A Florida physician or dentist who owns a practice usually needs four layers: personal coverage sized to a high income, loan coverage for practice acquisition or build-out debt (lenders often require it), buy-sell coverage so partners can buy out a deceased owner's family, and overhead expense and disability coverage for the more likely risk of being unable to practice. Florida Statute 222.14 shields the cash surrender value of life insurance from the owner's creditors, which makes permanent coverage unusually useful for doctors in Florida.
We are licensed insurance brokers, not CPAs or attorneys. Treat the tax and legal points on this page as general education, and confirm them with your own CPA or attorney before acting.
On this page
Why practice owners are different
Practice owners combine three things underwriters and planners pay attention to: high income, significant debt, and a business that produces revenue only while the doctor is working. A typical Florida practice owner might be carrying a practice purchase loan, equipment financing and a building lease, while also supporting a household on a high income and paying down school debt. The practice itself is worth far less if the owner dies suddenly, because patients follow doctors.
The four layers
| Layer | Purpose | Usual structure |
|---|---|---|
| Personal life | Replace income for the family | Term, often 20 or 30 years, owned personally or by a trust |
| Loan coverage | Pay off practice acquisition, build-out or equipment debt | Term matched to the loan, collaterally assigned to the lender |
| Buy-sell | Fund the purchase of a deceased partner's share | Cross-purchase or insurance LLC for group practices |
| Disability and overhead | Keep the practice open and the household paid during a long illness | Own-occupation disability, business overhead expense, disability buyout |
Practice loans
Lenders that specialize in practice acquisitions commonly require life and disability coverage on the buying doctor, assigned to the lender. SBA-backed practice loans follow the SBA rules in does your SBA loan require life insurance. Apply early: underwriting a large policy can take weeks, and it is a common reason closings slip.
Group practices and buy-sells
In a two- or three-doctor practice, a cross-purchase agreement funded by policies the doctors own on each other is often the cleanest structure, especially after the 2024 Connelly decision raised questions about corporation-owned buy-sell policies. Larger groups often use an insurance LLC so each doctor needs only one policy. See cross-purchase vs entity redemption and the buy-sell funding calculator.
Make sure the agreement also covers disability and loss of license, not just death. A partner who cannot practice for two years is the more likely problem. See disability buyout insurance.
Florida creditor protection
Florida law is unusually protective of life insurance:
- Cash value: Florida Statute 222.14 exempts the cash surrender value of life insurance policies from attachment or garnishment by creditors of the insured, unless the policy was bought for the benefit of that creditor.
- Death proceeds: Florida Statute 222.13 exempts proceeds payable to a named beneficiary (other than the insured's estate) from the insured's creditors.
For physicians and dentists, who face liability exposure beyond what malpractice coverage may pay, permanent life insurance can hold savings that a judgment creditor generally cannot reach under Florida law. Courts have limits (for example, transfers made to defraud creditors), so this is planning to do in advance with an asset protection attorney, not after a claim. Details in Florida life insurance creditor protection.
Underwriting notes for doctors
- Income: carriers use W-2 and K-1 income from the practice; associates and new owners can often use contract income.
- Amounts: high incomes support large policies, and carriers ask for financial documents at higher amounts.
- Health history: physicians often have thorough medical records, which helps underwriters, but self-prescribing or treating yourself can raise questions.
- Disability: own-occupation definitions matter more for specialists than almost anyone; a surgeon with a hand injury can still work, just not as a surgeon.
Doctors leaving employed jobs for locums face a different checklist; see our guide to leaving an employed physician job for locums.
Frequently asked questions
How much life insurance does a doctor need?
Start with debts (practice loans, mortgage, school loans), add years of income replacement for the family, and add future costs like college. Many physicians end up needing several million dollars of personal coverage, plus separate coverage for practice loans and any buy-sell.
Is cash value life insurance protected from malpractice judgments in Florida?
Florida Statute 222.14 generally exempts cash surrender value from the insured's creditors, unless the policy was bought for that creditor's benefit. Fraudulent transfer rules still apply, so plan before any claim exists and work with an asset protection attorney.
Should a group practice use a cross-purchase or entity redemption?
Two or three owners often prefer a cross-purchase, especially after the Connelly decision. Larger groups often use an insurance LLC to keep the number of policies manageable. Your attorney should draft the agreement around the funding.
Start your life insurance request
Tell us what the coverage is for and who it would cover. For most requests we ask for each person's date of birth and sex so Erik can prepare for the call. We do not ask health or tobacco questions in this initial request. This is a request for help, not an insurance application or a promise of coverage.
Written by Erik Moran
Erik co-owns Moran Insurance Group with Amanda Moran and handles the agency's life insurance cases, from key person and buy-sell coverage to trust-owned policies. He works alongside clients' CPAs and attorneys, who make the tax and legal calls. More about Erik.
Sources
- Florida Statutes 222.14: exemption of cash surrender value of life insurance and annuities
- Florida Statutes 222.13: life insurance policies, disposition of proceeds
- Connelly v. United States, No. 23-146 (U.S. June 6, 2024), opinion text (Cornell LII)
- SBA SOP 50 10: Lender and Development Company Loan Programs
Moran Insurance Group is a licensed insurance agency. Our brokers are not CPAs, attorneys or tax advisors, and nothing on this page is tax, legal or investment advice. Tax figures and rules reflect our understanding as of October 2026 and can change. Coverage is subject to carrier underwriting and state availability. Confirm anything tax or legal with a licensed CPA or attorney before you act on it.