Insurances for junior doctors – what to consider

— 8 min read

Insurance provides a vital part of every doctor’s wealth creation and protection plan, with five different types of personal insurances for junior doctors available.

It can be overwhelming knowing what sort of insurance will be necessary when you start your medical career. The insurance consultants (risk advisers) at DPM are here to educate doctors and provide a tailored solution to meet their present and future needs.

Personal insurances to consider as a junior doctor

Income protection insurance – junior doctors need to protect their biggest asset = themselves

Income protection insurance replaces income if you are off work due to illness or injury, you are able to apply for a monthly benefit that represents up to 75% of your income including super and salary packaging.

The benefit is paid if you are off work for longer than your waiting period and will continue to pay you until you either return to work or the expiry of your benefit period.

The ability to earn an income can be seen as your most valuable asset. Especially in the case of medical professionals who may have significant debt when starting out from the substantial time of study and living expenses during medical school, income protection is a vital element of a robust protection plan for you and your family.

Waiting periods range from 14 days to 2 years with the shorter waiting period being more expensive, the appropriateness of each waiting period will depend on levels of savings, sick leave that has been accumulated and the immediate expenses that will need to be paid whether or not you are working.
Benefit periods ranged from 12 months to age 70, longer benefit periods provide coverage if you are never able to return to work again.

Life insurance – the ‘worse case scenario’ protection for junior doctors’ families

Life insurance works quite differently from income protection in the way that it doesn’t cover you but your family after you’re gone.

It is a lump sum that is paid to a nominated beneficiary upon your death, this cover can be held inside or outside of Super (for more information read Insurance in my superannuation fund – should I or shouldn’t I?).

There are common life events that would act as triggers to consider life insurance. These include major changes in your personal circumstances such as purchasing a home, entering a dependent relationship or starting a family.

Total and Permanent Disability insurance (TPD) – the ultimate safeguard for doctors in training

TPD is a lump sum paid to an individual if it is deemed that they will never be able to work again. The cover can be ‘own occupation specific’ which means that you could claim on your TPD cover in this instance if you can never practice medicine ever again, even though you are able to work in some other field or industry.

Or, it can be ‘any occupation’ definition which in this case would see you claim the benefit of your cover if you can never work again in any capacity, in any sector.

An important distinction between the two solutions is that any occupation TPD can be held inside or outside of Super while own occupation TPD can only be held outside of Super.

Again, major life changes such as purchasing a home, entering a dependent relationship or starting a family may trigger the need for TPD insurance, but it may also be appropriate for singles who are renting so that they can afford to either continue to rent or to purchase a home.

Crisis insurance – the junior doctors’ reality check cover

This is now part of your life as a doctor in training, seeing patient after patient with potentially very serious, sometimes fatal diagnosis. This is very real and it doesn’t always happen to others!

Crisis insurance, also commonly known as trauma insurance, is paid as a lump sum upon diagnosis of serious medical conditions such as cancers, heart attacks and strokes.

The benefit of this cover can be used to fund the associated medical cost. If you have income protection, it also helps supplementing your reduced income whilst you’re sick and not able to work.

If you’d like to chat to one of our personal insurance experts about your personal circumstances, understand the different insurances for junior doctors and find out how your future can be safeguarded, book a no-obligation initial consultation or call 1800 376 376.

Disclaimer: * The information contained in this site is general and is not intended to serve as advice. DPM Financial Services Group recommends you obtain advice concerning specific matters before making a decision.

Authors

Tom Rogers

B. Comm (FinPlan)

Consultant
Melbourne

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Tom joined DPM in 2016 and has more than 8 years industry experience. He establishes close relationships with his clients and provides holistic insurance advice to ensure both themselves and their families have financial peace of mind.