Income Protection Insurance for Doctors

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08-05-2021

There are income protection policies specifically for doctors which insure a proportion of your wages against the risk of accidents or sickness that prevent you from working and earning an income.

  • It pays out a monthly tax-free income if anything medically prevents you from working as a doctor.
  • It can be used to cover your core outgoings – everything from your mortgage / rent, bills and utilities to groceries and car running costs.
  • Insure between 50% and 70% of your pre-tax (gross) earnings depending on your insurer.
  • Certain providers offer unique features medical professionals find valuable such as no HIV exclusions, NHS sick pay mirroring and cover if you decide to take a sabbatical.
  • It can cover you if you work as an employee for the NHS, as a locum or as a partner in your own practice.

Most importantly as a traditional long term protection policy which is fully medically underwritten it is there to protect you when you need it most. Leading insurers Zurich and Vitality paid out over 96% of valid Income Protection claims in 2019.

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What Does Doctors Income Protection Cover?

Sickness insurance is designed to protect against any medical eventuality (subject to your pre-existing medical history) that prevents you from working.

This might include:

  • Accidents and bodily injuries
  • Sickness and periods of ill health.

You can add on optional Unemployment Insurance for cover against the risk of forced redundancy.

Unemployment Cover

Redundancy Insurance is a short-term protection against the risk of forced unemployment. It will pay out a monthly income for a maximum of 1 or 2 years if you lose your job through no fault of your own. It’s an optional extra some doctors choose to add to their Income Protection.

Making Sure You Get Own Occupation Cover

It’s important to ensure that, as a doctor, you take out protection that covers you in your own occupation so the policy pays out for anything that medically prevents you doing your specific job.

There are cheaper policies which cover you under lesser definitions, such as suited occupation cover. To claim on a suited occupation policy, you have to be so unwell you can’t work in your current job or any job that your skills and experience make you suited for.

For instance, a doctor may no longer be able to practise medicine due to illness or injury but may be well enough to teach medicine and so could potentially not receive a payout under a suited occupation policy.

Does It Cover Pre-Existing Conditions?

All insurance companies ask health questions when you apply. They particularly want to know about health conditions you’ve had in the last 5 years. If you disclose health concerns, the insurer might:

  • Cover your illness on standard terms (so you won’t face any difference in the cost of premiums or policy terms than a healthy person)
  • Cover the condition for an additional premium
  • Exclude the condition but offer a date at which it will consider reviewing the exclusion
  • Exclude your illness entirely (perhaps with a premium discount to compensate).

Speak to an expert adviser, such as one of the team at Drewberry, if you have an ongoing illness you need to discuss.

We’ll use our direct access to the underwriters at every UK insurer to find you the most competitive terms given your pre-existing history. Call us on 02084327333 or email help@drewberry.co.uk.

Are There Any Exclusions?

As with most insurance, Income Protection has a few standard exclusions that apply to everyone. For example, most policies don’t pay out for an illness or injury sustained:

  • In pursuit of criminal activity
  • From illegal / illicit drug use, substance abuse or alcohol misuse
  • During foreign travel to areas of active internal conflict, high terrorism risk, political instability or countries the Foreign and Commonwealth Office (FCO) has advised against visiting.

However, apart from these, there are few standard exclusions. Instead, insurance companies base coverage on your pre-existing history.

Why Is Income Protection Important?

Whether or not you need Income Protection depends on your circumstances. However, you should weigh up the risks involved in having no protection and consider how you’d cope without insurance.

Read why our client Dentists Rajpreet took out chose Income Protection here →

The Incapacity Risk…

The risk of illness or injury is higher than many people think. For example:

Could I Use My Savings?

While some people have enough savings put by if they ever had to take several weeks off sick, this isn’t true for everyone. For example:

What About State Benefits?

The main government benefit if you’re unable to work due to illness or injury is Employment and Support Allowance (ESA). This starts at £74.35 per week for the over-25s. For many people, this wouldn’t make much of a dent in their pressing financial needs if they couldn’t do their job.

While other state benefits are available, your eligibility for them depends on the severity of your disability and other circumstances. Even if you are entitled to them, they rarely replace all your lost income.

What About NHS Sick Pay?

It’s true that NHS doctors, surgeons, nurses, midwives and other such workers get generous sick pay from their employer.

After 5 years of service, the NHS offers up to 6 months off with full pay and 6 months with half pay if you’re ever ill or injured.

This is more than many other employers offer, but still might not be enough. Could you maintain your outgoings when your income halves?

