Protecting your income (Newly Qualified and Hospital Doctor)
Sick Pay from the NHS
When you first start work as a doctor in the UK, you join the NHS sick pay scheme. You hope that you will be well protected should you become ill, in reality, within the first 5 years of work, the benefits are very, very poor and you are extremely vulnerable to financial hardship should you be ill for any length of time. As you can see from the table below, the NHS sick pay provision allows for you to receive full pay for varying periods of sickness dependent on service. At the end of this time, all payments will cease. It is important therefore, that any income replacement contract fits in with your existing provision. The maximum NHS benefit will pay for 12 months of sick leave, 6 months of which will only be at half pay.
|Service||Full pay||Half Pay|
|0 – 4 months||1 month|
|Next 8 months||1 month||2 months|
|1 year||2 months||2 months|
|2 years||4 months||4 months|
|3 years||5 months||5 months|
|5 years +||6 months||6 months|
Income protection for doctors
As a medical professional 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.
Irrespective of the stage of your career, 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.
Income protection is designed to replace salary, 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 doctor or surgeon and one which knits in with the sick pay benefits you receive from the NHS. Due to the sliding scale of entitlement of doctor’s sick pay, a fixed deferred period is not appropriate during your first five years of work in 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.
A couple of Insurers provide Income Protection cover for Doctors and have designed their policies to work in conjunction with the NHS sick pay scheme. Their contracts also offer ’Own Occupation’ cover- (Own occupation means that, if you are unable to do your own specific job) regardless of whether you could do another within the NHS, the policy will cover you.
The NHS Doctors' sick pay Initiative
A particular feature of their plans is the ‘NHS sick pay initiative for newly qualified doctors’. This is designed to help provide you with a replacement income, starting as soon as your NHS full sick pay ends, (whatever your length of service). Premiums are guaranteed so your cost will not increase unless you choose to increase your cover. To help accommodate for any pay rises and inflation, you can choose for your income replacement level to rise every year, regardless of any changes in your state of health.
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’.
Income protection for Newly Qualified Doctors
You might think you don't need an income protection policy. You don't have any children; you're not yet married; you've got a nice income. Why bother paying out to cover yourself for illness or disability? Maybe you're right. If everything goes to plan, you'll perhaps retire a little early and start to really enjoy life.
There is never a right time to fall seriously ill, or become involved in an accident. You could be struck down with something tomorrow, something that would stop you from ever going to work again. You won't get that much from the NHS or the State, certainly not enough to keep you in the style to which you're accustomed. That cash you're perhaps saved up would dwindle away fairly quickly if something really bad happened.
I’m not trying to scaremonger here. Many people get through their whole working life without any serious illness or injury and even some long-term sufferers find that they're not too badly off financially. But for those that get caught on the wrong side of the fence, the combination of ill health and financial strife can be hard to cope with.
It is never planned, but can happen to any of us. When long-term illness brings one to a halt, it can often bring our income to a halt also. Continuing to be able to settle one's routine bills, mortgage, electricity, gas, water, fuel and food, can become increasingly difficult as time goes on. The State safety net of statutory sick pay and the facilities of the NHS are now largely emergency only and only help part of the problem.
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.