Income Protection for Doctors
An income protection plan for doctors works by providing a replacement salary should the doctor be unable to do their work due to an illness, or injury in the workplace. A monthly payment known as a premium is made to the insurer for them to offer this protection.
The Main Benefits of Doctors Income Protection Insurance
Income protection insurance is a consideration if you are both a medical professional working for the NHS or working in the private sector. There are five key benefits why you should consider taking out the cover:
- All profits from an income insurance plan come tax-free from UK income tax
- An income protection plan can be set up to protect you until you can return to the workplace or until your retirement if it is no longer possible to work
- The provision of a replacement salary ensures that you can maintain your lifestyle until you can return to the workplace
- Policies are flexible and can continually amend to keep up with changes in your professional and personal life
- Depending on the insurer, up to 70% of your regular salary can be maintained should you be unable to work
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Why Do Doctors Need Income Protection?
The risks of working as a medical professional vary widely, and the arrival of the Covid-19 pandemic has significantly increased these risks. An NHS doctor or surgeon treating infectious diseases has a different risk profile than a GP giving standard treatments and consultations. A doctor may be unable to work due to exposure to hazardous chemicals, psychological issues relating to the demands of the profession or musculoskeletal problems caused by bad posture in the workplace.
The many risks affecting a doctor as a profession can result in a doctor being unable to work for a time or having to work at reduced hours, all of which have a financial impact.
Is Income Protection Insurance Appropriate for You?
Only you, as a doctor, can answer this question, but to guide you on the right path, consider the following points that may be relevant to whether income protection insurance is appropriate for you. Also, take into consideration whether you are a self-employed doctor in private practice or an NHS doctor.
As a medical professional, you may have a mortgage, a family, and children in private education. Even for single doctors, financial commitments may mean that being unable to work for a period due to an accident or illness in the workplace can lead to financial discomfort.
Do you have substantial savings that will sustain you, as well as a family, if you are unable to work for perhaps a year or even more?
Supportive Family Members
If you are unable to work for a time, do you have another family member who can take the strain off the family finances or are you the sole breadwinner?
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Income Protection for the NHS Doctor
If you are a doctor working for the NHS, depending on your length of service, salary protection is part of an NHS contract should you be unable to work for a time. A doctor with more than five years of service in the National Health Service should expect to receive 12 months of NHS sick pay, with the first six months on full pay followed by six months on half-pay.
For income protection, it means a policy can offset against the NHS sick pay period with the deferred period put in place to commence a year after an initial claim takes place. This means the income protection policy activates when NHS sick pay stops paying you. It helps reduce the cost of monthly premiums.
Income Protection for the Self-Employed Doctor
A self-employed doctor working in private practice would only be entitled to the UK government sickness insurance that brings a benefit of less than £100 per week for 28 weeks if they were not able to work. It is not a viable option for maintaining any reasonable living standard.
How Can Insurance Hero Help You?
Insurance Hero is a provider of income protection policies and other associated types of cover to doctors. Here are four main ways in which we can help you:
- Our staff members are experts in income protection policies for NHS doctors and other professional medical occupations. Through experience, our team know intimately the policy requirements of both NHS doctors and those working in the private sector. With a direct email and a direct telephone number, you will never have to wait in a call queuing system with Insurance Hero – our service is personalised.
- Here at Insurance Hero, we are an entirely independent insurance broker. As we do not tie to any insurer, it means we can offer an impartial service and advice where you get a policy that tailors carefully to your needs at a competitive price.
- Insurance Hero is a caring team that will support and provide advice to you throughout the claims process and provide you with an efficient service to assist a rapid payout.
- Insurance Hero, as a broker handling large policy volumes, will have more negotiating power than if you apply for an income cover directly with an insurer.
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Available Features in an Income Protection Insurance Plan
We aim to simplify doctors’ income protection for you. It is not complicated insurance to grasp, but breaking down all the elements, will help you understand both standard and additional features which may be appropriate to your circumstances. You can then run through confidently with an insurance broker to help mould a policy that aligns closely with your needs.
Standard Features in an Income Protection Insurance Plan
The deferred period relates to the time lapse between when a claim takes place and when a replacement salary starts. It is key to get it right at the beginning of a policy, and a specialist broker can guide you through this. If you are an NHS Doctor, consider the NHS sickness insurance policy where full payment takes place for six months and a half pay for the next six months. It would make sense for the deferred period to extend to a year from the moment you stopped working. The longer the deferral period, the lower the premium level is.
Cease age is your age at the end of a plan, typically aligned with either a retirement age date or the end of a significant financial commitment such as the repayment of a mortgage. The older you are at the policy maturity date, the more expensive the plan becomes.
The Insurance Hero team is looking forward to receiving your call on 0203 129 88 66, where we can guide you through the best options to put in place an income cover that closely matches your professional and personal needs.
