As a doctor, the risks you are exposed to are almost exclusive to your profession. You face exposure to illnesses and diseases and face a higher risk of mental illnesses on a day to day basis. In addition to this, you also face losing a high income if anything were to happen to you and this is what makes income protection for doctors so important.
What is income protection insurance?
Income protection insurance is a monthly benefit up to 75% of your current income to cover you in the case of an accident, illness or major trauma. It replaces the majority of your income until you can return to work. If something happens and you can never return to work, it can replace your income until you are of retirement age.
Is there specific income protection insurance for doctors?
For doctors, there are a number of different benefit definitions that are important to understand. In addition to total disability coverage, doctors can take out needle stick cover as extra coverage.
- Total disability
- Opting for total disability cover will mean that you will receive monthly compensation if the claim is accepted
- There are three types of total disability definitions
- Duties definition – will receive compensation if at least one income producing duty cannot be performed
- Income profession definition – will receive compensation if they cannot earn more than 20% of income before being disabled
- Hours definition – will receive compensation if they cannot work more than 10 hours every week
- The disability covers offered by Australian insurers are beneficial to doctors if you are self-employed
- Needle stick cover
- Ensures that you are taken care of financially if you contract a blood borne illness due to getting pricked with a needle at work
- Needle stick covers are options but ensure a lump sum payment if you were to contract Hepatitis C, HIV or any other illness that can be contracted from the prick of an infected needle
- Doctors, as well as dentists, lab technicians, medical practitioners, physiotherapists, and chiropractors, are some of the professionals that can benefit from a needle stick cover
Does income protection insurance for doctors cover mental illness?
Yes, you are able to make sure your income protection insurance covers mental illness. It is important to assess this as part of your income protection insurance policy even if you have never suffered from mental illness in the past. Due to the high-stress nature of the profession medical professionals are often at a higher risk of not being able to work because of mental illness.
Is income protection tax deductible?
Yes, income protection policies are tax deductible.
How much will I receive?
There are two types of policies, agreed and indemnity. With agreed the insurer reviews your income at application time and agrees to pay 75% or a little bit more if you included the superannuation continuance option.
Indemnity policies are lower cost however the insurer reviews your average income at the time of your claim. If your income has fluctuated over the last two years, you may not get the full 75% of your current income.
Can I increase it the cover?
Yes, you can increase the cover as your income increases. All policies are indexed each year. If you experience a jump in salary, the benefit can be increased on the policy anniversary.
Some things to remember:
Basic compensation benefits will depend largely on:
- How much you earn
- Your eligibility
- The documents provided
- Health status
- Smoking status
- Extra-curricular activities
Income protection insurance often does not offer financial protection against loss of job unless stated so.
Income covers normally do not offer financial support to the family members if you pass away while the policy is active.
We understand that as a doctor you are faced with many unique risks at your workplace. We are happy to help you determine what income protection insurance policy will work best for you and your financial plan.