Income Protection for Doctors and Dentists

How can income protection help doctors and dentists? 

As a doctor or dentist, you’re often responsible for improving the health of your patients. But who will be there to cover you if you’re unable to work due to sickness or injury? 

Income protection insurance can act as a kind of safety blanket for a portion of your salary. If you are unable to work due to partial or total disability, income protection may cover part of your income. 

Why do doctors and dentists need income protection? 

According to Safe Work Australia, the healthcare and social assistance industry has highest proportion of work-related injuries and illness, accounting for 19.1% of all serious claims for the 2021-2022 financial year. 

The medical profession comes with a number of unique risks, with healthcare workers often exposed to a range of diseases, illnesses and other safety hazards that may impact their ability to work. Given the risks, it can be particularly important for doctors and dentists to take steps to protect their financial security should they be unable to work.  

How does income protection work? 

Income protection insurance covers a large portion of your income in the event you’re unable to work due to illness or injury.  Income protection will generally cover up to 75% of your salary until you return to work or your benefit period ends.  

Common benefit periods are two to five years’ but some income protection policies cover you up to a specific age, often around 65. Depending on your income protection policy, you might also be subject to a waiting period that you choose at the beginning of your policy, which is the amount of time you have to wait until your payments kick in.  

Waiting periods can vary considerably but when comparing your options, it’s important to understand that shorter waiting periods and longer benefit periods generally result in more expensive premiums. 

How much does income protection cost for doctors and dentists? 

To give you an idea of how much income protection insurance could cost for medical professionals, we’ve pulled together a table that compares the monthly income protection premiums for a doctor, plumber and cleaner from several leading insurers available via our partner Lifebroker. 

Based on the figures below, you can see that income protection premiums generally costs less for doctors compared to plumbers and cleaners although of course this doesn’t take into account your personal situation.  

*Based on a 35-year-old non-smoking female from Brisbane, Queensland. $5,833 monthly benefit (70% of their income) with an annual income of $100,000. Benefit period of 2 years and a waiting period of 90 days. Comparison undertaken on 23 August 2024.  

Of course, it’s very likely that most doctors would seek a higher benefit than the $100,000 used in this example given they tend to have comparatively higher salaries than many other professions.  

What policy features might doctors and dentists wish to consider? 

Doctors and dentists are often exposed to a number of health and safety hazards, so it’s only fair that income protection policies for these professions cater to the unique risks that come with their job. 

Many income protection policies for doctors, dentists and other medical professionals offer additional features, like: 

• Needlestick Benefit: This feature provides a monthly benefit for any lost income when you’re diagnosed with a bloodborne disease as a result of an occupational incident,
• Bloodborne Disease Benefit: This feature provides a lump sum payment in the event you’re infected with a bloodborne disease, like HIV or Hepatitis B or C, as a result of an occupational incident,
• Own Occupation: This typically means you’re covered if you’re unable to perform tasks specific to the occupation or specialty you’re employed in at the time of your claim. It’s worth noting that you can only select your own occupation for the first two years of your policy. After this point, it will revert back to any occupation.   

It’s important to note that these features aren’t available with all income protection policies. Please refer to the relevant product disclosure statement (PDS) for more information on policy features and their definition of the product feature. 

Is income protection insurance tax deductible? 

Generally, yes, income protection insurance premiums are tax deductible. According to the Australian Taxation Office (ATO), only the premiums you pay to protect your income (salary and wages) may be tax-deductible. 

It’s also worth noting that if you receive an income insurance payout under, you must declare it in your tax return.  

Do I need income protection if I’m eligible for workers’ compensation? 

Even if you’re eligible for workers’ compensation, it’s often still worth taking out income protection to ensure you’re covered if you’re unable to work due to injury or illness.  

Workers’ compensation typically covers injuries and illnesses that are directly work-related. On the other hand, income protection insurance may cover a broader range of situations, including illnesses or injuries that occur outside of work. So, if you come home from a holiday with a broken wrist that prevents you from working for a period of time, income protection may cover you while workers’ compensation won’t. 

Don’t I already get income protection as part of my superannuation? 

Most super funds offer their members with income protection or salary continuance cover. With that said, it’s important to check in with your super fund to see what insurance comes default and whether this cover is adequate based on your professional and personal circumstances. 

While having default income protection through your superannuation can be less hassle than taking out a separate policy, the level of income protection cover offered by super funds may  be lower than what you can get directly from a life insurer. Not to mention, insurance cover provided as default through super may not be tailored to your individual circumstances.  

Where can I find and compare income protection? 

At iSelect, we’ve teamed up with Lifebroker to help you compare income protection insurance policies from a range of leading life insurers.