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The importance of income protection

4 min
Male dentist with patient

Bal Thandi shares the story of Michael Liu, a qualified dentist who was left paralysed from the chest down following a spinal cord infection.

Two years after graduating as a dentist, Michael Liu became a self-employed associate. At this stage, he thought it might be a good idea to take out an income protection policy, as well as critical illness cover.

That decision would prove to be one of the best he ever made.

In 2016, more than two decades after taking out these policies, Michael began to feel unwell.

He was later diagnosed with a spinal infection that left him paralysed from the chest down, excluding his hands.

Michael’s story

Speaking to Bal Thandi, Michael said: “For about a week or so, I was feeling under the weather. Then I woke up one morning and found I couldn't stand up.

“I went to the hospital, and they did a lot of tests. By that time I was getting increasing paralysis in my legs, and it was affecting other parts of my body.

“They sent me to the neurological department at Charing Cross where I was diagnosed with an infection on my spinal cord, around the C6, C7 region.

“I had an emergency operation to relieve the pressure, which went satisfactorily well, but unfortunately it's left me tetraplegic. Although it hasn't really affected my hands, it's left me unable to do my job as I would have been able to do it previously.

“When I was in hospital, I was thinking: ‘I've got outgoings. I've got responsibilities at work that I won't be able to fulfil.’ With the help of my family I investigated the policies I had in place, and they turned out to be of great use. I can't state how important they are.”

‘Own occupation’ income protection

Michael had an income protection policy in place with an ‘own occupation’ definition of incapacity. This means that if you cannot carry out your professional role, the policy will pay out up until its end date or when you go back to work.

Without it, there is a risk that the policy won’t pay out if you’re able to take up another occupation instead.

Having this policy in place meant that Michael was able to focus on his recovery and didn’t need to dip into his pension pot to cover expenses while unable to work.

Michael added: “When you're recuperating and going through rehab, the last thing you want to have is financial worries.

“Having a policy like this is one of the most important things people can have. Illnesses and life-changing injuries could happen to any of us, at any time - and often when you least expect it.

“It’s easy to think, especially when you’re young, that it won’t happen to you. But no-one knows what the future holds, and this sort of protection provides real peace of mind. I can’t recommend it enough.

“Dentists have all sorts of policies in place, such as public liability, that are compulsory. I believe income protection should also be compulsory because you're protecting your body, which is your greatest asset.

“Having the ‘own occupation’ policy was great, because otherwise you could be sent to do a job that you don't want to do, which could make your physical condition deteriorate.

“For me, I find sitting in my wheelchair tiring after a few hours – I need to move, but I can’t physically stand up and stretch like anyone else might do after sitting for a long time. So, a job that involves a lot of sitting would be detrimental to my health.

“I was trained to do one job. And if I'm not going to do that job, I need to concentrate on other things, like my own physical and mental wellbeing.”

Income protection and critical illness cover

Michael had both income protection and critical illness cover with Wesleyan Assurance Society.

Income protection pays out a regular monthly income after an illness or injury that leaves you unable to work to maintain your standard of living until you’re able to return or until the end date of your chosen plan.

Critical illness cover also provides the policyholder with a monthly income following diagnosis with a serious health condition, but it also pays out a lump sum amount that can be used for a variety of purposes – for example, paying off your mortgage or simply maintaining your lifestyle.

A key difference between the two types of cover is that critical illness protects you for a specific number of conditions, while income protection covers you for any condition that has been signed off by a GP or consultant.

Income protection tailored to dentists

In 2021, Wesleyan paid out 100% of new claims made by dental customers for personal income protection benefits. The top three types of claims were made for musculoskeletal issues, mental health problems and COVID-19.

If you would like to discuss your options for protecting your income should the unexpected happen, you can book a no-obligation financial review with Wesleyan Financial Services.

About the author
Bal Thandi
Bal Thandi

Specialist Financial Adviser at Wesleyan Financial Services

Bal is a Specialist Financial Adviser for Dental and Medical professionals, their families and friends in the London area. She has worked in Financial Services since 1984 and has been with Wesleyan since 2015. Bal can advise you in all financial areas and her expertise includes the NHS Pension Scheme, Investments, Mortgages, Protection as well as Commercial advice.

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