Insurance is an essential part of our everyday lives. We insure our cars, homes and contents; but often we neglect to properly insure our most important assets – ourselves. Personal insurances come in many different forms, and Walshs can assist in determining the right level of cover and the right insurer, as well as providing exclusive benefits for medical practitioners through our national network.
So, what insurance should you as a doctor be looking at? There are 5 main insurances which you will need to consider throughout your working life; Income protection, Trauma, Needlestick, TPD & Death insurance.
This type of insurance is designed to replace the majority of your income in the event that you are unable to work through accident or illness whether at home or work, and whether in Australia or abroad. Income protection will help you avoid the financial stress of drawing down on your assets or taking on more debt if something unexpected were to happen, and to provide a guaranteed income up until retirement – as if you were still at work. These payments may be treated almost as if they were your regular pay cheque and used to pay your rent or mortgage payments, day-to-day living expenses and medical expenses. The premiums you pay for ensuring you are covered going forward are generally tax deductible, as any benefits from this insurance are generally included as taxable income.
How does it work?
The benefit amount is the monthly payment you will receive if you are unable to work due to injury or illness, and is provided at up to 75% of your insurable income. This is where choosing the right insurer is extremely important – different companies have different benefit amounts available. Here at Walshs we have negotiated a much higher insurable salary for doctors in their first few years as medical professionals. This monthly benefit is linked with inflation, so the real-dollar value of the benefit does not decrease over time.
The benefit period is the maximum period of time you will be eligible to be paid under the policy. The benefit period commences at the end of the waiting period, once benefits become payable. We usually recommend a benefit period to age 65, to provide a guaranteed income until retirement. Most income protection through Superannuation has a benefit period of around 2 years, or to end of employment contract.
The waiting period is the minimum period of time that must elapse before you qualify for any benefits to become payable under the policy. This depends on your individual situation, including other insurances such as the automatic salary continuance cover you will have with Qsuper (see the last section). The waiting periods range from 14 days up to 2 years, with the most common being 30 & 90 day waiting periods.
Traumatic Illness Insurance
Trauma (also known as Critical Illness) Insurance pays you a lump sum benefit if you were to suffer a specified medical event, such as cancer, stroke or heart attack. The additional funds which Trauma Insurance provides can alleviate the financial strain of major hospital expenses, repayment of debt and may also allow you to obtain additional or superior medical treatment and even take family out of work/school to spend time together after a diagnosis.
Needlestick insurance provides a lump sum payment if you are infected with Hepatitis B & C, or HIV whilst working as a medical professional. The method of contraction is not set, and can be from needlesticks (as the name elucidates), suturing, broken slides, open cuts or any other work accident. This insurance is incredibly cheap, usually costing around $110 a year for a 25 year old male for $200,000 of cover.
Total and Permanent Disability
Total & Permanent Disablement (TPD) insurance pays a benefit if you become totally and permanently disabled. It can assist you with medical and rehabilitation costs and provide you and your family with financial security. It can be written as ‘own’ occupation or ‘any’ occupation. Own occupation definition is far more specific to your current occupation, for instance a surgeon who loses function in their fingers, wrist or hand may be able to claim on an ‘own’ occupation definition. Under an ‘any’ occupation definition, they may still be able to work as a normal doctor without doing surgery, and thus not be eligible for a claim even though income has decreased dramatically. We believe an ‘own’ occupation definition should be applied in almost all circumstances.
Death or Term Life Insurance pays a benefit in the event of your death or on diagnosis of a terminal illness. Term life can help clear debt and cover your family for expenses, such as rent or mortgage payments and school fees. It helps secure your family’s future if you are no longer around.
QSuper automatic cover
As an employee of QHealth with a QSuper superannuation account, you have automatic cover for Salary continuance, Death & Temporary and permanent disability. These insurances are provided at a reduced rate due to being group policies, however the policies are not comprehensive – for example, the TPD cover is an ‘any occupation’ definition.
Salary continuance is similar to Income protection, however the QSuper policy is limited to 75% of your actual income per month, so the benefit for an intern will be around $3750 and the benefit period is up to 2 years or the end of your contract (usually 1 year max).
The Benefits of using a specialist firm
Choosing a firm whose specialty lies with managing the financial affairs of medical professionals will ensure you get the best advice, products, and service possible. We have extensive knowledge of the complete financial situation of medical professionals, including knowing all of the allowable deductions and structures for tax, ensuring we minimize your tax payable whilst staying within the law.
As a result of being at the forefront of our industry in Queensland, we have become affiliated with a national network of the largest doctor-focused financial services companies around Australia. This national network allows us to negotiate exclusive specials for our clients in investments, property loans and many more. Even though we are affiliated with similar companies around Australia, Walshs is an independent firm so we have no obligation to recommend a particular product set or service – if we think it’s the best for you, that’s what we’ll recommend.
From the 20 years we have been looking after medical professionals, Walshs have the experience and insight to put you on the best financial pathway from the earliest possible time.
If you have any questions or would like an obligation free quote, please send an email to firstname.lastname@example.org, or give us a call on (07) 3112 5450. We are always more than happy to help!
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This article is not a substitute for independent professional advice and any advice given is general in nature and does not consider your personal circumstances. Walshs Financial Planning Pty Ltd ABN 822 122 293 912 AFSL 432636 (known henceforth as “Walshs”) does not warrant the accuracy, completeness or adequacy of the information or material in this article. All information is subject to change without notice. Walshs disclaims liability to all persons or organisations in relation to any action(s) taken on the basis of currency or accuracy of the information or material, or any loss or damage suffered in connection with that information or material. You should make your own enquiries before entering into any transaction on the basis of the information or material in this article. Please ensure you contact us to discuss your particular circumstances and how the information provided applies to your situation.