Specialist Income Protection for Dentists
If you’re employed by the NHS, there are some insurers that offer Dentists Sickness Insurance policies that are specially designed to work around the NHS’s unique sick pay scheme. While these policies are usually reserved for Doctors and Surgeons, there are some insurers that may offer you similar terms provided you work for the NHS.
These specialised policies provide cover which will pay out a proportionate benefit as soon as you stop receiving full sick pay to supplement your income. So if you get 6 months of full sick pay and 6 months of half pay, the benefit will kick in after 6 months to ‘top up’ your half pay.
However, these types of policies are not always available from every insurer and are best discussed with an adviser because of the complexities of split deferred periods.
NHS Sick Pay for Dentists
These policies benefit NHS employees because it allows them to set their deferred period to match the full length of their sick pay entitlement, reducing their premiums, while topping up their income regardless during the period of reduced sick pay.
If you are employed by the NHS, the maximum amount of sick pay you could expect to receive will change depending on your length of the service.
After 5 years of service, the maximum amount you’re entitled to will be 12 months of sick pay after 5 full years of service. However, you would only receive full sick pay for the first 6 months and for the latter 6 months provided with half sick pay.
If your disability is serious enough that you need to take a year or longer to recover, your NHS dental sick pay will run out and you may need to rely on savings or other means to get you through.
Sickness Insurance for Self-Employed Dentists
If you own your own dental practice and work through that as a corporate entity, you may want to consider Company Director Income Protection. This can take into account any salary and dividends from the business that you pay yourself through your own limited company.
Crucially, the policy is owned and paid for by the business, so premiums can be paid for by the business.
If you can’t work due to accident or sickness, Income Protection paid for by your dental practice will kick in to pay a monthly benefit back into the business. You then distribute these funds from your practice via your usual remuneration process.
The main difference between Executive Income Protection and Income Protection taken out personally is that it is owned and paid for by the business so should a claim arise any benefit would be taxed as income. Personal Income Protection sees the benefit paid tax-free because you’re paying the premiums from post-tax income.
Given the benefit from a corporate Income Protection policy is taxable, you can insure a higher proportion of your pre-tax income – up to 80% – compared to a personal policy.
How Much Does Dentist Sick Pay Cover Cost?
Dental professionals will pay different amounts for Sick Pay Insurance depending on their job role and a variety of other factors.
Given the different occupation risks we have put together the average cost of Income Protection for both a Dentist and a Hygienist of three different ages in the table below.
To come up with these premiums, we’ve assumed:
- The individual is a healthy non-smoker
- They want a benefit of £1,500 a month
- They’re looking for an 8 week deferral period
- Their cease age will be age 65
- They’re looking for long-term cover
- They want to guarantee their premiums for the life of the policy.