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7 Considerations for Physicians to Protect their Savings

As physicians transition from their resident salary to earning a full physician income, they often begin to think about how best to care for their finances.

At first, they may purchase a home and a few other assets, but the smart ones begin saving for retirement as early as possible.

As their savings begin to accumulate, they may wonder how best to protect their hard-earned money from tragic loss.

Here are the top seven considerations for physicians to protect their savings:

1. Life Insurance

Physicians with a family worry about what would happen to their family in the event of their untimely death. 

For this reason, investing in a good life insurance plan to take care of them when you can no longer do so is a very wise decision.

No one wants to think about when or how they could die but a doctor lives a very busy life with many risks involved. 

Of course, not all life insurance policies are created equal. You will want to ensure that you purchase a policy that will provide the most protection for your family.

Learn about how to go about buying life insurance here

2. LLC or Corporation

If you are a partner or owner of private practice, you may want to consider establishing an LLC or corporation to keep all business assets and personal assets separate.

This way, if your practice is being sued, the only assets that can be under attack are business assets. 

In this way, your home, your cars, and other assets, including your savings, cannot be touched for reparations. All you’ll need is a written LLC Operating Agreement to protect your company’s limited liability status by proving that the LLC is a separate legal entity. Here is the picture of the placement for reference:

3. Umbrella Policy

While many hospitals and practices provide malpractice insurance for their employed doctors, it is always wise for physicians to purchase their own extra insurance.

This insurance is called an umbrella policy, as it acts as an umbrella to cover any gaps in coverage from their employer-provided insurance.

This umbrella policy will also kick into effect if the malpractice insurance does not cover the full amount of the claim. 

4. Disability Insurance

Unfortunately, it is possible for physicians to become the patient. In the event of a tragedy that leaves you unable to continue working as a doctor, a comprehensive disability insurance policy will protect your income. 

Like life insurance, you need to know what you are looking for because every policy is different.

The highest quality disability insurance policy will be an “own-occ” definition of disabled and cover as much of your salary for as long as possible. 

The best way to find the right policy for you is to shop around and compare prices and policies.

5. Prenups

Marriage is one of the highest risks to a doctor’s income. During a divorce, a marriage mate can take a large portion of your assets. 

To protect yourself from this event, you can get a prenuptial agreement before you get married. This document will protect any assets that you had before getting married but any assets that you accumulated after will not.

Another option is to create a Domestic Asset Protection Trust where you can transfer assets. This will protect your assets from creditors and your marriage mate in the event of a divorce but still allow you to draw from this trust. 

6. Tenants by the Entireties

A good way to protect certain assets that are owned by both you and your marriage mate is by establishing them as “tenants-by-the-entireties”. 

This basically means that instead of it being owned half by you and half by your marriage mate, it is fully owned by both of you. 

This protects those assets from creditors or claims because since it is fully owned by your spouse as well, it cannot be claimed in a lawsuit. 

7. Retirement Planning

When you make a solid plan for retirement, you won’t have to worry so much about your savings. 

You’ll have most of your extra money tied up in your 401k, traditional and Backdoor Roth IRAs, and any other investment plan you put into place.


As a high-earning physician, you should not feel like your income is sufficient to protect you from financial ruin.

Physicians’ assets are always at risk and one bad lawsuit or divorce can change your financial situation drastically.

Taking these seven considerations into account before anything bad happens is the only way to truly protect your savings.