The importance of income protection for dentists
As a dentist, you might ask why it is crucial that have income protection. Whether you're a self-employed or an employed dentist, you'll want to know that you'll still have an income should you be unable to work.
If you are one of those dentists who are self-employed business owners or limited company directors, your income would likely stop if you were to take time off sick or a leave of absence. Even if you're in employment, you may only have sick pay for a relatively short period before you would be put on statutory sick pay, which is a very modest amount and unlikely to cover bills, mortgage payments and other essential outgoings.
Monthly income payments ensures that if you're off work, you'll continue to live your current lifestyle without stressing about the what-ifs and making cutbacks. Having an income protection policy in place means that if you cannot do your role as a dentist, the policy will pay out until it ends or you return to work.
Common injuries suffered by dentists
Dentists suffer a vast range of injuries related to posture and time spent in certain positions during day-to-day practice.
The most common injuries include tendonitis, bursitis and carpal tunnel syndrome. A study on job postures and musculoskeletal illnesses in dentists found that 60% of the participants were aware of correct ergonomic posture. Yet, nearly 74% of these dentists reported the most painful MSDs of the back and neck.
It's not only physical injuries that can amount to needing time off work. Another study found that stress among dentists is prevalent. The majority of dentists in this study complained of burnout (94.7%), and 40.5% of those with burnout presented with chronic symptoms.
How income protection insurance works
Income protection insurance covers most illnesses and injuries that prevent you from working either short or long-term. Income protection ensures you get a regular income until you retire (depending on the length of policy you take out) or can return to work.
In short, this is how it works:
- It provides regular payments to replace part of your income if you cannot work due to injury or illness.
- The policy will pay out until you can start working again.
- Dentists' income protection policies cover most short-term and long-term conditions.
- Claims can be made as often as needed during your policy term.
When deciding on the type of policy you opt for, you'll first determine how much insurance cover you require, the length of your policy and your deferred period. You'll compare policies and choose which monthly premiums and terms suit you best.
You can claim on your policy if you can't work due to illness or injury, and once you've passed your deferred period, you'll receive a monthly benefit. Payments will continue until you're fit enough to return to work, the policy ends, or you retire, whichever is sooner.
The key benefits of income protection
Before revealing the benefits, ask yourself this - would your household savings be enough to cover the bills and life's essentials if you or your partner were unable to work? The answer to this will tell you whether or not it's worth getting covered.
The following are the four main benefits of having income protection:
- Income protection can help you pay vital bills, including but not limited to mortgage, household bills, childcare costs, loans and educational fees.
- It can help you maintain your living standard, so you don't have to make the necessary cutbacks.
- You will not have to cut back on essentials, such as lifestyle routines and daily activities.
- It provides longer-term protection than sick pay or savings/other assets.
Do you need income protection?
Income protection won't be needed by all dentists. It comes down to what loss of income for health reasons would mean for you. If loss of income would hit you hard and you can't gamble with that risk, it could be very beneficial cover to have in place.
Ask yourself these questions to whether you will benefit from income protection:
- Do you have enough savings to take time off work?
- Will you enter into a crisis if no income comes into your household?
- Do you have someone to support you with income that could sustain the household?
- Will your statutory sick pay be enough to cover your expenses?
Asking yourself these crucial questions when evaluating the significance of income protection for you and your household will help you determine these policies' relevancy.
When it comes to savings, you need to consider whether you want to rely on them alone. Your savings may not be able to cover long-term health issues. Or too many emergencies and illnesses may leave you with no room to cover the costs of other health crises.
Income protection if you're self-employed
Have you considered the impacts of having time off if you're self-employed? If you are a self-employed dentist or company director, you will have little protection if you cannot work. Time off work for medical reasons can have a faster financial impact on self-employed people as they have no sick pay entitlement, and income will stop quickly. This makes income protection even more important for self-employed dentists. Income protection can provide a safety net they'd otherwise be without.
Income protection for NHS dentists
If you're a dentist that's employed by the NHS, then you will typically have much better protection as NHS practices will pay 22 weeks of long-term NHS sick pay. However, that protection will end, meaning that you can heavily benefit from a long-deferred period that kicks in when your NHS sick pay entitlement drops after 22 weeks. Dental income protection means you are covered for long-term illnesses or injuries when working at the NHS.
Types of income protection insurance for dentists
There are two types of income protection for dentists. Choosing the best for you will depend on your employment status and whether you are a limited company director.
Income protection paid personally
Income protection paid personally is insurance that anyone can get. This insurance pays a percentage of your gross salary as a regular payment until you can return to work, typically covering 50% - 60% of your income. As this is paid personally, it happens to post taxation and national insurance.
Income protection paid via your business
Income protection paid through your business is also known as Executive Income Protection. This type of insurance cover is popular with contractors and directors working in their own limited company, it helps to lessen the impact of long-term illness or injury, covering up to 80% of your income. Small business owners, including dentists, can opt to put their income protection policy through their business.
