VA Disability Interaction With Disability Insurance Q&A

Posted on May 12, 2024 Updated on May 5, 2024

Someone emailed me and asked these questions, which I thought others could benefit from reading:

“How active should military doctors be about maximizing disability percentage at military separation? I think many military doctors view the disability payments as a sign of weakness or something to avoid (for example me I’m zero %), but the financial benefits of the high percentage disability are remarkable.

Are you aware of any resources that give tips to active duty doing what they need to do (documentation etc.) to ensure they are awarded a disability percentage commensurate with their disability? For doctors who plan to apply for private disability insurance (DI) after military separation, does a military disability rating hurt that application?”

Here was my answer:

“I think everyone should try to maximize their VA disability, but I don’t know how it might affect DI as a civilian. I CCed DI4MDs.com, and they’ll know.

I know service organizations assist with VA claims:

https://www.dav.org/get-help-now/va-benefits-help/
https://www.woundedwarriorproject.org/programs/benefits-services
https://www.vfw.org/assistance/va-claims-separation-benefits“

Here is what DI4MDs.com said:

“This is an excellent question and one that can create a problem and cause a loss of entitled benefits if not strategized for properly.

The main issues are military disability benefits are not based on a physician’s entire salary and a military physician will earn substantially more as a civilian and will need a higher level of disability insurance to protect that income.  I agree with Joel that you should maximize your VA disability because any condition that would qualify for VA disability will be excluded with private disability insurance companies and may even result in a declination.  Also, insurance companies have issue and participation limits for disability insurance and any VA disability benefits received will reduce dollar for dollar the amount of individual disability insurance you would otherwise qualify for based on income.  A general rule is you can obtain 50% of your income with disability insurance minus any benefits received such as the VA.  This is the calculation even though benefits for the condition you are receiving VA Disability for would be excluded.

A simple solution which we utilize to solve this lack of coverage is to obtain a disability policy while the military physician is young and healthy, usually early in their career, and include an increase option on the policy that guarantees when they need to increase coverage in the future such as when they complete their Military service, they can do so and have any conditions that have developed during their military career insured. 

Be happy to assist any military physicians and thank you all for your service.”