Income Protection

This form of health insurance is designed to pay you an income in the event of you being unable to work due to sickness, injury or accident.

Income Protection cover is seen as particularly important for dentists and one they can’t really afford not to have.

If you think "it’ll never happen to me…" read the following comment on GDPUK by Dr Anthony Kravitz

…during my career I was a member of all 3 schemes – DPS, D&G and Wesleyan ………… and Wesleyan was very much third in the league table. DPS and D&G both pay out a large (not a small) return of the premiums at the age of 60. When I reached that age I did a complex mathematical equation on a spreadsheet to work this out and (from memory) it was over 60% of the premiums paid over my career. In addition, I have left this money invested with both organisations and I am receiving interest at 4% tax-free as they are both mutual “friendly societies”. So, as an investment Weslyan don’t go anywhere near to being as good.

And, unfortunately, I did have cause to make large claims at least twice during my 40 years with the schemes – again Wesleyan (Medical Sickness as it was then) were very much the worst to deal with. I appreciate that this may not now be the case as it is some time since I ceased membership.

Finally, as others have said, for GDPs (who tend not to take off work for whole weeks) the Wesleyan one-week rule is a big disadvantage.

Or read this story about Steve aged 36…

The main benefit is that in the event of illness you can still afford to pay your bills, mortgages and maintain your standard of living. Any benefits are paid tax-free and continue until you return to work, retire or die, whichever is the earlier. The maximum you are allowed to insure is approximately 65% of your gross salary (net profit for self employed).

You may well have already set up income protection cover so if you want to know if you’ve got it set up correctly the following tips might help. At any one time there are over 50 income protection plans available in the marketplace offered by many insurance companies and banks. The market is also very dynamic, with some plans competitive for dentists and vice versa. This seems to change constantly. Seemingly innocent changes to the small print can make a contract uncompetitive for dentists. There are three specific areas that should be included in your cover:

  1. Own Occupation
    Find out more »
  2. Guaranteed Rates
    Find out more »
  3. Exclusions
    Find out more »

Other Criteria

You should also include the following with your cover:

Worldwide cover
so you don’t have to return to the UK to claim
HIV cover
this should typically be covered if infected at work
Inflation protected
to make sure your standard of living is protected from inflation
Plan to run to your retirement age
for obvious reasons!
Deferred period
ideally this should be Day 1 cover so if you have 1 day off you still get paid!

Whilst the above may be appropriate for many dentists it should be considered on an individual basis. In general one plan cannot cover all the above considerations so typically to ensure you have comprehensive cover you’ll need at least two income protection plans. If you’d like some more information please download our free guide available here, call us on 0121 685 5060 or email us at info@essentialmoney.co.uk