A TPMG Physician’s Guide to Disability Insurance: Protecting Your Income and Your Future

As financial advisors, we are often asked about disability insurance and whether it’s truly necessary. Our answer is always the same: for high-income professionals (like physicians), it’s not just a nice-to-have—it’s a must-have. Think of disability insurance as a safety net that ensures your financial well-being if the unexpected happens.

Here’s a simple, straightforward guide to help TPMG (The Permanente Medical Group) physicians understand their disability insurance options and make confident choices.

Why Disability Insurance Is a Must

Imagine losing your ability to work and earned income due to a disability. How would that impact your lifestyle, your family, or your long-term financial goals? It’s a tough scenario to think about, but the statistics don’t lie: According to Social Security statistics, approximately 1 in 4 of today’s 20-year-olds will become disabled before reaching retirement age.1

As a physician, your income supports more than just your day-to-day needs—it’s the foundation for your future. That’s why disability insurance is critical; it protects your income so you can focus on recovery without the added stress of financial strain.

Your Disability Coverage Options at TPMG

TPMG offers two excellent long-term disability (LTD) insurance plans:

  • 50% of monthly earnings (up to $20,833 per month)
  • 60% of monthly earnings (up to $25,000 per month)

While both are solid choices, the 60% income replacement option is usually the better bet. Yes, it’s a bit more expensive, but it provides more robust coverage—and in a situation like this, peace of mind is priceless.

Key Features of TPMG’s Disability Policies

Own Occupation Definition Offers Broader Protection

This is an important coverage enhancement which increases the protection for you and your family. TPMG’s disability policies are “Own Occupation” polices meaning you’re covered if you’re unable to perform the duties of your specific job. This is far superior to typical “Any Occupation” policies, which require that you be unable to work in any job to qualify for benefits.

Tax-Free Benefits

How premiums are paid plays a significant role in how benefits are taxed. Here’s the breakdown:

  • If you pay the premiums (via payroll deductions) for your TPMG benefits, any benefits you receive are tax-free.
  • If your employer pays the premiums, benefits are taxable.

Fortunately, TPMG’s policies are employee-paid, meaning any benefits you receive will be tax-free. For example, a tax-free 60% income replacement could come close to matching your regular take-home pay, depending on your tax bracket—a crucial detail that makes this coverage even more valuable.

Supplemental Individual Disability Insurance

Need more coverage? TPMG has you covered with an optional Supplemental Individual LTD policy through Unum. This add-on offers:

  • A 25% discount through age 65.
  • W-2-based benefits, not prorated on your base salary.
  • Portability, so you can take the policy with you if you leave TPMG.

For those looking to increase their safety net, this supplemental policy is a fantastic option with added flexibility and affordability.

Protecting Your Financial Future

Disability insurance isn’t just about covering worst-case scenarios—it’s about securing your financial stability and ensuring you can continue to pursue your goals.

Protect your income. Protect your future. And enjoy the peace of mind that comes with knowing you’re prepared for whatever life may bring.

Personalized Wealth Management for Kaiser Permanente® Employees and TPMG Physicians

For over 30 years, Capital Advantage has specialized in helping Kaiser Permanente® (KP®) and The Permanente Medical Group (TPMG) employees navigate the intricacies of their robust, and often complex, benefit plans. We design personalized financial plans and investment strategies tailored to your unique needs to help you make the most of your benefits while working toward long-term financial success.

For more information on Capital Advantage’s services visit: Kaiser/TPMG Employees – Capital Advantage, Inc. or call (925) 299-1500 to contact one of our advisors for a no-cost initial consultation.

Source:

  1. https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf

Disclaimer: Capital Advantage, Inc. is not affiliated, associated, authorized, endorsed by, or in any way officially connected with Kaiser Permanente® or TPMG (The Permanente Medical Group)

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The Author: Capital Advantage’s Financial Advisor Team

Capital Advantage’s financial advisors, Ian Burkhard, CFP®, CPA, Ian Castille, CFP®, Jason Terhune, MA, CIMA®, CFP®, and Donna Zinman, CRPC®, are dedicated to providing our clients with relevant and timely insight into key financial planning topics.