And after 12 months, when the NHS stops paying out entirely, what happens then? As medical professionals, you no doubt see the real-life consequences of severe, long term illness, injury and disability every day and are well aware of such risks.

How Does Income Protection for Doctors Work?

There are several personal and policy factors that you must consider before setting up Income Protection. These will all have an impact when you come to calculate the cost of cover.

How Much of My Income Can I Insure?

With most insurers it is possible to insure between 50% and 70% of your gross (pre-tax) personal earnings as a maximum. However, you may not need to insure yourself for the full figure.

Doing so will naturally increase the cost of Income Protection. If you limit cover to only your essential financial outgoings premiums will be cheaper.

It’s important to note that you don’t usually need to worry about your benefit being taxed. With a personal plan the monthly premiums are paid from post-tax income and so any payout is paid tax-free.

What is the Deferred Period?

When setting up Income Protection, you will need to select a deferred period, which is the length of time you will need to be unable to work in order to begin claiming your benefits.

Setting a longer deferred period can bring the cost of your policy’s premiums right down, so it makes senses to set to avoid a short deferred period if you don’t need one.

It is important that you check your employment contract to understand how much sick pay you are entitled to. For NHS doctors and surgeons, sick pay entitlement usually rises with length of service.

This means you can match your doctors sick pay entitlement to your Income Protection policy and only have the Income Protection kick in when necessary after the sick pay ends.

When Should I Set My Policy’s Cease Age?

This refers to the age at which your policy will end.

It is usually set to a point in the future where you won’t need the cover anymore, generally because you’ll have retired and have other vehicles to fall back on, such as pensions.

The higher you set the cease age of the policy – some insurers will allow you to set the cease age as high as 70 – the more expensive cover will be, so it pays to think carefully about how long you’ll truly need protection for.

How Long Should My Claims Period Be?

While a short term insurance policy will reduce your premiums, it may not provide the cover you need.

Aviva reported that the average Income Protection claim length they saw in 2017 was 4 years 33 weeks. In comparison, a typical Short Term Income Protection policy will pay out for a maximum of 1 or 2 years.

Meanwhile, Long Term Income Protection will continue paying benefits right up until you reach retirement age if you’re so unwell you can never work again.

This means that if you develop a debilitating medical condition that prevents you from working, you can claim for as long as you need to with no worry that you will be forced back into work before you have completely recovered.

Which Premiums Should I Choose?

There are three types of premium options to consider when choosing Income Protection Insurance:

  • Reviewable premiums
    Can be ‘reviewed’ as the insurer sees fit, which means that they may rise in cases where the insurer has seen a spike in claims or based on economic factors. Such premiums will start out cheaper but are then reviewed upwards and often therefore work out more expensive over the life of the policy.
  • Age-banded premiums
    Age-rated premiums also tend to work out cheaper to start off but then rise each year. Unlike reviewable premiums, age-banded premiums can only rise by a preset amount laid out in your policy. These increases are solely linked to your age and the growing risk of you claiming as you get older.
  • Guaranteed premiums
    There are usually a little more expensive initially, but the insurer cannot adjust them over the life of the plan unless you yourself make any changes to the policy. This generally means guaranteed premiums work out cheaper over the life of the policy, especially if you took out cover when you were young and healthy, as premiums are locked in from the start and can’t change with time.

The Importance Of ‘Own Occupation’ Cover

There are three main definitions of incapacity that insurers use to decide whether or not you are unable to work:

  • Own occupation
    Covers you in your specific job role. If you can’t do the day-to-day activities involved in your job due to accident or sickness, you can make a claim on your Income Protection policy.
  • Suited occupation
    Covers you only if you can’t do your own occupation or any occupation that you’re suited to. So for example while a surgeon with a hand injury couldn’t be a surgeon, they may not be able to claim because they’d still be well enough to teach medicine.
  • Any occupation / work tasks
    The most difficult definition of incapacity to claim on, you’ll only be able to claim if you’re so disabled you can’t work in any job or perform a set series of task crucial to most jobs, such as signing your name.

Policy Features Specifically For Doctors

Some insurers offer features specifically for medical professionals which include:

  • No HIV exclusions if you contract it through a workplace incident
  • NHS sick pay mirroring, allowing you to extend your deferred period and save money by working alongside the length and amount of sick pay you get from the NHS.
  • Sabbatical cover, where you can ‘pause’ the policy if you decide to work, study or volunteer abroad

NHS Sick Pay Mirroring

If you are a newly qualified or junior doctor with the NHS, your sick pay entitlement will increase with every year of service – usually up to 6 months full pay and 6 month half-pay after 5 years of service.

