Income protection for General Practitioners
GP’s and Locum GP’s
As a GP you are likely to earn several million pounds throughout your career and it is essential to consider what might happen should you be unable to practice for a prolonged period of time.
As a GP partner, your practice agreement will state that you will receive full drawings, (if you were off work due to either Illness, Accident or Sickness) usually for up to a period of 12 months. At that point, it would be normal for your practise agreement to be dissolved and your partners would ask you to leave the practice. Some practices have no formal agreements which can cause major problems in the event of illness.
In the event of short term illness the remaining partners will normally cover the absent GP for a period of time, generally no more than 3 months. If the absent partner has not returned at that point it would fall upon the absentee to cover the cost of employing a locum. (See section on Locum Insurance)
There are no formal NHS sick pay arrangements for GP partnerships so it is vitally important that an Income Protection Policy is put in place to protect you with the correct deferred period.
In most cases if you already have arranged an income protection policy when you were working in hospital medicine it will need to be reviewed as it will probably have been set up to match the NHS sick pay benefits of 6 months full pay and 6 months half pay and may not be relevant to your income as a GP.
As a salaried GP your sick pay benefits will usually depend upon the type of contract held by the partnership, PCT or Hospital Trust operating the service contract.
A GMS contract would normally follow the sick pay rules of the PCT and would provide benefits in line with the NHS sick pay. Earlier NHS service may be taken into consideration for sick pay claims however the statutory requirement is to provide benefits as though you were a new employee.
Provisions under the Model salaried GP contract
The Model contract offers improved sick leave benefits, in line with hospital doctors.
Under the Model, ‘a practitioner absence from duty owing to illness, injury or other disability shall… be entitled to receive an allowance in accordance with the NHS scale contained in paragraph 225 of the Hospital Conditions of Service.’ This means that those salaried GPs employed under the Model will be able to receive the following sick leave allowances:
- during the first year of NHS service: one month’s full pay and (after completing four months’ service) two months’ half pay
- during the second year of NHS service: two months’ full pay and two months’ half pay
- during the third year of NHS service: four months’ full pay and four months’ half pay
- during the fourth and fifth years of NHS service: five months’ full pay and five months’ half pay
- after completing five years of NHS service: six months’ full pay and six months’ half pay.
Calculating years of service for sick leave under the Model
All previous continuous NHS service (including locum service) is aggregated for the purposes of sick leave. Continuous service means without a break of more than 12 months, although there are specific circumstances in which a break of more than 12 months does not mean a break in qualifying service. NHS service here certainly refers to any work undertaken for a PCO and in an NHS hospital.
PMS and APMS practices do not have to adhere to the model contract. It is absolutely vital to establish the provision in your practice as some only offer a very limited level of sick pay. If you are working in a PMS or APMS practice you should ensure that the deferred period under your income protection matches the sick pay available under the contract.
As a Locum you are self-employed and therefore have NO entitlement to sick pay. It is therefore vital that you have income protection in place.
Cover can be arranged to start after various deferred periods ranging from 1 day to 104 weeks. The shorter the deferred period (the time before a claim will be paid) the more expensive the contract. Advice should be sought.
Most Locum GP’s use personal savings as a buffer to cover very short term loss of income through illness or accident and arrange cover to start after 4 weeks, 8 weeks or 13 weeks.
Irrespective of the type of GP contract you have, a long term illness or loss of earnings can have a serious affect on your financial wellbeing. We use our specialist knowledge of the pay structure and benefits packages for NHS employees to tailor income protection cover to the specific needs of doctors. Our advisers have been providing specialist, independent income protection advice to medical professionals since 1996.
Income Protection also known as Permanent Health Insurance (PHI) provides you with a long term regular tax-free income if you become ill or disabled and unable to carry out your usual occupation following a serious accident or prolonged illness.
Benefits are paid tax-free for as long as you are certified as being unable to carry out your SPECIFIC occupation. This could be until you recover and start work again or up to the age you have chosen from the options available, normally to match your planned retirement or upon death if earlier.
How Does Income Protection Work
Income protection is designed to replace earnings, so insurers take into consideration any income you would continue to receive from work and offer a choice of deferred periods,(the time before they would pay benefit). The maximum you can insure for is approximately 65% of gross income and any other income that you may receive. The benefits under the plan will not replace the millions of pounds career earnings that you would receive if you were working but would provide you with enough to pay your bills and maintain a reasonable standard of living whilst incapacitated.
In the event of a long term illness you need an income protection plan specific to your occupation as a GP and one which knits in with any sick pay benefits you receive from the NHS.
There are a number of companies specialising in offering protection in this area, both the amounts and criteria for cover vary greatly from company to company. It is vital that you take advice to ensure that your income protection is occupation specific, will match your sick pay and will not suddenly increase dramatically in cost should the insurer suffer a number of claims and try to pass on the cost to you.
As a medical practitioner, there is a small risk of accidentally contracting HIV/AIDS. The plans we recommend do not have HIV/Aids exclusion for members of the medical & dental profession if they ‘contract the HIV infection accidentally whilst carrying out their normal duties’.
Applying For Cover
We offer the opportunity for you to have a face to face meeting or we can call you at your convenience to discuss your needs and will guide you through the many plans available to ensure that you obtain the correct contract for your needs.
By clicking the button below, you can also apply for a quotation. Please follow the instructions to input your data. Please insert your current gross NHS income including banding payment.