DISABILITY INSURANCE
Income Protection Insurance for Doctors and Surgeons
Medical professionals, who traditionally earn high salaries and have specialised skills and extensive training, might consider purchasing loss of earnings insurance tailored to their occupational class.
A doctor’s salary is a valuable asset, so protecting it with loss of earnings insurance makes sense.
In this review, we compare a few of the top options. Read on for our top picks to decide if they might be the right fit for you.
| AIA | Asteron | Chubb | Fidelity Life | Partners Life | |
| Credit Rating | AA (Very Strong) by Fitch | AA- (Very Strong) Standard & Poor's | A (Excellent) A.M. Best Company Inc | A- (Excellent) A.M. Best Company Inc | A (Excellent) A.M. Best Company Inc |
| Waiting Periods | • 2 Weeks • 4 Weeks • 8 Weeks • 13 Weeks • 26 Weeks | • 2 Weeks • 4 Weeks • 8 Weeks • 13 Weeks • 26 Weeks | • 4 Weeks • 8 Weeks • 13 Weeks • 26 Weeks | • 2 Weeks • 4 Weeks • 8 Weeks • 13 Weeks • 26 Weeks | • 4 Weeks • 8 Weeks • 13 Weeks • 26 Weeks |
| Maximum Benefit Period | To age 70 | To age 70 | To age 70 | To age 70 | To age 70 |
| Maximum Monthly Payout | • 75% of the first $320,000 p.a. • 50% of the next $240,000 p.a. • 20% for any excess income | • 75% of the first $320,000 p.a. • 50% of the next $240,000 p.a. • 20% for any excess income | • 75% of the first $250,000 p.a. • 50% of the next $150,000 p.a. • 20% for any excess income | • 75% of the first $320,000 p.a. • 50% of the next $120,000 p.a. • 20% for any excess income | • 75% of the first $320,000 p.a. • 50% of the next $120,000 p.a. • 25% for any excess income |
| 2022 claim pay-out rate | 93% $74.4m paid last year | 92% $28m paid last year | 93% n.a. | 93% $37.4m paid last year | 89% $177m paid last year |
Key features of income protection for doctors?
- Designed to protect up to 75% of your gross monthly income
- Pays out if you cannot continue working due to any medical reason, including an accident or illness
- Pays after a waiting period, typically 4 or 8 weeks
- Benefit period ends after 2 or 5 years, or at retirement age
- Rehabilitation & retraining support: Helps you with your rehabilitation and retraining costs
What's the Best Income Protection Insurance medical professionals?
The best policy for you depends on your specific needs, but here are our picks for the companies offering the best disability insurance coverage.
- AIA
- Asteron Life
- Chubb Life
- Fidelity Life
- Partners Life
We will discuss why these are our top picks for income protection insurance later in this article. But first, it’s important to discuss the definitions of disability so that you know what to look for when choosing coverage. These definitions significantly impacted our choices above, so read the next section.
Compare Best Income Protection for Doctors
AIA
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
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.
Chubb Life
Fidelity Life
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
Partners Life was founded in 2011. As of April 2021, Partners Life has an A- (Excellent) with a Stable Outlook by A.M. Best.
Income Protection Insurance for Medical Professionals
To properly evaluate medical professionals’ disability insurance, you must first understand insurance and what criteria to consider when choosing a provider.
What is income protection insurance?
Income protection insurance provides financial support for people who can’t work in their chosen field due to illness, injury, or emotional, physical, and mental burnout. Individual policies can be purchased, or employers may subsidise them. Disability insurance is a preventative measure, giving you a financial backup plan if you cannot work.
There are two main types of disability insurance:
- Mortgage & Rent Cover: benefits are tax-free and have no offsets. Pays until retirement age.
- Loss of Income insurance: premiums are tax-deductible; therefore, the benefit is taxable. The policy may be offset against other benefits. Pays until retirement age.
Policies vary depending on occupation type, risk factors, length of coverage, specific riders and other criteria. Policies are usually tailored to the individual purchaser, with premiums and deductibles determined during the buying process.
How does income protection insurance work?
When you apply for disability income insurance, an underwriter will assess your risk based on your background, occupation, medical history, current health, personal habits, and income.
The company will then use this information to determine how much disability insurance you qualify for and establish your insurance premiums.
