Income Protection Insurance for Doctors and Surgeons

As a doctor or surgeon, you’ll know better than anyone that ill health or an accident can happen to anyone at any time and when it does, the financial consequences can be devastating.

Income protection insurance for doctors is a key component of financial wellness for anyone who earns an income. For doctors and other high-earning medical professionals, it’s simply a must-have.

But the right doctor’s income protection policy can get confusing, time-consuming, and frustrating fast. 

Fortunately, the right guidance and research can help you pinpoint your best available options. In this guide, we will help you understand exactly what doctors should (and shouldn’t) look for when shopping for doctor’s income protection. That way, you can purchase with confidence and get back to doing what you love.

Let’s get started.

Table of Contents

Why Doctors need Income Protection Insurance

The case for doctors and surgeons income protection insurance begins with a sobering reality.

According to research from Financial Services Council¹, nearly 300 kiwi families lose their income every week, because of long term illness that stopped a major earner in the household from working and earning an income (ACC does not cover: illness, sickness or mental health).

The truth is, the unexpected really can happen to you. As a highly-trained, highly-compensated medical professional, ask yourself the following questions:

  • What would you do if you were unable to work?
  • How would you be impacted financially if you lost your income for a year, two years, or permanently?
  • What would happen if you were limited to half your previous workload? 
  • What about if you had to work in a lower-paying specialty to compensate for an injury.
  • What would become of your medical practice if you were unable to treat patients?
  • How would the resulting loss of income affect your finances? How would that affect your lifestyle and your ability to provide?

Doctors are also able to enjoy comfortable lifestyles due to the high salaries they earn. You could not maintain yours without your career income. Plus, medical professionals have few to no options for replacement careers that pay what they make. With all that you have to lose, you should consider income protection insurance.

An injury or illness could limit your ability to work. The right doctors’ income protection insurance policy would replace some of that lost income.

What Does Income Protection Insurance for Doctors Cover?

So what is the best doctors income protection insurance? Income protection insurance is designed to protect against any medical eventuality (subject to your pre-existing medical history) that prevents you from working.

The most comprehensive disability insurance cover looks like this:

  • Provide longterm cover
  • Covers accidents and bodily injuries
  • Sickness and periods of ill health.

You can add on optional Redundancy Insurance for cover against the risk of forced redundancy.

Income protection insurance is a contract with an insurance company. You make regular premium payments to the insurer. You can pay by the fortnightly, month, quarter, or yearly. In exchange, the company agrees to pay you contracted benefits if you suffer a disability that affects your income. The benefits replace some or all of the income you lose by being unable to work.

What Doesn’t Doctors Income Protection Cover?

With any insurance you purchase, there are restrictions and exclusions in place as standard. It’s the same with Income Protection – not everything will be covered.

The major exclusion is anything related to pre-existing conditions – if you’ve suffered from a medical condition in the last years, it’s likely that there’ll be an exclusion on the policy for that medical condition.

However, there may be an opportunity after you’ve served a period on your policy without any advice, medication or treatment for the condition where there’s a chance the insurer will consider covering that condition. This will be reviewed on a case-by-case basis.

Aside from pre-existing conditions, most policies exclude self-inflicted injuries and any illnesses / injuries caused by misuse of drugs or alcohol and any criminal activity including any time in prison or home detention.

However, other than these most policies don’t have any standard exclusions. What you are and aren’t covered for will simply be dependent on your medical history at the time you take the policy out.

Market-leading features

Many insurance providers offer built-in benefits in their policies. Before selecting your policy, be sure to compare the built-in benefits so you can get the most value for your money. Here are the most common features

Partial Disability Income Benefit

You will be paid monthly in arrears if you have been totally or partially disabled and are working less than 75% of your pre-disability working hours or earning less than 75% of your pre-disability income.

Rehabilitation and Support

Supports you to put a recovery plan in place to help you return to work if you are disabled.

Recurrent Disablement Benefit

Restarts your monthly benefit if you become totally disabled again and it’s caused by the same or a related illness or injury.

24 x 7 Worldwide Cover

You are covered 24 hours a day, 7 days a week worldwide. Sometimes insurers apply an exclusion for Territorial Boundaries off New Zealand and Australia or specifically exclude cover in certain countries and areas. Such exclusions would be clearly shown in the policy document.

Premium and Cover Suspension

Lets you stop your premiums and cover for up to 12 months if you experience financial hardship, are unemployed, or are on sabbatical, parental, or long-term leave from work.

Overseas Return Home Benefit

Reimburses costs of up to $10,000 for you and one support person to return to New Zealand or Australia.

Premium Waiver

The insurer pays your income protection insurance premiums, if you can’t because you are disabled.

How much does income protection insurance for doctors cost?

Generally speaking, there is one rule of thumb on how much to spend:

1% – 5%

Between 1 percent and 5 percent of your current income.

