Importance of Income Protection Policies
As an anaesthetist you may come across many patients with various diseases on a daily basis. While administrating aesthesia various precautions are taken by both you and the hospital to prevent infection of any kind. However; at times, there are instances of anaesthetists getting infected with blood borne diseases due to being pricked with an infected needle. Moreover, recent studies indicate that doctors, nurses, surgeons and anaesthetists are more likely to develop mental diseases such as depression and anxiety than other professionals. At such times, income protection plans can ensure that you and your family have money to run your household every month.
Each insurer has a different set of eligibility criteria for different professionals however; in general it can be stated that Australian residents who work for a minimum of 20 – 35 hours as anaesthetists can apply for these income covers. The professional should be a licensed practitioner at the time of purchasing the policy and should either have a job or should be self-employed under the declared profession. Claim related eligibility criteria include, complete claim forms supported with documents such as proof of income if required. People who purchase indemnity contracts will have to submit the proof of income at the time of purchasing the policy.
Usually income insurers give buyers the option to insure up to 75% of their annual pre-tax income however; buyers usually have a choice to insure themselves for a lesser amount. Buyers who choose to insure themselves for the highest amount will get maximum benefits such as guaranteed payouts for agreed value contracts and maximum compensation payouts for the entire benefit period. Anaesthetists are generally advised to opt for a contract with the maximum benefit period, maximum compensation payout and maximum additional benefits due to the nature of their profession and the risks their profession possess on their health.
Benefits of Income Protection
Income insurance for anaesthetists ensures that the policy holder gets a choice of benefits when he is purchasing a policy. While some insurers may offer only basic compensation benefits along with needle stick covers, other insurers may also offer compensation benefits for mental illnesses, compensation benefits for other illnesses and the inflation benefit.
The basic compensation benefit ensures that the policy holder gets monthly compensation amounts if he is diagnosed with an illness that prevents him to work. These payments are given to the policy holder either until the benefit period is active or until the policy holder turns 60 or 65 years old.
The needle stick cover offers the policy holder a lump sum one time payoff when he contracts a blood borne disease such as Hepatitis C or HIV due to being pricked by an infected needle while at work.
The mental illnesses cover, offers the policy holder 1 or more compensation payments when he is unable to work due to being diagnosed with one or more mental illnesses. The mental illnesses cover is considered a must for those medical professionals who either earn a high income, do not want to compromise on their lifestyle, have dependants or have a susceptibility to developing emotional or mental problems.
The inflation benefit ensures that the policy holder’s policy grows with inflation and the policy holder receives higher compensation payments when he files a claim. This perk is usually charged at an extra fee and the rate of inflation is calculated according to the CPI index.
The day one claim benefit is one of the most beneficial perks that Australian insurers offer to buyers. This paid benefit, can ensure that if needed, you have the option to file a claim while the waiting period is still active and that you get the compensation payouts as soon as the waiting period is over. Adjustments if any are also made at this time.
The accommodation benefit and the rehabilitation benefit are usually included in the cost of income protection insurance plans. These benefits prevent the policy holder from having to spend additional money from his pocket if his friends need to take care of him and need a place to live or if he needs to go to physical rehabilitation for an injury. Both external accommodation and physical rehabilitation treatment can be expensive especially if the policy holder is temporarily unemployed. The definition for these benefits may differ slightly between insurers.
What To Remember
Buyers must remember that choosing the right benefit period and the right benefits can make a significant difference on their future. A longer benefit period will ensure that the buyer gets the guaranteed payments or variable payments from the insurer along with additional perks for a longer time. Choosing the right benefits and customizing the policy as per your requirements will help you get a policy as per your needs while saving money if you do not need any benefits that can be left out.
Although it is commonly believed that indemnity contracts should be avoided, in reality indemnity contracts help buyers save money and are ideal for those buyers who are employed by an employer. These contracts should be avoided by self-employed anaesthetists who earn a varying income every month.
Self-employed anaesthetists may also want to consider purchasing a business expenses insurance plan since this type of insurance will pay for fixed costs of running a business if the self-employed professional has to take leave for a few days due to health issues.
Buyers should make it a point to check the definitions of the contract carefully before purchasing it. In addition, buyers should read the fine print of the contract, go through the product disclosure statement which is a legal document given when a policy is purchased. Buyers should also check if their contracts have words such as exclusions or premium loading fees since these words imply that the policy holder is not eligible to receive payments in some scenarios or has to pay loading fees while filing claims. Buyers who want to enjoy tax concessions and benefits should consider opting for the services of a financial advisor who can give advice based on the terms of the selected plan.