Once your policy is active, you pay regular premiums to keep coverage going. If you suffer an illness, injury, or emotional, physical, and mental burnout that prevents you from working, you can file a claim with your insurance company. As your disability insurance broker, we are here to help ease the claims process and ensure it goes as smoothly as possible.
Following a previously mutually agreed upon waiting period, you can then begin collecting insurance payments. These payments continue until you are physically and mentally ready to return to work or your benefits lapse. Many factors affect how long your insurance benefits will continue, including occupational rehabilitation considerations, medical recommendations and company policies.
Types of income protection for medical professionals
Like people in other occupations, doctors can choose from various insurance plans with varying waiting periods, coverage lengths, and protections. However, other factors can inform the type of insurance physicians need.
For example, although many physicians earn high salaries, this is not always true. Additionally, most physicians have loans from their education and training that can vary significantly in amount.
Further, physicians who own their practice must consider business costs and malpractice insurance. These overhead costs mean they need a financial safety net in case of a sudden injury or illness that renders them unable to work.
For medical professionals, there are a few different classifications of disability insurance to consider.
Partial Disability
Like people in other occupations, doctors can choose from various insurance plans with varying waiting periods, coverage lengths, and protections. However, other factors can inform the type of insurance physicians need.
For example, although many physicians earn high salaries, this is not always true. Additionally, most physicians have loans from their education and training that can vary significantly in amount.
Further, physicians who own their practice must consider business costs and malpractice insurance. These overhead costs mean they need a financial safety net in case of a sudden injury or illness that renders them unable to work.
For medical professionals, there are a few different classifications of disability insurance to consider.
Key person cover
One of the most overlooked risks for many medical practices is the disability of a key employee or business owner.
Just ask yourself: What would happen to your business if your top physician had a severe illness and could not work for a year?
Or worse, a business partner is in an accident that renders her incapacitated for the foreseeable future?
Business expenses cover
Physicians can keep their businesses running with business expenses covered if they suffer illness or injury.
Doctors and medical professionals operating as sole proprietors, small business owners, or partners can claim the costs of running their businesses if they cannot work due to illness or injury.
What Does Income Protection Insurance for Doctors Cover?
So, what is the best general practitioner income protection insurance?
Income protection insurance protects 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 primary exclusion is anything related to pre-existing conditions. If you’ve suffered from a medical condition in the last few years, there’ll likely be an exclusion on the policy for that medical condition.
After a period of time without treatment, your insurer may consider covering your condition. This will be reviewed on a case-by-case basis.
Aside from pre-existing conditions, most policies exclude self-inflicted injuries, any illnesses or injuries caused by misuse of drugs or alcohol, and any criminal activity, including any time in prison or home detention.
However, most policies don’t have any standard exclusions other than these. What you are and aren’t covered for depends on your medical history when you remove the policy.
How much does income protection for doctors cost?
A popular rule of thumb is to expect to pay 1%-4% of your annual salary.
Example 1: Income Protection for Doctors
A 40-year-old female non-smoker receives a maximum monthly benefit of $12,500. The annual insurance payments are just over $4,100. The policy covers any occupation with total permanent disability cover.
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 covers any occupation with total permanent disability cover.
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)
Similar Insurances for Medical Professionals
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a deeply personal approach
Matters of family and wealth are always deeply personal.
The same goes for how we work with you.
From our first meeting to regular reviews, every touch feels human, even when discussing numbers, financial protection, and retirement.
We aim for simplicity with one plan, no beating around.
We seek to understand where you are at and where you want to go.
Together, we explore insurance options that might fit you and your budget.
Once a financial protection plan is chosen, we'll activate the plan and schedule annual follow ups to make sure the plan stays on track.
FAQ's
What impacts the cost for doctors income protection insurance?
The cost of income protection insurance for doctors will depend on some 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, depending on age and the type of coverage required.
The best way to determine the actual cost of income protection is to get a personalised quote from an advisor.
Get started now!
What should physicians look for in loss of earnings insurance?
Doctors have unique professional needs, and their income relies on their ability to perform highly specialized tasks. Therefore, physicians must have income protection insurance that provides a true own-occupation definition of disability. To ensure the policy is tailored to their needs, doctors should work closely with a financial professional to customize their insurance plan’s other terms and provisions.
- Willi Olsen
- 11 November , 2023