Insurance for Medical Professionals

As a medical professional, there’s a lot riding on your good health

Your family and your patients depend on you and your good health. And if you run your own practice, you may have business partners and employees who also rely on your ability to work (as you rely on theirs).

You can’t always control the circumstances impacting your health, but you can control what plans you put in place to protect:

  • yourself;
  • your family; and
  • your business.

Important questions to ask yourself

What would be the financial consequences of an illness or injury that left you, or a key business partner or employee, unable to work for three months? How about a year? And what if you were permanently unable to earn an income?

  • How would your family survive?
  • How would your business survive?

What are the odds of suffering a serious illness?

The statistics around serious illness can be sobering:

  • Over 6300 Australians under the age of 50 will suffer a heart attack each year (1)
  • Stroke is the leading cause of long term disability, affecting 60,000 Australians each year, or one stroke every 10 minutes (2)
  • 1 in 3 men and 1 in 4 women will be diagnosed with a malignant cancer before the age of 75 (3)
  • Every working Australian has a 1 in 3 chance of becoming disabled for more than three months before reaching retirement age (4)

What do medical professionals claim for?

Examples of claims recently paid to medical professionals by Zurich Australia (5) include:

Age Profession Condition Income Benefits Paid
41 Surgeon Carpal tunnel syndrome $237,000
31 Physiotherapist Post Viral Fatigue $173,000
34 General Practitioner Chronic Migraine $66,000
44 Psychologist Broken ankle $55,000
56 Chiropractor Shoulder surgery $20,500

What does a protection plan include?

A qualified financial adviser can help you put a protection plan in place, which is:

  • Tailored to your individual circumstances
  • Tax effective
  • Flexible

Such a plan would typically cover off:

  • Debt repayment (to cover personal loans, mortgages)
  • Income replacement (to meet day to day personal living expenses, groceries, electricity, school fees, fuel bills, etc)
  • Cover against increased medical expenses

And if you run your own practice, you may also need to consider:

  • Business debt repayment
  • Key person protection for partners or employees
  • Cover for fixed business expenses (which continue even if you couldn’t work), such as rent, staff salaries
  • Locum hiring costs

Tax effective protection

One of our advisers can also help ensure your plan is structured in the most tax effective way possible, in terms of both tax deductibility of premiums and tax treatment of any benefits paid. Issues that generally need to be considered include the implications of holding cover inside or outside superannuation and policy ownership and beneficiary structures.

A definition of disablement tailored to the medical profession

When considering income protection and business expense coverage, it is important to ensure that way disablement is defined reflects the unique characteristics and circumstances of your profession.

For example, a surgeon with HIV or Hepatitis may be symptom free and physically capable of performing all the aspects of their normal occupation, but:

  • are prevented from doing so by a health authority or professional association; or
  • are required to disclose their health status, which results in a loss of custom.

In these circumstances, it is important to have a definition of disablement based on ‘loss of income’. A common definition of disablement based on physical ability may not offer cover in these circumstances.

Similarly, some insurers now also offer a 10 hour definition. This has proved popular with those running their small practices, as it allows the life insured to return to work for up to 10 hours per week without jeopardising a claim.

Specialised cover for needlestick injuries

Despite procedures and equipment designed to minimise the risk of needlestick injury, the number of needlestick incidents each year remains significant, with the latest figures showing there are around 18,000 reported ‘sharps’ incidents in Australia each year (1).

The chance of being infected with one of the following viruses through a sharps accident is:

  • one in every 200 for HIV
  • two in five for Hepatitis B
  • one in 10 for Hepatitis C (2)

Just as there are steps you can take to reduce the risk of a sharps incident, there are steps you can take to minimise the financial impact – potentially devastating – of conditions acquired through such incidents.

A number of insurers now offer specialised needlestick insurance, providing a tax free lump sum in the event of a covered needlestick injury. This could provide vital financial support at a time when your ability to work, and earn an income, could be compromised. This type of cover can be very affordable and easy to apply for.

Notes

  1. Source: AIHW National Hospital Morbidity Database, Separation statistics by principal diagnosis in ICD-10-AM, Australia, 2007-08
  2. Source: ‘What is a stroke?: Facts, figures and statistics’, National Stroke Foundation Website 2009
  3. Source: ‘Australia’s Health 2008’, Australian Institute of Health and Welfare 2008.
  4. Calculations are based on data from the Institute of Actuaries of Australia 2000. Interim Report of the Disability. IA Aust: Sydney.
  5. Zurich Australia Life Risk claims analysis 2010.

Disclaimer

This material is not intended to constitute personal advice and must not be relied upon as such. This material is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. You should consider the appropriateness of this material having regard to your objectives, financial situation and needs and consider obtaining independent advice from a licensed financial adviser.