By Jason Goldenzweig · Co-owner, DoctorDisabilityQuotes.com · Last updated: May 12, 2026
Disability Insurance for 1099 Physicians and Locum Tenens
If you're a 1099 physician — locum tenens, independent contractor, telemedicine, partnership distributions, or solo practice owner — you need individual disability insurance more urgently than your W-2 colleagues. Why? Because group long-term disability coverage from a hospital or health system only applies to W-2 employment. Your 1099 income is unprotected unless you carry your own individual policy. Here's what underwriting looks like for 1099 physicians and how to structure coverage.
Individual DI essentialNo group LTD safety netIncome docs flexibleMulti-state friendly
The Short Version
Why 1099 Physicians Need Individual DI Most
W-2 employed physicians usually have some baseline coverage through group LTD (typically 60% of base salary, taxable, with weak definition of disability after 24 months). It's not great, but it's a floor. 1099 physicians have nothing. No employer means no group LTD. Your only protection against income loss from disability is whatever individual coverage you carry. For many locums and independent contractor physicians, this is a quietly enormous gap that doesn't become apparent until something happens. Additionally, 1099 income is often higher than W-2 equivalent ($300/hour locum rates vs. $250K W-2 salaries are common), so the financial exposure is larger. The good news: 1099 income is fully insurable under individual DI — carriers accept Schedule C income, K-1 partnership distributions, and 1099 contractor payments, just with slightly different documentation requirements.Income Documentation for 1099 Applications
Underwriters require income verification to determine the maximum benefit they'll offer. For 1099 physicians:- Tax returns: typically the prior 2 years of personal tax returns including Schedule C (sole proprietor), Schedule E (partnerships), or K-1s (S-corp or partnership distributions). Some carriers will accept 1 year for established physicians; the threshold varies.
- 1099 forms: the actual 1099-NEC forms from each payer can substitute for Schedule C in some cases.
- CPA letter: for newer 1099 arrangements, a CPA letter projecting annualized income based on year-to-date earnings is sometimes accepted.
- Income averaging: carriers typically average the prior 2 years for benefit calculation. If income is rising rapidly (common for new locums), some carriers will use the higher year.
Multi-State Practice and Locum Tenens
Locum tenens and traveling physicians often practice in multiple states throughout the year. This rarely affects DI underwriting because individual DI policies are issued based on your state of residence (not where you work). Once issued, the policy applies regardless of where you're practicing. A few considerations specific to multi-state 1099:- State of residence determines pricing. If you're domiciled in a state with lower DI premiums (Texas, Florida), you may get better rates than if domiciled in a high-cost state.
- Broker licensing. The broker placing your policy must be licensed in your state of residence. DDQ is licensed in 35+ states.
- Telemedicine income. Treated as standard 1099 income for underwriting. Geographic location of patients you treat doesn't affect the policy.
- Mid-year residence changes. If you move states, simply notify the carrier — coverage continues uninterrupted.
Frequently Asked Questions
I'm mostly W-2 but pick up some moonlighting 1099 — can I cover that separately?
You don't need separate policies — individual DI covers all earned income from your profession. The carrier underwrites based on your total earned income from medical practice, regardless of employment status. The application will document both income streams, and the benefit cap reflects the total.
What if I've been a 1099 for less than 2 years?
Some carriers require 2 years of 1099 income history; others will accept 1 year, especially for physicians transitioning from W-2 to 1099. For physicians newly into 1099, structuring the application carefully and choosing the right carrier matters. We work with several carriers that accept newer 1099 income, and we help select the best fit.
How do business overhead expense (BOE) policies fit in?
BOE policies are separate from individual DI and cover business operating expenses (rent, staff salaries, utilities) if you're disabled — they're relevant for solo practice owners and independent partners. For pure locum tenens or telemedicine physicians without their own business overhead, BOE typically isn't needed; for solo practice owners, BOE is often essential.
Do I need a buy-sell agreement DI policy?
Only if you're in a partnership with formal buy-sell provisions. The buy-sell DI policy provides funds for the remaining partners to buy out your interest if you become permanently disabled, executing the buy-sell agreement. This is separate from personal income-replacement DI and is structured around the partnership terms.
Have a Question About Your Specific Situation?
Disability insurance underwriting depends on your specific facts. We work with physicians one-on-one to identify the right carrier and policy structure for your situation. Call us at 1-888-972-0024 or request a quote.
Further reading & authoritative sources
- NAIC: Disability Insurance — regulatory framework
- Council for Disability Awareness — disability statistics and risk data
- American Medical Association — physician practice resources