Income Protection for Doctors and Dentists

So who’s looking out for them? Income protection may provide you with peace of mind, so if something happens to you and you’re unable to work, you can still rely on a income (subject to policy terms).

What is income protection Insurance?

Income protection is kind of like a safety blanket for a portion of your salary. If you have an accident and suffer a partial or total disability, income protection insurance may cover you for part of your income if you’re unable to work. For example, let’s say you work as a surgeon. If something were to happen to your hands, you’d be unable to work. With income protection insurance you could get up to 70% of your pre-tax income, subject to the limits if your policy.

Every provider who has an income protection insurance product will likely have a different definition for what is considered partial and total disability, so it’s important to carefully read over the relevant Product Disclosure Statement before deciding to take out cover with a provider.

Why might doctors and dentists in particular decide to take out income protection?

Healthcare workers may be exposed to health and safety dangers every day, including blood borne diseases, contagious illnesses, back injuries, dermatitis, exposure to toxic chemicals, radiation and mental health issues.

That’s why it may be beneficial for healthcare professionals, like dentists and doctors, to consider income protection as one of the ways of potentially protecting their income. Like most insurance policies, income protection may only cover certain conditions/ injuries/ circumstances, so make sure you have a carful read over the relevant Product Disclosure Statement before deciding to take out cover.

How to know if income protection may be suitable for you?

Every person’s circumstances and needs are different. If you are unsure whether income protection is suitable for you, you may start by asking yourself some of the following questions:

• Do you and your family rely on your income as a health professional?
• Are you a self-employed health professional owner with on-going expenses?
• Are you paying off a mortgage or loan?
• Do you have any other debts?
• Would you be able to maintain your lifestyle if unable to work for an extended period of time as a health professional?

You could then speak to a financial planner regarding how income protection may help protect you or you could start by doing some research on your own. If you are unsure how much income protection you would need., you may start with looking at your monthly expenses and your monthly income, and go from there.? It is always important to check any other insurance policies you have that might be able to help cover ongoing expenses or medical bills, such as private health insurance, Total & Permanent Disability cover (TPD), or Trauma Insurance.

How much can income protection cost for health care professionals?

The cost of income protection for health care professionals depends on a number of factors, including:

• Age: similar to most insurance policies, the price generally goes up for health professionals as you get older.
• Gender: women currently pay more for income protection than men. This may be due to women making more claims.
• Smoking status: some insurance policies will ask whether or not you’re a smoker. This could have an impact on the price of your premium.
• Occupation: the cost of your income protection will also depend on your occupation and the risks involved. For example, a dentist may pay less than a doctor, who’s in hospital every day.
• Waiting period: The waiting period you select for your policy could determine the cost of your premiums. For example, if you opt for a shorter waiting period, this could increase your premiums.
• Benefit period: The benefit period refers to the period of time in which your insurer provides compensation as stated in the policy following a claim. Typically, the longer the benefit period, the more you may pay in premiums.
• Lifestyle: Even your hobbies may affect your life insurance premiums.

Is there a waiting period?

Similar to other insurance policies, there’s often a waiting period you need to complete before you can receive payments. The waiting period refers to the amount of time you are off work before you are eligible to receive claim payments (if your claim is approved). The difference here is that you generally get to choose the length of your waiting period. Generally, the longer the waiting period, the cheaper the policy. For income protection policies it can usually be between 14 days and two years.

What is a ‘benefit period’?

When you sign up to an income protection policy, you need to agree upon a benefit period. A benefit period is how long you’ll receive financial support after your claim has been approved. Most providers offer two to five years or up to a specific age. Longer benefit periods are more expensive, but they can also offer more protection.

What’s the difference between a ‘stepped’ and ‘level’ premium?

Income protection policies generally come with two different premium options: a stepped or a level premium.

• Stepped Premiums: are generally cheaper than level premiums when you first sign up, but every time your policy renews, your premium goes up. The amount you pay is usually based on your age and also the policy you’re on.
• Level Premiums: don’t increase based on age. They generally only increase if your insurer increases the cost of their premiums. With level premiums, you can expect to pay more from the outset.

There’s no right or wrong answer when picking what type of premium you want to go for. It is important to check the relevant Product Disclosure Statement as these premium definitions may differ between insurers.

What doesn’t income protection insurance cover?

Before signing up to a policy, make sure you’re aware of what you are and aren’t covered for. Here’s a list of things income protection generally won’t cover:

• Drug and alcohol related illnesses;
• Pregnancy;
• Self-harm;
• Illness or injury as a result of criminal activity;
• Accidents that occur in a country with a do-not-travel warning;
• Part-time workers 

Therefore, make sure you have a carful read over the relevant Product Disclosure Statement before deciding to take out cover, so that you are fully aware of any limitations and exclusions that may apply.

How do I find an income protection insurance policy?

Every provider’s income protection policy is different. As is everyone’s unique situation. For example, as a GP you may decide you need a different policy compared to a surgeon, dentist or a nurse. So it’s important to do your research and compare a range of different policies to find one which may be suited to you. At iSelect we’ve partnered with Lifebroker to help iSelect customers compare income protection policies. Click here to compare from Lifebroker’s range of policies and providers, or call today on 13 19 20.

Last updated: 27/07/2021