Find out what to look for in your income protection policy as a doctor and receive quotes for cover.
As doctors and other medical professionals work in a statistically hazardous industry and face the risk of infection and disease on a daily basis. Working as an ambulance officer, doctor, nurse or surgeon can carry risks including:
- Exposure to illnesses and diseases. Even with all the necessary safety and hygiene precautions, incidents like needle stick injuries are common for medical professionals.
- Mental illnesses. Data shows that medical professionals are prone to developing medical illnesses.
- Loosing a high income if anything happens to you. Some medical profession are high paying, but this also leaves your family and yourself at risk if you are unable to work due to injury or illness.
What does income protection provide?
It provides you with a replacement income of up to 75% of their average income in the event that they suffer an illness or injury and they are required to take time off work.
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Statistics show the risks of working as a medical professional
Sources last checked June 2016.
As someone working in the medical field, you are used to taking care of people. Income protection is an insurance solution that can be tailored to the specific needs of medical professionals like you. There are certain features available on policies that may provide the extra level of protection required by those working in the medial field:
- Needlestick Cover. In Australia alone, there are 18,000 reported cases of needlestick every year. With needlestick cover, you will receive a lump sum benefit payment should you become infected with HIV, Hepatitis B or C, while performing your daily duties as a medical practitioner. Also known as blood borne disease benefit, it is often offered as a built-in benefit in most income protection policies and it may also come in as a standalone insurance cover.
- Definition of disability tailored to the medical professions. It is important that your income protection policy is able to meet the unique needs of your occupation, and careful assessment of how disability is defined within your cover is essential.
- 10-Hour Definition. Some insurance providers may also offer a 10-hour definition, in which means you are allowed to return to work during a period of a disability for up to 10 hours per week without jeopardising the claim.
- Mental Illness Cover. Stress can take its toll. In fact, medical professionals are 20% more likely to suffer from mental illness. There are some insurance providers who may include this additional cover in their income protection policies.
A common risk doctors and other medical professionals face is needlestick injury. Because they handle needles and are constantly around them in the course of their work, the likelihood of accidental injury is high. There are 18,000 reported cases of needlestick in Australia every year, and a percentage of those cases go on to contract HIV (0.5%), hepatitis B (20%) or hepatitis C (10%).
For this reason, a benefit for needlestick injury is available as an additional option on income protection insurance policies. Also known as blood borne diseases benefit, it provides a lump-sum payment to medical practitioners who become infected with HIV, hepatitis B or hepatitis C while performing their daily duties. Because recovery from such diseases can be a slow process, the benefit paid is normally sufficient to cover loss of income over a prolonged period of time.
While cover for needlestick injury varies between insurers, the main difference between policies is the benefit amount offered and whether hepatitis B or C are also covered (some insurers only include cover for HIV).
Which providers offer Income Protection With Needlestick Benefit?
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Each insurance company has its own criteria for underwriting different applicants. With so many providers in the Australian market, the way medical professionals are covered varies from insurer to insurer. An insurance consultant can help medical practitioners find adequate and affordable cover through their knowledge of policy options and providers on the current market.
Make sure you pay attention these features
- Indemnity value or agreed value income protection. Under the indemnity value income protection, the benefits amount you receive is determined by your income prior to the illness or injury. This type of cover may be more suitable for those whose income fluctuates. Agreed value income protection is based on your income at the time of application. This structure may be more suitable for workers whose income is steady.
- Blood borne diseases. This feature is often provided in conjunction with needlestick. Just like the needlestick cover this feature is also paid to you in a tax-free lump sum payment.
- Stepped or level premiums. The premium structure you chose determines the cost of your policy. Stepped premiums start off low and increase overtime as you age. Level premiums are more expensive, especially if you start your policy when you are still young. However, the premiums remain the same.
- Waiting period. Is the amount of time you out of work before you receive your first monthly benefit payment. Depending on the length you have chosen, it will also have an effect on the premiums you pay. In general, you can choose a waiting period of 14, 30, 60, 90 days, 1 and 2 years.
- Benefit period. Is how long you choose to be receiving the monthly benefits for and it can also have an effect on your premiums. In general, you can choose a benefit period of generally a two or five year or up to 65 years of age.
- Built-in features and additional options. In addition to features and benefits that complement your occupation as a medical professional, income protection also offer other features and benefits that you can tailor to suit your specific needs and personal situation. It is essential to read the Product Disclosure Statement (PDS) to find more information on features and benefits on offer as they may vary between providers.
As well as the main factors listed above, other criteria to consider include:
- Index-linked policy. Premiums and benefits increase annually to keep pace with inflation.
- Guaranteed future insurability. This allows you to increase your level of cover without further underwriting, which means your premium won’t change even if your health has deteriorated. As a doctor, you may find that you have significant increases in your salary over time as your business grows or you gain new certifications. In order to ensure you have enough cover in place, it’s important to review your policy as your salary changes.
