Why do I need to protect my income?
As a student, you will know only too well that accidents happen all the time and people of any age can get sick.
NHS staff have some of the highest rates of sickness among public sector employees and face several barriers to addressing health issues.
Whilst some health problems can be directly linked to lifestyle, no one is excluded from the risk of some diseases and random accidents. It is likely at some point you will become someone's patient.
- 78% of disabled people in the UK, acquire their impairment aged 16 or older (Workforce facts on disability 2011)
- Around 325,000 people were diagnosed with cancer in 2010 in the UK, that's 890 people each day. (Cancer Research UK Dec 2012)
- 2.55 million working age claimants of ESA and incapacity benefits in February 2012, (DWP Statistical Summary Dec 2012)
Consider the following: As you progress to the next stage in your career, have you stopped to think what would happen if you were unable to practice as a doctor due to illness or disability?
All your hard work and achievements could be at risk. How would you pay for your loans, bills, mortgage or rent, or live the life that you have studied and worked for. You could potentially face severe financial hardship.
How much NHS Sick Pay can I get?
NHS Sick Pay during your first foundation year is limited - you won't receive any sick pay at all during your first four months and then you 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 needlestick injury.
Cover for the following may also be important to you:
- Complications of pregnancy
- Career break or sabbatical options
- Worldwide cover
- Dangerous sports for example rock climbing, scuba diving or horse riding (amateur level)
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 already have an income protection policy, you should review this now to make sure that the level of benefits you are entitled to keeps pace with your earnings.
Your Student Liaison Manager can provide you with free income protection during your fourth and final year of study. This keeps you protected whilst you are not earning. Get in touch with your Student Liaison Manager to find out how you can apply.