Hypothetical policy examples

We make insurance easy to understand and our advice sticks. Our expert team has helped many doctors and medical professionals protect them and their family financially.  

Before applying for insurance and getting approved, we will provide you with and easy step by step recommendation

Example 1: Income Protection for Doctors

A 40-year-old female non-smoker receives a maximum monthly benefit of $12,500. The annual premium is just over $4,100. The policy includes any occupation with total permanent disablement. The policy looks like this:

  • Monthly benefit $12,500 
  • Waiting Period: 13 weeks
  • Payment Period: 5 years, 
  • Benefit Term: to age 65
  • Total Permanent Disablement: $600,000 – Any Occupation.

Example 2: Income Protection for Surgeons

A 45-year-old male non-smoker receives a maximum monthly benefit of $17,000. The annual premium is just over $8,000. The policy includes any occupation with total permanent disablement. The policy looks like this:

  • Monthly benefit $17,000 
  • Waiting Period: 8 weeks
  • Payment Period: to age 65
  • Benefit Term: to age 65 
  • Total Permanent Disablement: $900,000 – Any Occupation.

What impacts the cost for doctors income protection insurance?

The cost of income protection insurance for doctors will depend on a number of factors including:

  • your age,
  • your health,
  • the type of premium,
  • how much cover you need and
  • over how long you want the cover to run for.

Roughly speaking, a healthy doctor could get around $10,000 of income protection insurance for between $90 and $150 per month, dependent on age and the type of cover required. 

The best way to find out the actual cost of income protection is to speak to an advisor and get a personalised quote. 

Get started now!

Income Protection for medical professional

What impacts the cost for doctors income protection insurance?

Insurers underwrite income protection cover based on the risk or likelihood of an applicant placing a claim. During the approval process, underwriters also consider how long and how much a person might receive in benefits. When determining the cost of income protection insurance for doctors, insurance companies assess the following:


The older you get, the greater the risk of incurring a disability. Therefore, disability insurance is more costly for older people. Physicians should buy when they’re younger to obtain the lowest rates.


All other factors being equal, women can pay up to 20 percent higher premiums for disability insurance. Women suffer disabilities that impact their careers and file more claims than men. Claims for women also typically last longer.


Insurers will pay extra attention when assessing your health. You will be asked about your medical history and current health conditions. This includes your past and current tobacco use. You will also likely have to submit to a medical examination.

The exam is similar to a physical checkup. Your General Practitioner will conduct the exam. It is paid for by the insurance company. A nurse will record your height, weight, body mass index, pulse, and blood pressure. The examiner will collect blood and urine, if requested.

The nurse will ask several questions about your health. Some questions will be repeats of what you provided on the application. These include:

  • Family medical history
  • Pre-existing conditions
  • Medications you’re taking
  • Whether you drink or use tobacco

The answers you provide will serve to confirm the health information you provided in your application. They also inform underwriters of any medical concerns that could affect your risk.

Financial Underwriting Guide

Disability insurance benefits are based on a percentage of your income. Therefore, a key part of the underwriting process and a determining factor of your premium is how much you earn. This is done through financial underwriting.

The insurance company’s underwriter will assess your

  • Earned income
  • Unearned income
  • Income Splitting
  • Your bankruptcy history, if applicable

You will have to provide tax returns and business tax forms, if applicable.

For underwriting purposes, income is earned if a disability would stop or reduce it. Investment or business income that doesn’t require work on your part will not be factored into your financial underwriting.

Underwriters will assess an employee’s salary, wages, regular overtime, bonus, and commissions (less expenses). They may consider the employer’s contributions to your retirement plan. Any perks, such as vehicle allowances, will not be factored into your income.

If you own a medical practice, the underwriter will consider your share of the business’s earnings.

In addition, some policies will consider contributions made to a pension or profit-sharing plan as earned income. This includes a certain percentage of their salary or other designated maximum unless the contributions continue after you become disabled.

If your income fluctuates, the insurer will determine a maximum benefit amount using a weighted average over two to three years.

Benefit length

You can choose how long the policy will pay benefits. 

The longer you receive payments, the more you pay in premium. Some policies will pay a monthly benefit for a pre-established period, such as 10 years. Others will pay until you reach a certain age, typically 65. 

Most common is 2 or 5 years, until age 65 or age 70.

Waiting period

Disability insurance policies include a waiting period. It’s the period of time between when a disability occurs and when benefits are paid.

The waiting period for disability insurance is similar to the excess on car insurance. It’s the part you pay out-of-pocket before benefits kick in. The longer the waiting period on disability insurance, the less you will pay in premium.

Most common is 14, 30, 60 or 90 days. 

The definitions of disability

The most important factor when considering a disability insurance policy is how it defines “disabled.” This will determine how much, and even if, you collect benefits following an injury or illness.

