17 min Read
13 May 2020

Written by Andy

Best Income Protection Insurance for Doctors

Best Income Protection for DoctorsIncome protection is a type of sick pay insurance that replaces a portion of your income in the event that you cannot work due to an accident or illness. In this article, we take a look at the best income protection policies for doctors, explaining the benefits, costs and where best to buy it. We also explain how to get £50 cashback when you buy a policy, read on to find out more.

What is income protection insurance for doctors?

Income protection insurance for doctors is a type of sick pay insurance that can cover up to 70% of your gross earnings if you are unable to work due to an illness or accident. The cover is designed to kick in once your NHS sick pay stops paying out, ensuring you receive an ongoing income so you can pay your outgoings such as your mortgage, rent, bills and groceries. Income protection insurance for doctors can come with additional benefits, such as a bespoke deferred period which mirrors your current NHS sick pay benefit as well as the removal of specialist exclusions such as HIV.

You can get income protection insurance for doctors so long as you are employed as a doctor for the NHS, either in your own practice or as a partner or locum. Income protection insurance for doctors is sold on an 'own occupation' definition, which means that so long as you are unable to carry out your own job (due to an accident or illness) then the policy will pay out. This is far more comprehensive than an 'any occupation' definition, which would only pay out if you were unable to carry out any occupational duties.

Income protection insurance for doctors vs NHS sick pay

Your NHS sick pay entitlement will depend on your length of service, with the maximum sick pay entitlement being 6 months half pay and 6 months full pay for those that have served 6 years or more. An income protection insurance for doctors policy is designed to kick in once your NHS sick pay benefits stop, meaning you are covered if you were to suffer a long term illness. Check out our table in the next section for a breakdown of how income protection insurance for doctors is paid.

How does income protection for doctors work?

Income protection insurance for doctors is a specialist type of sick pay insurance that is designed to pay out once your NHS sick pay stops. The amount of sick pay you receive from the NHS is based on your length of service, meaning the longer you have worked for the NHS, the longer you could receive sick pay for. Income protection insurance for doctors is a flexible type of sick pay insurance that adapts each year as your benefits change.

So, after your first year with the NHS, you would receive a maximum sick pay benefit of 1 month full pay and 2 months half pay. However, after year 2, your benefits improve and you would receive 2 months full pay and 2 months half pay should you be sick and unable to work. Ideally, you would want a private sick pay insurance policy where the deferred period (the waiting period before you can claim) changes in line with your NHS benefits, otherwise, you could easily be over or under insured.

We have provided a table below which explains the current NHS sick pay benefit entitlement for doctors based on length of service. It also includes when an income protection insurance for doctors policy would usually kick in:

NHS Service Full NHS sick pay: Half NHS sick pay: Income protection insurance for doctors
Year 1 1 month 2 months Kicks in after 1 month, topping up half pay to full pay and then full benefit after 3 months
Year 2 2 months 2 months Kicks in after 2 months, topping up half pay to full pay and then full benefit after 4 months
Year 3 4 months 4 months Kicks in after 4 months, topping up half pay to full pay and then full benefit after 8 months
Year 4 and 5 5 months 5 months Kicks in after 5 months, topping up half pay to full pay and then full benefit after 10 months
From year 6 onwards 6 months 6 months Kicks in after 6 months, topping up half pay to full pay and then full benefit after 12 months

 

With income protection insurance for doctors you can insure up to around 70% of your gross income. Additionally, you may be entitled to receive Statutory Sick Pay on top (currently £95.85 per week, paid for up to a maximum of 28 weeks).

You can choose how long you want your Income protection insurance for doctors policy to pay out for, this is called the policy term and while most people elect to run the policy until their intended retirement date, reducing the term will help to reduce the cost of the cover. You could instead choose a 'short term' income protection policy, however, these types of policies will only pay out for a maximum of 1, 2 or 5 years and so won't cover you adequately if you were to suffer a long term illness.

Another way to reduce the cost of income protection insurance for doctors insurance is to set a longer deferred period (the waiting period before a claim can be made). You would need to wait longer before you could claim, however, this could work out fine for those that have more comprehensive NHS sick pay benefits and those that have savings that they could fall back on.

What does income protection insurance for doctors cover?

Income protection insurance for doctors will pay out a guaranteed income in the event that you are unable to work due to an accident or illness. You would need to complete the pre-agreed deferred period before you can claim and in order to process your claim, the insurance company is likely to want to write to your GP and/or your employer.

Does income protection insurance for doctors pay out for HIV?

Yes, if you take a specialist income protection insurance policy for doctors, then it should have a specific clause which guarantees to pay out in the event that you contract HIV through a needle stick injury in your work setting. We explain the best way to buy income protection insurance for doctors below.

What is excluded from an income protection insurance policy for doctors?

If you have suffered any medical condition or complication in the last 5 years it is possible that an exclusion could be applied.

