Life insurance for nurses: What are your options?

Nurses can face some unique risks at work. Because of this, you may want to add additional coverage or look for specific features when choosing a life insurance policy.

Canstar spoke to certified financial planner Lance Cheung about the type of life insurance cover and features nurses may want to have. Mr Cheung is the founding director of Parinity, a boutique financial planning firm that provides advice to medical professionals.

What should nurses consider when taking out life insurance?

When talking about life insurance, it’s important to clarify that there are different products that fall under the life insurance umbrella. Life insurance typically incorporates life cover, total and permanent disablement (TPD) insurance, trauma insurance and income protection.

Then, there are certain specific risks and features that apply to some of these cover types that may prove particularly important for nurses.

Blood borne disease cover

One of the main benefits that nurses may want to consider is blood borne disease cover or needlestick cover, said Mr Cheung.

“[For] any nurse who is exposed to procedures where they might prick themselves with a needle or cut themselves and acquire a blood borne disease like HIV, Hepatitis B or Hepatitis C, this additional benefit can cover them,” said Mr Cheung.

Blood borne disease cover can typically be added to income protection policies and some trauma and TPD policies. It may not be available for policies that are held within your super, Mr Cheung said. If you want to be covered by this benefit, you may want to speak to your insurer or seek financial advice to see what options are available to you.

‘Own occupation’ TPD cover

It may also be worth considering TPD insurance with an ‘own occupation’ definition, said Mr Cheung.

TPD insurance pays a lump sum if you become totally and permanently disabled due to an illness or injury. Insurers have different definitions for what this means. Under the ‘own occupation’ definition, you are generally covered if you are no longer able to work in your usual job. In contrast, under the ‘any occupation’ definition, you are typically covered if you can no longer work in any occupation suited to your education, skills, training or experience.

“‘Own occupation’ can be quite valuable because you can still get a payout if you can’t do the specialty you used to be able to do [and] still work in your profession as a general medical professional,” said Mr Cheung.

This may be worth considering if you work in a specialty area, such as intensive care nurses or mental health nurses.

Most TPD cover held within super covers you for ‘any occupation’, Mr Cheung explained. If you want an ‘own occupation’ definition policy, you will typically have to look for insurance outside of super. Again, it can be a good idea to speak to your insurer to discuss your options, or seek financial advice.

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In addition to these factors that apply to nurses because of the nature of their work, there are other key aspects to weigh up more generally with life insurance products. These include:

• Benefit amount: The benefit amount is the amount you are insured for. Life cover, TPD and trauma insurance are paid as a lump-sum amount, while income protection is paid monthly. When working out your benefit amount for income protection, it can be worth factoring in your base rate of pay as well as additional amounts for night shifts, weekend shifts and overtime that would contribute to your typical monthly earnings, for example.
• Waiting period: This is the length of time you must wait before you are eligible to make a claim. You may be able to choose a shorter waiting period however, this can mean higher premiums.
• Benefit period: This describes how long you will receive benefit payments. For example, most income protection policies in Canstar’s database offer a benefit period of two years, or until the age of 65.
• Inside or outside of super?: You may also have insurance already in place through your super. Most super funds automatically provide you with life cover and TPD insurance. However, keep in mind that you may also not be able to get specific benefits such as blood borne disease cover through super.

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