New AAFP Life and Disability Insurance Program for Third-Year Residents

Lilian White, MD
November 10, 2025

Approximately 1 in 4 adults will experience a disability before 65 years of age. The proportion of physicians who use their disability insurance is estimated to be approximately 1 in 7. It is not uncommon for residents and physicians to be either fully or partially denied disability or life insurance coverage because of preexisting health conditions. Timing and choice of policy are essential for obtaining appropriate insurance policies.

The AAFP Insurance Program recently announced a new option for third-year family medicine residents for term-life and disability insurance included in their American Academy of Family Physicians (AAFP) membership. Many residency programs cover the cost of AAFP membership for their residents, so this policy would come at no additional cost to residents. The policy includes $100,000 in group term-life insurance and $5,000 per month in long-term disability income coverage. In case of a permanent disability, the insurance covers up to $200,000 in student loan repayments. The life insurance policy is complimentary for 2 years, with the caveat that physicians must become dues-paying members of the AAFP after 1 year. Ongoing AAFP membership is not required to maintain the insurance. The benefit period may be extended to 67 years of age with premium payments after the complimentary period. The disability policy may be used to supplement an employer’s disability policy. No fees are assessed for canceling or reducing the coverage.

PGY3 residents may apply (with guaranteed enrollment) through December 31, 2025. Residents may choose to continue the policy upon graduation (ie, residents do not need to re-apply). Residents in Nevada are not eligible for the life insurance part of the program because of state-specific restrictions.

Many residency programs offer guaranteed standard issue (GSI) policies. GSI policies allow residents to apply for disability insurance without the usual review of medical records or a medical exam (which may result in partial or full denial of the policy). Pricing of GSI policies varies and may be more expensive compared with policies available through brokers. As mentioned, this new AAFP insurance program for residents may be continued at graduation, making it similar to a GSI policy in this detail. This is relevant because even commonplace problems (eg, such as seeing a therapist for stress during medical training, using a chronic medication for a well-controlled condition) may result in full or partial denial of the policy.

When looking for a disability insurance policy, it is generally recommended that physicians find own-occupation or specialty-specific policies because their income (and income potential) is typically one of their biggest assets. An occupation-specific policy benefit is contingent on the physician being able to work in their occupation. If the physician were unable to work as a physician but able to work in another occupation, the disability policy would apply, and the income benefit would be provided. This new AAFP Insurance program for third-year residents is specialty-specific, which takes own-occupation to another level of detail to the specialty itself and not only the occupation of being a physician.

A single disability policy may not be enough to cover a physician’s full income, making it necessary to consider additional policies or riders (such as those that adjust for cost of living with time).

An FPM article, A Practical Guide to Physician Disability Insurance, is available for additional details regarding disability insurance, such as appropriate riders to consider. Physicians that have been previously partially or fully denied for a disability or life insurance policy may consider re-applying if circumstances have changed. It is always recommended to talk with an insurance professional regarding your own insurance policies. The AAFP Insurance Program offers free consultations.