT, COLA, retirement contributions, and future increase add cost—but are often worth it for high earners.

Related Pages

• No Exam Disability Insurance
• Guaranteed-Issue Disability Insurance
• Business Overhead Disability Insurance
• Disability Insurance for Dentists
• Disability Insurance for the Entertainment Industry