LV’s Doctors & Surgeons Income Protection Cover, for example, will pay out reduced Income Protection benefits when you stop receiving your full sick pay from the NHS to top up your half sick pay.

This happens regardless of how long you have set your deferred period, which means that you can set your deferred period as long as 12 months and significantly reduce your premiums without sacrificing insurance coverage.

When your NHS sick pay stops entirely and your deferred period ends, LV will begin paying out your full Income Protection benefits.

Length of Service

Sick Pay Entitlement

0 – 3 months

No sick pay entitlement

3 – 12 months

1 month full pay + 2 months half pay

2 years

2 months full pay + 2 months half pay

3 years

4 months full pay + 4 months half pay

4 years

5 months full pay + 5 months half pay

5 years

6 months full pay + 6 months half pay

Sabbatical Cover

Some providers also accommodate sabbaticals by allowing policyholders to take breaks of up to 2 years from their policy. This time can be used to study or work abroad, where policyholders will still be covered as long as they have a UK bank account.

If you move to anywhere in Europe, USA, Canada, Australia or New Zealand and certain other industrialised nations, you can keep your payout on a long-term basis.

If you move anywhere else in the world your benefit will be limited to a maximum of 26 weeks if you need to claim before you’ll have to return to one of the listed countries for medical assessment to continue with the claim.

How Much Does Income Protection for Doctors Cost In 2021?

When calculating the cost of Income Protection the final premiums will depend on a variety of personal and policy factors as outlined below.

Age

The older you are at the start of your plan, the higher your premiums.

Current State of Health / Pre-Existing Medical History

An insurer may increase your premiums if you have a health condition or simply exclude that condition outright.

Smoker Status

Smokers are more likely to get ill, and to become seriously ill, due to the detrimental health impacts of smoking. Most — although not all — insurers therefore charge smokers more.

Occupation

Insurers view some roles as riskier than others. For doctors and surgeons, providers tend to see surgeons as higher risk, partly because of the dexterity they need in their hands and the ability to stand and concentrate for hours-long operations.

A minor and illness or injury is therefore more likely to stop a surgeon operating than would be the case for a GP. For this reason, policies for surgeons generally cost more than for doctors.

We’ve put together a rough idea of how much Income Protection costs for Doctors and Surgeons of three different ages.

Example Monthly Cost

To calculate these monthly premiums, we’ve assumed:

  • The individual is a healthy non-smoker
  • They want a benefit of £2,000 a month
  • They’re looking for an 13 week deferral period
  • Their cease age will be age 65
  • They’re looking for long-term cover
  • Looking for guaranteed premiums which won’t increase over the life of the policy.
30 Years Old 40 Years Old 50 Years Old
Doctor
£30.03
per month
£45.38
per month
£65.65
per month
Surgeons
£38.79
per month
£57.92
per month
£74.11
per month

Reviewing Existing Cover Can Result In Significant Savings

Even if you already have a policy, it might be worth comparing quotes to check you’re still getting the best deal. Many of our clients have had doctors Income Protection with the same provider since medical school and haven’t touched the policy since.

Not only could better or cheaper cover exist, but your circumstances have likely changed since you were a young junior doctor. Get in touch to see if you could get a better deal on a policy more suited to your needs.

You can use our income protection quote tool to compare pricing from all the leading UK insurers →

How Do I Make a Claim? Will It Pay Out?

The following steps offer a basic overview for making an Income Protection claim:

  • An accident / sickness stops you working.
  • Contact your insurer as soon as this happens.
  • Fill in a claims form — most providers let you do this online. You’ll need evidence of your disability, for example a doctor’s note. You may also have to prove your income immediately prior to your illness at this stage.
  • Wait out your policy’s deferral period. If you’re an NHS worker and have chosen specialist Income Protection Insurance for doctors, your deferral period works with your NHS sick pay. This means that, when your NHS sick falls to half pay, the insurer pays half your benefit to top up the ongoing half pay you get from the NHS.
  • After your NHS sick pay ends, if you still can’t do your job the insurer starts paying out your full benefits.
  • You receive benefits until you recover and return to your job, reach your claims limit (for short-term protection) or reach your cease age (for long-term protection).

Neil’s Cancer Claim With British Friendly

Neil took out an Accident and Sickness Insurance policy with British Friendly via Drewberry. He had the plan for 4 years before needing to claim.

He became unwell with pains in his stomach. After visiting his GP and having some tests, Neil was diagnosed with stage 2 bowel cancer. He needed surgery and therefore had to claim while having his operation and during his subsequent recovery.

