Income Protection For Doctors And Health Professionals

Health professionals face a variety of unique risks and challenges in the workplace everyday, from exposure to infectious diseases through to needlestick injuries, and a variety of other potential sources of illness or injury.

As such, if you are a doctor or nurse or other healthcare professional and find yourself unable to work for a period of time, it’s important to know that there is a contingency in place for your income. This is where income protection insurance for doctors can come in – here are some important things to know.

What is income protection insurance?

Income protection insurance is designed to replace some of your income if you’re unable to work due to injury or illness. Income protection insurance provider PPS Mutual says that when it comes to medical professionals, this kind of cover can allow you to “focus on recovering” without the stress of meeting regular living expenses in the event of illness or injury.

How does income protection insurance for doctors work?

When you take out income protection as a medical professional, you will typically need to serve a waiting period, after which time you will be able to make a claim to cover a portion of your monthly income should you be unable to work due to sickness or injury.

In the event of a successful claim, income protection will pay you a benefit of up to a certain percentage (up to 75% or so, depending on the provider) of your regular income. This amount is payable up to a maximum benefit limit, which can be up to $60,000 a month, depending on your salary and the provider.

Benefits typically last either until you return to work, or your agreed benefit period ends.Income protection insurance benefits can also cease when you turn a certain age, which could typically be around 65 to 70 years old, depending on your policy and provider.

The Australian Taxation Office says that unlike many other types of insurance, income protection premiums are tax deductible. Income protection can be taken out directly from an insurer or through an adviser.

Additionally, it is possible to take on a form of income protection insurance inside or outside of your superannuation.

Why might health professionals need income protection?

Healthcare workers are exposed to a range of health and safety hazards in the course of their everyday employment. This can include anything from exposure to blood borne viruses like HIV and hepatitis, chemical hazards, physical hazards, and psychological hazards. Workers like nurses and paramedics, who may be required to lift patients on a daily basis, can also be susceptible to back injuries.

What is needlestick cover?

Some insurers offer ‘needlestick cover’ as an optional benefit for medical professionals, in the event of exposure to blood-borne viruses by needle stick injury. This is a lump sum benefit that will be paid if you become infected with HIV, hepatitis B or hepatitis C as a result of your work. The ‘needlestick’ description comes from the fact that these sorts of infections can often result from workplace accidents involving used needles, although some insurers may also cover infections caused through other means, such as blood splashing or bone dust inhalation.

What is the cost of income protection insurance for doctors?

The cost of income protection insurance generally depends on a number of factors, including your age, the specific profession you work in and the particular risks you face, as well as your salary and the amount of cover you require. The riskier your profession and the higher your salary, the more expensive premiums are likely to be.

What is the best income protection insurance for doctors?

The ‘best’ income protection insurance for doctors is a matter of considering your particular needs, requirements and circumstances. Medical financial specialists Walsh’s Medical Clients say that, when determining cover that may be suitable for their clients, they begin by conducting a needs analysis to determine how much cover may be required, that also considers factors such as the need to make sure dependent family members are provide for, and requirements such as school fees for children will be accounted for.

What is the difference between workers’ compensation and income protection insurance?

You might be thinking that income protection sounds quite similar to workers’ compensation, but there are actually a few major differences between the two.

Workers’ compensation is a type of insurance payment that is paid if an employee is injured at work, or becomes sick due to their work. The Fair Work Ombudsman advises that workers’ compensation includes payments to employees to cover both their wages while they’re unable to work and their medical expenses and rehabilitation costs. It is mandatory for most employers to take out workers’ compensation insurance to cover their employees. It comes at no cost to employees. The Ombudsman suggests contacting the workers’ compensation regulator in your state or territory if you have any questions about this type of insurance.

Importantly, workers’ compensation only covers you if you are a worker. So, if you’re a doctor practising as a sole trader or as a partner in a partnership, you typically won’t be covered.

In comparison, income protection covers you regardless of whether you are self-employed or an employee. Importantly, it is also designed to cover policyholders for injuries or illnesses sustained both inside and outside of work.  This means that unlike workers’ compensation, you may be covered even if you injure yourself at home or if you have a non-work related illness. However, coverage and premium costs can vary between different income protection insurers and policies, so it could be a good idea to check with your insurer upfront and read your product disclosure statement (PDS) before signing up.

What other types of insurance are available for doctors and healthcare professionals?

There are various types of insurance that may be suited to those working in the healthcare profession. These can include:

• Death cover, to provide for dependents in the event you pass away or contract a terminal illness
• Total and permanent disability (TPD) cover, which provides a lump sum if you cannot work due to injury or illness
• Critical illness or trauma cover, which can pay a benefit if you are diagnosed with a critical illness that is covered by your provider

In some situations, they may even be mandatory. For example, according to the Australian Health Practitioner Regulatory Agency (APHRA), all health practitioners who undertake any form of practice in their respective profession(s) must have appropriate professional indemnity insurance arrangements in place for all aspects of their practice. APHRA provides guidance for health practitioners in relation to professional indemnity insurance on its website.

Image Source: Minerva Studios/Shutterstock.com.