Now you're contributing to the NHS Pension Scheme, make sure you understand the benefits.
Why do I need to protect my income?
As a junior doctor, you will know only too well that accidents happen all the time and people of any age can get sick.
But just because you work for the NHS, it doesn't mean your salary will continue indefinitely if you can't work due to a serious illness or accident.
Your debts won't go away just because you are sick, so whilst your student loans can be deferred. You will still need to pay for
- Overdraft, credit cards, personal loan repayments
- Rent or mortgage, plus gas and electricity
- Mobile phones, satellite tv and broadband
- Food and travel costs
How would you do this if you were off sick for a significant length of time?
How much NHS Sick Pay can I get?
NHS Sick Pay for Foundation Doctors is limited - you won't receive any sick pay at all during your first four months and then you could only be entitled to one month's full pay and two month's half pay.
This increases with each year of service, reaching a maximum of six months full pay and six months half pay after five years. NHS Sick Pay won't permanently replace your income, so any long-term absence from work will seriously affect you financially.
How can I protect my income?
It's vital to protect your income with an income protection policy. This will pay you a tax-free income that is usually around 50% of your 'pre-incapacity' earnings until you return to work, die or reach the selected end date.
Permanent income protection allows you to claim as many times as is required and the amount you receive can rise with inflation, depending on the type of policy.
What should I look out for?
It's very important for doctors to consider 'own occupation' income protection cover - this will pay out if you can't perform your chosen speciality. So if you were ill and unable to work as a surgeon, you would still receive payments even if you were able to work as a GP.
It's also vital that doctors are covered for HIV infection through needle-stick injury.
Cover for the following may also be important to you:
- Complications of pregnancy
- Career break or sabbatical options
- Worldwide cover
- Dangerous sports (ie rock climbing, scuba diving or horse riding)
It's unlikely that the insurer will pay out whilst you are receiving full sick pay, so doctors should avoid paying extra for policies that promise to pay out before your NHS Sick Pay reduces to half pay.
Why do I need to protect my income now?
Newly qualified doctors earn more than most graduates and you can quickly get used to your level of income. If you were off work for an extended period of time, your level of income when your NHS Sick Pay dropped and then ended might come as a bit of a shock.
Your cover needs to be in place as soon as possible to ensure that you are protected before something goes wrong. Once you have been ill, you could find that premiums will be more expensive or will exclude certain conditions, so it's important to take out cover whilst you are young and hopefully healthy.
What should I do now?
If you took out an income protection policy as a student, you should review this now to make sure that the level of benefits you are entitled to keeps pace with your earnings.
Your local Wesleyan Medical Sickness Financial Consultant will be pleased to review your situation and can discuss the tailored income protection we can provide. This includes the Wesleyan Medical Career Protector, an income protection policy specifically tailored to the needs of doctors in the years immediately before and after qualification.
Contact us today if you would like to arrange an appointment.