🤕 Read More About Neil’s Claim

Which Providers Pay the Most Claims?

Most people understandably want to choose the provider that’s most likely to pay out if they suffer an accident or period of ill health.

However, it’s actually fairly hard to distinguish one provider from another in this area. Payout rates across the industry are not only higher than many people assume but are also fairly uniform.

For example, as shown in the table below, 90% of all Accident & Sickness Insurance claims are successful with most insurers.

Insurer

2017

2018

2019

Aegon

92.1%

93%

100%

Zurich

87%

95%

98%

Vitality

96%

97.8%

96.4%

Shepherds Friendly

96%

95.8%

96.3%

Cirencester Friendly

94.7%

95.2%

95.7%

Holloway Friendly

96%

98%

94%

British Friendly

92.4%

94.7%

94%

Liverpool Victoria

96%

95%

93%

The Exeter

91%

93%

91%

Aviva

88.8%

86.3%

85.7%

Legal & General

95%

95%

82%

Payout statistics alone should not be used to decide which insurer offers the best Income Protection.

Instead, payout rates should be used as a rough guide to compare successful claims across the industry as a whole.

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Common Doctor Income Protection Questions

  • Can Locum GPs Get Income Protection?

    Yes, you can get Income Protection as a locum GP. In our experience, locum GPs typically either work for themselves or through a medical practice, and there are different ways to secure Income Protection depending on the way you work.

    Self-Employed Income Protection might be of interest to locum GPs working through their own limited company. Here the limited company setup can own and pay for the policy, which may offer tax savings over paying for the policy individually.

    Otherwise, if you work as a locum who’s employed by a medical practice then you can take out Income Protection in the normal way as if you were employed directly by the NHS.

  • Will It Match My NHS Sick Pay?

    If you work for the NHS, you’ll likely get slightly more generous sick pay than other workers.

    Given the NHS pays a maximum of 6 months full pay and 6 months half pay as sick pay depending on your length of service, you can set your Income Protection deferral period to match this and therefore reduce premiums considerably. 

    This is known as an NHS sick pay mirroring deferral period and is offered by a number of the top UK providers we work with.

  • Does Doctors Income Protection Cover HIV?

    As a medical worker, you’re potentially more at risk of developing HIV at work thanks to exposure to needle stick injuries.

    Income Protection for doctors has specific clauses to cover HIV developed in a work setting through needle stick injuries, so you’ll be covered if this should occur.

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Compare UK’s Best Income Protection For Doctors In 2021?

The Income Protection market is incredibly competitive. That means there are a range of providers to consider. It’s therefore important to compare Income Protection quotes from every major provider to get the best deal.

In addition to the individual product reviews that are linked below we have an expert guide comparing the terms of all the best income protection providers that is really worth a read.

Specialist Policies for Doctors and Other Medical Professionals

General Income Protection Providers

Additional Benefits & Support Services

Another important area clients often overlooked is the additional benefits on offer from various insurers. These are services available, almost always for free, alongside your policy.

Providers offer added value benefits alongside your policy with your overall wellness in mind. They’re there to help reduce the chances of you needing to claim or to speed up your recovery if you do suffer an accident or period of illness resulting in a claim.

Depending on your provider, added value benefits may include:

  • Remote GP appointments
  • Helplines offering convenient telephone access to trained doctors and nurses for advice on minor illnesses / injuries
  • A fixed number of physiotherapy sessions per year (either online or in person)
  • A fixed number of counselling / cognitive behavioural therapy sessions per year (either online or in person)
  • High street discounts
  • Discounts on gym memberships / fitness trackers
  • Hospitalisation benefit, paying out a cash benefit each day you spend as an inpatient in hospital due to accident or sickness
  • Second medical opinion service, providing access to world-leading experts to offer a second opinion on a diagnosis or course of treatment.

Many such services are available not only to you as the policyholder but also your immediate family, such as your spouse / civil partner or dependent children.

Compare Doctors Income Protection Quotes & Get Expert Advice

As a doctor, there are a number of specialist Income Protection policies available to you. This includes policies with a deferred period that matches any NHS sick pay you’re entitled to. To ensure you get it right, don’t hesitate to contact us today.

Why Speak to Us?

We started Drewberry™ because we were tired of being treated like a number.

We all deserve a first class service when it comes to issues as important as protecting our health and our finances. Below are just a few reasons why it makes sense to talk to us.

If you need help setting up the most appropriate cover pop us a call on 02084327333 or email help@drewberry.co.uk.

Very helpful from start to finish. Talked through all the points and gave great advice.

Darren Comer
16/05/2021
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