Length of the Claims Period
Two lengths of protection policy are available, a short term and long-term plan:
A long-term policy is a more expensive option in terms of a monthly premium. Still, it will provide coverage in the form of a regular salary until you can return to work or, if never able to return to work, until the age at which you will retire.
A short-term policy has a time limit upon which a replacement salary pays out. It can be set from between one year and five years by when you would have to return to work, or the income protection benefit will stop.
The replacement salary that is received when a claim is approved is known as the sum assured. Under an income protection policy, the sum assured is rarely more than 70% of your full wage. Income protection insurance for doctors’ plans aims to protect you until you can return to work. The intention is not for you to be better off than if you were working.
An income insurance policy will offer three types of index options, which result in either an increase, decrease or constant level of cover:
- With an increase in cover, the sum assured will increase with the cost of living, typically measured with either the retail price index (RPI) or the consumer price index (CPI).
- The decreasing cover sees premiums and the sum assured reduce over time. Often this type of protection will be aligned with a mortgage which diminishes over time until it is paid off.
- The level cover sees the sum assured to remain the same throughout the policy.
Income Protection Insurance for Doctors: Premium Options
The premium involves calculations by an underwriter using information from a client fact-finding questionnaire allowing an understanding of the extent of your doctor’s activities and combining it with sophisticated algorithms.
Premiums typically pay out monthly, and there are three options:
- Guaranteed premium: With a guaranteed premium, the underwriter is unable to change the cost of cover over the policy duration. Only the policyholder themselves can change the policy. This type of premium can be cost-effective if it is taken out by a younger policyholder who has a clean medical history.
- Age-banded premium: As a doctor gets older, the likelihood that they will become increasingly susceptible to illness increases and, consequently, be unable to continue working due to ill health or an accident. Age-banded premiums increase incrementally over time, being cheaper at the outset of the policy.
- Reviewable premium: The level of premium can be reviewed at any time by the underwriter, allowing an upward adjustment of the monthly premium payment. With periodic revisions, a reviewable premium, although starting as an economical option, will be more expensive over the lifetime of the policy.
Optional Policy Features
Five main optional features are available as part of a doctor’s income protection policy that is useful to be aware of and may be relevant to your circumstances:
- Policy pausing: If you are unemployed, a plan will not pay out if there is an incident. If you do find yourself unemployed or in-between jobs, an income insurance policy can be frozen until you can return to the workplace.
- Death benefit: Should you die when in receipt of an income protection benefit, an optional feature that can be taken out with a policy is a death benefit. Your dependents will receive a lump-sum payment upon your death.
- Involuntary redundancy: A standard income policy will not provide cover for redundancy. Some insurers, however, can, upon a specific request and at a higher cost, include protection should you be made redundant.
- Childcare benefit: If you are unable to work, a childcare feature will provide a fixed amount per child to be used for expenses such as increased child-minder or nursery hours
- Specified injury benefit: At the policy outset, it can be possible to specifically include both injury and trauma in terms of a policy. If you cannot work due to the inclusion, a further payment on top of a standard replacement salary is due.
What Is Covered Under Doctors Income Insurance Protection?
An income protection insurance for doctors policy does not serve as a blanket green light for an insurer to pay out, and a plan must be carefully thought out at the start to make sure it aligns with a doctor’s professional and personal circumstances.
Not being able to do your job has different implications, and it needs to be reflected correctly in the policy. Do you need an insurance policy that, when you return to the workplace, will require you to:
- Undertake any type of paid employment
- Only undertake your specific job.
- Only undertake a job that you are qualified to do
All three of these different variations will impact the cost of cover, with the most expensive premium reserved for returning to full-time employment but in the specific job you are qualified to do.
Specific policies allow for a proportionate payment which will top up your salary if you return to the workplace but in a lesser paid role.
Non-coverage Under Income Protection Insurance
A claim rejection may occur if it does not match qualifying definitions in the policy. Four areas where an insurer will not pay out are the following:
- Both childbirth and a pregnancy
- Where drug or alcohol abuse is stopping you from doing your job
- Participation in dangerous activities such as extreme sports
- The non-declaration of pre-existing medical conditions at the start of a policy
Insurance Hero has a team of brokers that are experts in providing income protection for any doctor and other medical professionals. For more information on how we can help to provide you with financial security, call the team on our direct line at 0203 129 88 66 for a free quote.
Income protection is an insurance that doctors, whether working for the NHS or in private practice, should give consideration. With the arrival of Covid-19, the risks of being unable to work have increased.
Income protection insurance for doctors provides the financial security of a regular salary, allowing you to concentrate on caring for your patients with the knowledge you and your loved ones are financially secure.
At Insurance Hero, our professional team will be able to offer you a number of suitable policies to compare so that you can choose the one you find the most appropriate for your case. Give us a call today at 0203 129 8866 or fill out our short no-obligation quote.