- Benefit affected by other income. Some insurers may require you to use up your sick leave or other entitlements before you can receive a benefit.
You may be thinking whether or not you need income protection cover if you are only a medical graduate. No matter where you are in your medical career, it is important to keep in mind that it is a high risk industry. Having insurance cover such as income protection can protect you from financial hardship, especially if you are unable to work for long periods of time. Medical professions are generally categorised into nine groups, as the following:
- Intern and resident medical officers
- Interns. Interns are new graduates with provisional registration from an Australian Medical Board or Council that undertake their first year internship in a public hospital, in which they are receiving their training.
- Resident medical officers. Resident medical officers are in the 2nd postgraduate year and are non-specialist medical practitioners employed by a public teaching hospital, in which they perform locum work consistent with their qualifications and experience and surgical assistance.
- Intern and resident medical officersDoctor in training is a medical practitioner who is:
- in their 3rd, 4th or 5th postgraduate year and employed by a public teaching hospital as a non-specialist medical practitioner
- enrolled in a training program as a General Practice Registrar, which is recognised by the Royal Australian College of General Practitioner for training purposes to qualify as a general practitioner
- enrolled in a specialist training program and accredited as Specialist in training by the Australian Medical Council or employed as a specialist medical practitioner to undertake training for qualification
- a Hospital Registrar who will commence their training program within 12 months.
- General practiceThe general practice category is divided into 2 main levels:
- Level 1 General Practice - non-procedural: includes general practitioners that mainly engage in consultative practice and perform procedures that are commonly performed in their surgery or rooms.
- Level 2 General Practice - procedural: includes general practitioners who perform procedural activities.
- Cosmetic practiceA medical practitioner in cosmetic is a professional who does not have the qualification to perform the cosmetic procedures undertaken as they do not have specialist recognition.
- Other medical professionals, such as Defence Forces, Medical Administration positions, Psychotherapy (non-specialist), Surgical Assistants
- Specialist-non-surgical, such as Dermatology, Emergency Medicine, Intensive Care, Paediatrics, Pathology, Psychiatry.
- Surgeon, such as Cardio-thoracic, Endocrinology, Hand, Foot and Ankle, Neurosurgery, Orthopaedic, Paediatric, Vascular.
- Allied health, such as Optometry, Physiotherapy, Radiography, Speech and Learning Pathology, Technician.
- Dental, includes Dental General, Dental Hygienist, Dental Oral & Maxillofacial Surgeon and Dental Specialist.
Source: Avant - Category of Practice Guide, 2013
Business expenses insurance is generally available as an additional option on income protection policies. It can provide an ongoing benefit for up to 12 months to cover the cost of running a business if you are forced to take time off work due to illness or injury. Such expenses may include:
- Staff salaries
- Rent for your practice
- Phone, gas and electricity bills
- Repairs and maintenance of machinery and equipment
Business expenses insurance could be worth considering if you are a general practitioner in charge of your own practice.
To receive a monthly benefit payment from income protection insurance, you will need to qualify under one of the three definitions that insurers apply to the term ‘total disability’. These are:
- Duties definition. You must be incapable of performing at least one of the income-producing duties of your occupation.
- Income definition. You must be incapable of earning more than 20% of your previous income.
- Hours definition. You must be incapable of working more than 10 hours a week.
Most income protection policies in Australia use the duties definition to define total disability, although there are now policies available that include all three definitions and allow you to select the one that best suits you at claim time.
One thing to look out for when comparing income protection policies is whether cover includes disability due to your inability to perform your ‘own occupation’ or your inability to perform ‘any occupation’. As a doctor, this is an important distinction. Under the ‘any occupation’ definition, you may find you won’t qualify for a benefit if you are able to perform any job outside of the medical industry, such as low-paid manual labour. Opting for ‘own occupation’ cover is more expensive but may offer better value to those in the medical profession.
Q. How much will I pay for cover?
- A. Your premium is based on a number of factors including:
- Your age
- Your gender
- Whether you smoke
- Any pre-existing conditions you have
- Your chosen policy and any additional features
Q. Will I pay more for needlestick injury cover?
- A. It will depend on the policy you choose. Some policies will include needlestick injury as a built-in benefit while others will charge an additional premium. A consultant can help you find a policy with built-in needlestick injury cover.
Q. Is my cover tax-deductible?
- A. Income protection premiums are generally tax-deductible if you are self-employed or if cover is funded through superannuation. A consultant can help you determine this.
Q. Can I get cover for redundancy?
- A. There are a number of general insurers that offer an unemployment benefit for up to three months. This is not available on policies from life insurance companies.
Q. How much am I paid?
- A. You will generally be paid up to 75% of your regular income. Policies will have a maximum monthly benefit applied, such as up to $5,000 per month.
Q. What are the benefits of getting cover through a broker?
- A. A broker can help you compare multiple options at once and use their knowledge of the market to find an option suitable for your situation. They can also assist you throughout the application process, help you gather the necessary paperwork and submit your application on time.