Author Richard T Lishman, Managing Director of money4dentists, a firm of specialist Independent Financial Advisers who help dentists across the UK manage their money and achieve their financial and lifestyle goals.
Protect yourself, protect your income
Every year, millions of working days are lost across the UK due to sickness and injury averaging out at about 16 days per person – and dentists are no exception. If anything, dentists are at greater risk of becoming ill or suffering from an injury than many other professionals, as dentistry is such a physically and mentally demanding occupation.
Musculoskeletal disorders such as carpal tunnel syndrome, tendonitis, tension neck syndrome and mechanical back syndrome are some of the most common causes of long-term absence in the dental practice, as are psychological disorders. Common mental health issues in dentistry include job-related stress, tension, depression and emotional exhaustion. Take into account additional risks such as eyestrain, hearing loss and infectious hazards, as well as common, everyday ailments and it is fair to say that dentists have a lot to contend with during their working life.
That is why you need income protection – a policy designed to pay you an income if you are unable to work due to sickness, injury or an accident. That way, if the worst were to happen, you can rest assured that your livelihood is protected regardless of how long you are off work, because all benefits are paid tax-free until you either return to work or reach retirement age.
Of course, it may be that your employer provides a good sick pay scheme, but the chances are that even if they do it will be for a limited time only. Current NHS employees, for example, can receive their full salary for up to six months and half their salary for another six months as long as they meet the qualifying criteria. Beyond that, the only monetary support you would be eligible for would be statutory sick pay, and at £89.35 a week (for up to 28 weeks) it probably wouldn't be enough to cover your food bill, let alone your other financial commitments. Thus, unless you have other sources of income, such as a spouse's salary or savings and investments that you think would cover your outgoings long-term, or have the option to retire early, income protection insurance is always advisable.
Now, there are more than 50 income protection plans available at any given time, so be sure to examine all of the options available to you. Here's what you'll need to consider:
- Level of incapacity: All insurance companies base claims on how ill you have to be prior to any benefit being paid, but whether or not you receive a payout will all depend on which incapacity level you choose. Selecting 'own occupation' policy will provide you with the most comprehensive cover, as it ensures that your claim will be assessed on your ability to perform your duties as a dentist. 'Any occupation' cover on the other hand will only pay out for as long as you're unable to work, so if you were declared fit to work payments would be stopped – regardless of whether you could return to practice or not.
- How long can you afford to wait before making a claim? With income protection policies there is what is known as the 'deferred period', which means you can either choose to be paid from the first full day you are off sick or defer your claim to a later date. Generally, a shorter deferred period will increase the cost of your cover.
- Guaranteed or reviewable premiums: If you were to go for guaranteed rates, the amount that you would pay for your cover would remain the same for the duration of the plan, irrespective of how many claims you make. Alternatively, you could select a reviewable premium, which is where your monthly payment would be reviewed after a set period of time and can be increased based on their overall claims experience.
- Exclusions: When choosing income protection cover be sure to check the policy for any potential limitations or exclusions. These may vary depending on the insurer that you opt for, but typical exclusions where you won't receive a payout can include pre-existing medical conditions and illness or injury that is self-inflicted.
With so much to take into consideration, it can pay to utilise the services of a specialist Independent Financial Adviser, such as those at money4dentists, as they can help you to select a policy that will best protect you and your livelihood. For ultimate peace of mind, you should consider other health insurances such as critical illness cover, life insurance and medical insurance too.
1. Health and safety executive: Working days lost. Accessed online 2 May 2017 at http://www.hse.gov.uk/statistics/dayslost.htm
2. GOV.UK: Statutory Sick Pay (SSP) employer guide. Accessed online 2 May 2017 at https://www.gov.uk/employers-sick-pay/entitlement