Choosing between a personal policy and an executive income protection policy
Deciding between a personal policy and an executive income protection policy can become a confusing task, especially if you need clarification on which policy best suits your needs and help you the most if the unexpected happens. Business Protection Hub is here to help make that decision-making process easier.
If you request a quote from Business Protection Hub, we'll look at both options and see which would be best for you. Contact us today for a free quote for your income protection.
Key terminology to know before looking at income protection
You may have come across these common terminologies when researching income protection. Here are some of the key terminologies to look out for when choosing different options in your income protection insurance plan.
Deferred period
There's often a pre-agreed waiting period before the payments start, also known as a 'deferred period'. It's the time you're happy to wait between being signed off work and payments provided by your insurance to start kicking in. This works as the longer you wait, the lower the monthly premiums.
When considering the amount of time required with your deferred period, you'll need to think about what you have in your savings to cover costs or whether you're entitled to sick pay for a period of time with your employer. Most insurances provide deferred period options of 4, 8, 13 or 26 consecutive weeks before starting to pay the benefit to you.
The cease age
One of the main benefits of income protection is that policies can pay out for many years if you are not well enough to return to work. The term "cease age" means when you want your policy to end. It makes sense to set the policy cease age on the plan at the age you expect to retire. While income protection can be used for short-term protection, you may want to have cover until retirement, so if you can't work ever again, you're protected.
Definition of incapacity
Incapacity refers to the inability to work due to health reasons, such as accidents or sickness. There are three ways insurers will define an inability to work, and you'll have the option to choose which one you'd like to be covered for.
- The best type of cover for income protection is "own occupation", which means the benefit will continue unless you can return to your previous role.
- The next is "suited occupation", which means if you can do another role, perhaps administrative, then the insurer would expect you to return to work.
- Finally, "any occupation", which means that if you can work in any capacity, even if that's in a completely different industry and role, you'd be expected to work.
Indexation
If you opt for indexation with your income protection policy, you can link your policy to the consumer price index, meaning your monthly premiums increase in line with inflation. Indexation can increase the initial premium by a small amount if selected but in the long term means your policy will reflect the changing cost of living and ensure the value of your cover is not eroded by the impacts of inflation. This avoids the policy becoming less valuable as the years pass but does mean the cost will likely go up too.
What's typically covered
Income protection covers almost any illness, injury or accident that stops you from being able to work. Income Protection shields your earnings against any medical issue you may suffer from; this means that if you suffer an accident or illness that stops you from working, you'll be able to claim on your policy.
Insurers will cover up to 80% of your income, which is higher than personal policies that typically max out at 60%. Most income protection insurance policies will also cover your income via both your wages and dividends. What's more, with some policies you can cover your spouse's dividends too.
What's excluded
Not much is excluded with income protection policies, but things such as pre-existing medical conditions, drug and alcohol use and extreme sports participation cause extensions from medical cover.
Insurers will look at your family medical history, meaning that there may be conditions attached to you taking out the policy. Your insurer should explain these conditions to you before you sign up for the policy.
Other types of things that could be excluded are self-inflicted injuries, accidents or injuries occurring while travelling to countries with political instability, areas of active conflict, or those where the Foreign Office has advised against travel.
Request a comparison quote or get in touch
Life is unpredictable, and unfortunately, there may come a time during your career as a dentist when you may be hit with an illness or injury that may prevent you from working. This can cause a huge impact on your life when it comes to money and added stress. Business Protection Hub is here to help ensure that your finances do not suffer too.
Whether it is personal or business income protection for dentists, we can help find the right insurance options for you. Simply request a comparison quote or drop us an email and one of our professional team will be right back to you.
Frequently asked questions
What do I tell the insurer before signing up for an income protection policy?
There are a few pieces of information you'll need to gather before applying for an income protection policy. Information needed will include family medical history, pre-existing medical conditions and if you take part in any dangerous hobbies or lifestyle habits such as smoking or drinking.
If you already have a pre-existing medical condition, poor health, or a dangerous job, you may not be able to get income protection insurance or you may have a higher premium on your insurance.
Can I have income protection if I'm a trainee or student dentist?
Yes. If you are a student, some insurance providers will pay the premium for your education and for a certain number of years as a trainee dentist. Check with your provider about what your insurance will cover as a student or trainee dentist.
How long will income protection cover me if I am out of work?
It depends on the type of policy that you opt for. Some income protection policies can last up until retirement age. The life span of the income protection cover is up to you, depending on your monthly budget and the options you want when having this insurance.
When should I think about buying income protection in my dental career?
It is never too early to start thinking about buying income protection insurance. Whether you're fresh out of dentistry university or 20 years down the line in your career. As with most health-related insurances, the younger and healthier you are, the cheaper your premiums will be. But no matter what age you are, choosing to have income protection cover depends on your current situation and whether you think that you would be able to cope should you be off work.
Dentistry as a profession has some risk factors, such as musculoskeletal illnesses, it's highly beneficial that you get insurance earlier on to avoid the long-term effects of having to stay at work if you cannot afford to take time off.