Disability is not a black-or-white definition. Just being hurt or sick doesn’t qualify you for disability benefits.

A policy’s definition of disability is based on your capacity to work. Some policies consider you disabled if you’re limited in your ability to practice your specific medical specialty. Others will not pay benefits if you can work anywhere in the field of medicine. Lesser policies will not pay benefits if you can work at all.

To collect on a claim, you must meet the policy’s definition of disability. This can vary greatly by company and policy. Here is a breakdown of the most common definitions of disability in policies:

Best disability insurance companies for doctors in 2022

As you research income protection insurance for doctors, consider the insurance company who will issue the policy.

Sometimes cheap is expensive, because what the fancy brochures and discount’s don’t tell is:

  • Claims culture
  • Depth and quality of medical underwriting (speaks about how easy claims are paid)
  • Credit Strength and the ability to manage longterm cost of a claim

Why financial ratings are important

When you buy income protection today, you’re planning for tomorrow. You’re trusting on an insurance company to protect you and your family. You may depend on the company to provide a stream of monthly income for several years.

What if the insurer goes out of business or can’t meet its contractual obligations? The effect on you, your family and business could be catastrophic.

You can lessen this risk by choosing companies with superior financial strength. These are grades given by third-party rating agencies.

Agencies assign letter grades. Higher letter grades, typically anything with an ‘A’ — indicate better financial performance.

Some of the agencies that rate insurance companies and their top ratings include:

  • A.M. Best: A++, A+, A, A-
  • Standard & Poor’s:: AAA, AA+, AA, AA-, A+, A, A-

Below are New Zealand’s leading providers of income protection for medical professional. All insurers have strong ‘A’ financial ratings. 

AIA New Zealand Limited has been providing insurance to New Zealanders since 1981 and part of AIA Group with more than 100 years of history. As of April 2021, the company was rated AA (Very Strong) by Fitch Ratings. 

Asteron Life has roots back to 1878 in New Zealand. As of April 2021, Asteron Life Limited was rated A+ (strong) financial strength rating by Standard & Poor’s.

Fidelity Life was founded back in 1973 and has been looking after kiwis since. As of April 2021, Fidelity Life has an A- (Excellent) financial strength rating from A.M. Best
Partners Life was founded in 2011. As of April 2021, Partners Life has an A- (Excellent) with a Stable Outlook by A.M. Best.

How do medical professionals get income protection?

If you rely on your source of income to live life, then it makes perfect sense to protect that income from injury and illness with income protection insurance. But buying income protection insurance has always been a long, confusing process.

That is, until now. We make it easy.

Step 1: The recommendation

First, we look at your cashflow and give you a clear visual understanding of your current financial position. Secondly, we look at different scenarios and strategies to help reduce your debt (if any), thirdly we look at how to strengthen your cashflow.

Lastly, we look at how insurance can protect you, your family and your future plans.

Clients are often telling us this helps them with decision making around budgeting, family, work, business, lifestyle and retirement.

Income Protection policies have many moving parts and optional features. Therefore, it’s important to understand your situation in complete detail.

Step 2: Getting Approved for Income Protection Insurance

Once you’ve settled on a policy, the next step is applying for cover. First step is to complete a personal, professional, and basic medical information questionnaire.

Depending on the monthly benefit, you might be asked for the following evidence of income:

  • Pay slip or contract if employed
  • Self Employed – Full set of finalised accounts for 2 years
  • Other supporting evidence – Personal Income Tax Return, Business Income Tax Return
  • For sums assured > $180,000 – confidential financial report

If self-employed (e.g. sole trader or a partner in a business) insurable income also includes the appropriate share of the net profit (or loss) of the business, derived from the insured’s own personal exertion (after deduction of all business expenses), but before tax.

Step 3: The medical exam

Most likely, the insurer will request a medical examination and request a copy of your medical records.
A disability insurance medical exam is similar to a physical checkup. It should take about 30 minutes and will consist of an interview to gather a medical history. The examiner will record your:

  • Height
  • Weight
  • Blood pressure
  • Pulse
  • Blood test

This part of the application process is a crucial part of how the insurance company assess your health.

The more thorough the assessment, the better. Because at the point of claim, we don’t want any surprises that can jeopardise your claim.

Step 4: Offer of insurance

The finish line is now officially in sight.

Based on your risk assessment, you will receive an offer with a premium amount.

If you accept the offer, the insurance company will issue your policy.

Get Your Income Protection for Doctors Quote

The next step is to meet with a LifeCovered income protection advisor, who will conduct a free review.

Our advisers are happy to meet when and where it suits to fit into your busy schedule.

They can meet in person, via Skype, Zoom, Microsoft Teams, or simply by phone, at a time that works for you.

Start here by booking a time for a chat.