Wesley Sebacher, CFP®

Life insurance is an essential financial tool for physicians, as it provides a safety net for families in the event of untimely death. Physicians often have unique financial needs and earning potential, thus understanding the type of insurance and amount of coverage needed is crucial. In this guide, we’ll explore the various aspects of life insurance and how to determine appropriate coverage. 

Type of Insurance

Term Life Insurance 

  • Insurance coverage that provides a financial benefit upon an untimely death with no cash value accumulation.  
  • Term life insurance policy terms vary, usually 10, 15, 20 or 30 years and provide affordability over permanent life insurance.  

Permanent Life Insurance 

  • There are various types of permanent life insurances available. Such types include whole life, universal life, and variable life. These permanent policies provide coverage for the life of the insured. Cash value accumulation builds over time within the insurance policy to allow for a savings and investment component.  

Determining the Type of Insurance for You

Determining the appropriate life insurance policy will depend upon your financial situation, goals, and needs. Term insurance may be suitable if you’re primarily seeking income replacement to cover short-term financial responsibilities or providing for dependents. Permanent life insurance may be suitable if you’re seeking to build wealth over time, leave a legacy, or have a long-term financial strategy that includes estate planning and tax benefits.  

Calculating Your Coverage Needs

Calculating how much life insurance coverage you need as a physician is a crucial step. A life insurance capital needs analysis will be required to determine the appropriate amounts of coverage, which will include a variety of the following factors: 

  • Income Replacement: Starts with assessing your current and future income, including potential increases. Income replacement considers the years of financial support your family will require after your passing.  
  • Outstanding Liabilities: Account for any outstanding debts, including student loans, mortgages, and other liabilities.  
  • Educational Expenses: If you have children, factor in the cost of their education, including college tuition and expenses.  
  • Final Expenses: Include funeral and burial expenses. 
  • Estate Planning: If you have specific financial goals, such as providing a legacy, charitable donations, or estate and tax planning strategies, incorporate these goals into your coverage needs.  

Consult a Qualified Fiduciary

Consulting with a qualified financial professional and fiduciary will aid in determining the life insurance coverage appropriate for your financial goals. Determining appropriate coverage will include understanding your specific needs, comparing policies, terms, and provisions. Consider shopping from multiple insurance providers to find the best rates and policies.   

Review and Update

As life circumstances change, so can your life insurance needs. It is essential to periodically review your insurance coverage to ascertain your financial goals are continuing to be met. As you become financially independent, the need for life insurance can decline or may no longer be required to meet your financial goals.   


Life insurance is a crucial financial tool for physicians to protect their loved ones and achieve their financial goals. Determining the appropriate type and amount of coverage requires a thorough assessment of your financial situation and objectives.  

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