Everything you need to know about securing your income as a doctor
How does Income Protection for Doctors work?
Let’s look at the types of Income Protection available
What is income protection?
Income protection, or permanent health insurance, is a policy designed to cover loss of income for any medical reason. It pays out a proportion of your salary – income protection for doctors usually pays between 50% and 70% – if you can’t work due to accident, illness or injury. Think of it as your own personal sick pay.
There is no prescriptive list of illnesses or definitions that you need to meet in order to make a claim. You can make a claim if you’re unable to carry out the main tasks of your occupation and aren’t doing any other paid or unpaid work.
To manage claims and keep the cost affordable you will have a set waiting period before you can make a claim. This will be dovetailed into your existing NHS sick pay so that the transition is seamless for long periods of absence.
By main tasks we mean the things which can’t reasonably be left out of your role, or changed by you or your employer. This important cover is so valuable to protect your lifestyle by maintaining a substantial amount of income throughout a period of ill health or injury during your career.
It will be permanently in place should you need to rely on it for a long period or multiple episodes of ill health, giving you the financial reassurance that you’ll always have an income until your retirement age.
Why do doctors need income protection?
As a doctor or surgeon, you’ll know better than anyone else the risk of becoming unwell at some point during your working life.
As it’s a high-pressured job and you may be exposed to more illnesses than most, it may be that you face more periods of ill health than the average person. This is why it’s important to have a plan in place to protect your earnings and maintain your lifestyle.
Having cover in place could be even more important if you have financial dependents such as children or other relatives that rely on you. You may have a large mortgage or other debts which cannot continue to be repaid without any difficulty should you suffer ill health.
If this is the case, income protection is a way of making sure you could keep providing for your loved ones, even if you were off sick for a long time.
What income protection should doctors buy?
Income Protection is a specialist product and requires expert advice and consideration, which is why it’s best to speak to us if you’re a medical professional looking to protect your earnings. Your requirements could be different to other earners, due to the nature of your job, how your pay is structured and your sick pay entitlement.
It could be important, for example, to make sure you have the option to take a sabbatical and still be covered or have the definition of ‘own occupation’ as a surgeon, to make sure the policy would pay out when you need it to – rather than you being expected to move into a different role, if your health allowed it.
You may wish to change careers after suffering an illness and need specialist rehabilitation support to help achieve your goals. You may have a hobby outside of your career that could result in an unforeseen injury, fracture etc. that could impact on your career and ability to carry out your job.
Our specialist medical advisers can recommend the most suitable products for you. It is important to receive advice because some insurers offer products specifically designed for doctors, surgeons, and dentists, etc. This includes things like NHS sick pay mirroring, for example, income protection without HIV exclusions (so you’re not penalised for an occupational hazard).
- Income protection covers a proportion of your income if you can’t work for health reasons
- Doctors and medical professionals may face periods of ill health or injury throughout their working life – income protection protects them against their lost earnings
- Doctors may have unique requirements when buying income protection due to the nature of their job and their existing sick pay entitlement
- Some insurers offer specialist products for doctors – like NHS sick pay mirroring, sabbatical cover, and income protection without an HIV exclusion, fracture cover, parent and child cover
- Speaking to an adviser is best if you’re a doctor or other medical professional looking to insure your income
Do doctors need income protection?
All people are at risk of suffering an illness or injury preventing them from working and would need financial backup if their health stopped them from working for a long time – doctors included.
We all have financial commitments that don’t go away when we’re sick and these may well increase. Doctors work in a high-pressured occupation and are exposed to illnesses more than most, the chances of being unwell may be higher than average.
I took out income protection when I first qualified?
If you have taken out cover already, that’s great as you already understand how important it is, it’s important however to review your cover regularly and ensure it has kept up with your career progression and does what you expect it to. It’s likely things will have changed a bit since you left medical school. We can you review your existing cover free of charge.
Does the NHS offer income protection?
The NHS offers short term sick pay, not income protection – but many insurers offer income protection designed specifically for NHS workers. This kind of policy usually includes things like sick pay mirroring and sabbatical cover, and doesn’t come with an HIV exclusion, unlike most income protection policies, to account for the risk of occupational hazard.
NHS Doctors Sick Pay Scheme
How does income protection for doctors enhance your existing benefits
As a NHS doctor and a member of the NHS Pension Scheme you are entitled to a number of valuable additional benefits such as sick pay, life insurance and an ill health retirement pension.
It is important to note that the doctors sick pay and ill health pension are dependent on your superannuated salary and the number of years service that you have accumulated and therefore the benefit is limited in the early years of your career. To enhance your existing benefits have a chat to one of our advisers who will explain the options available to you.
What is NHS Sick Pay?
Your NHS sick pay benefits are phased in over a 6 year period from when you join the NHS Pension Scheme. The maximum benefit accrued after 6 whole years of service is 6 months leave on full pay and a further 6 months leave at half pay.
This table shows you how your NHS sick pay benefits are phased in.
| Time frame | Benefit |
|---|---|
| During the first year of service | One month’s full pay and (after completing four months’ service) two month’s half pay |
| During the second year of service | Two months’ full pay and two months’ half pay |
| During the third year of service | Four months’ full pay and four months’ half pay. |
| During the fourth and fifth years of service | Five months’ full pay and five months’ half pay. |
| After completing five years service | Six months’ full pay and six months’ half pay. |
Action Point At maximum benefit levels your income is only guaranteed for up to 1 years absence – Consider an income protection plan to enhance your cover. Why not research the market and get a quote today with our easy on-line tools?
What is NHS Life Cover?
As a member of the NHS Pension Scheme you are afforded life cover at the rate of two times your salary. However, the life cover is non-attributable meaning that if a mortgage provider requires life cover as a condition of your loan they will not take your NHS life insurance into account.
Foundation Doctors
Your salary is split into two elements, your basic salary and your on-call allowance. Your NHS Pension Scheme life insurance is calculated at the rate of twice your basic salary.
Consultants
A large part of your salary will be superannuated, and therefore will provide you with a higher level of life cover. There are parts of your salary that may not be superannuated such as extra programmed activities.
General Practitioners
Your life cover will be based on your career average re-valued earnings. This can be difficult to predict particularly if you are in the latter stages of your career.
Locum Doctors
You may not have any employment benefits
Do I get NHS Critical Illness Cover?
The NHS pension scheme does not provide critical illness cover.
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What is the NHS Ill Health Pension?
This benefit can commence after your sick pay ceases however there is no guarantee that an ill health pension will be granted as it is paid at the discretion of NHS Pensions and their medical advisers. An ill health pension could come into force if you are unable to work through sickness or illness. The amount you would receive is dependant upon your superannuated salary and the number of years service you have completed. The NHS offer enhancements to your service if you have completed at least 5 full years service.
Foundation Doctors
If you have less than 2 years service then you have no eligibility. You become eligible for enhancements after 5 years service. This will be calculated on your basic salary alone.
Consultants
As you are likely to have completed in the region of 10 year’s service the enhancements combined with a higher superannuated income could be a reasonable ill health pension. If you have part time service, or worked as a maximum part time consultant this will affect your year’s service, and ultimately your ill health pension.
General Practitioners
The ill health pension will be based on your career re-valued earnings and your years service. An estimate may be acquired upon the provision of specified information, this may then be used as a guide. Accurate information can be gained from the pensions agency. A draft letter for requesting this information is available on request.