Even if you were to have an exclusion applied to your income protection insurance for doctors policy, there may be an opportunity to challenge the exclusion after a period of time has passed. If, after taking a policy out you go on to make a full recovery and have no symptoms and no longer require treatment, you could look to get the exclusion removed.

Policies would also usually exclude any claim arising from self-inflicted injuries and illnesses or injuries caused by misuse of alcohol or drugs.

Income protection insurance for doctors premium types

You can choose between a reviewable premium, a guaranteed premium or an age-banded premium and we explain each of the three types of premium below:

Income protection insurance for doctors - Reviewable premiums explained

If you select reviewable premiums, then your insurer can increase the premiums throughout the term of the policy. Increases are largely in response to market conditions, economical factors and the number of claims received. The premiums are not reviewed based on your age or health. Premiums usually start cheaper than guaranteed premiums, but can quickly rise. If you want to be sure that you can afford the premiums throughout the policy term, then you would be better off selecting a guaranteed premium.

Income protection insurance for doctors - Guaranteed premiums explained

If you select guaranteed premiums, then your premiums are guaranteed and will never change throughout the policy term. Premiums will start off more expensive than reviewable or age banded income protection, however, you will always know how much your cover will be and so you are paying to future proof your policy. If you intend to keep your income protection insurance for doctors policy until retirement, then guaranteed premiums are likely to work out cheaper.

Income protection insurance for doctors - Age-banded premiums explained

Premiums on age-banded income protection insurance policies tend to start out cheaper but rise each year as you get older. Age-banded premiums will rise by a set amount each year, specifically related to your age and the increase in risk, so you will always know how much your policy will cost throughout the life of the policy.

It would be a good idea to speak to an income protection specialist and get a quote for all 3 types of premium. An independent income protection specialist can talk you through each option, work out the likely total cost and help you to choose the best policy for your individual needs.

How much does income protection insurance for doctors cost?

The cost of income protection insurance for doctors will depend on a number of factors including the type of doctor you are, your age, your health, the type of premium, how much cover you need and over how long you want the cover to run for.

Roughly speaking, a healthy doctor could get around £2,500 of income protection insurance for between £30 and £100 per month, dependent on age and the type of cover required. The best way to find out the actual cost of income protection is to speak to an independent specialist and get a personalised quote. We explain in the next section how to get the best quotes for income protection insurance for doctors.

Best and cheapest income protection insurance for doctors

The best way to ensure you get the most comprehensive income protection insurance for doctors cover (and at the best price) is to speak to an independent income protection specialist. LifeSearch, one of the UK's largest specialist independent brokers will be able to advise you on the best plan for you. Its team of experienced advisers will guide you through the whole process, explaining the options available to you as well as helping to complete the application forms. Simply complete this short form and they will call you back at a time that is convenient for you. Additionally, if you decide to take out a policy, LifeSearch will give you £50 cashback.

Alternatives to Income protection insurance for doctors

Income protection insurance for doctors is the most comprehensive type of sick pay insurance available and ensures you can receive a guaranteed income, right up until retirement if required. You may decide to alter the type of premium in order to bring down the cost (deciding on reviewable or age-banded premiums rather than guaranteed) or you could take out a short term income protection policy that limits the number of years it pays out for.

Other types of 'protection' insurance include critical illness insurance, a policy that pays out a guaranteed sum if you suffer one of the defined illnesses on the policy. This type of policy is usually taken out in addition to income protection insurance and not instead of, as it does not provide the same level of protection.

Another type of sickness insurance is a policy called 'Accident & Sickness' insurance. This type of policy is usually sold to protect mortgage repayments and bills and will only pay out for a maximum of one or two years. This type of policy does not offer the same flexibility as income protection insurance for doctors and as it is far less comprehensive, works out expensive for what it is.

Best income protection insurance for doctors providers

There is not one income protection insurance provider that is head and shoulders above the rest. Every provider offers a range of flexible benefits and so ultimately, the decision is likely to come down to cost. Speak to an independent income protection insurance specialist so that you can be guided through the process and ensure you are buying the best policy for your own circumstances.

We have provided a simple summary of income protection insurance providers below:

Provider Maximum income protection insurance benefit Good for:
Aviva £240,000
Smooth application process
British Friendly £45,500
Good for high-risk occupations
L&G £240,000
Smooth application process
LV= £250,000
Great for doctors
Royal London £250,000
Great for doctors
Shepherds Friendly £49,000
Excellent claims record
The Exeter £120,000
Good for high risk occupations
Vitality £120,000
Great benefits
Wesleyan £130,000 or £208,000 for doctors, dentists and lawyers
Can get cover from day 1
Zurich £240,000
Excellent claims record

 

For more information on income protection insurance providers, check out our article 'Compare the best 10 Income Protection policies in the UK'

 

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