Same same but different: Why not all personal insurance is equal for medical practitioners

Having the wrong insurance as a medical practitioner can be an expensive misstep. As a financial adviser who specialises in advice for those in the healthcare industry, it’s a mistake I see all too often. So today, I want to share some insights into why not all personal insurance policies are equal for healthcare professionals.

Let’s look at the insurances you need and what they should cover to be right for you.

Life insurance for medical practitioners

You should have life insurance with enough cover to ensure that if you prematurely pass away, your family will have adequate means to cover the costs of their current lifestyle. Without this cover, they may need to sell the family home, move away from loved ones and/or send children to new schools. All of this can add stress on top of their grief.

In addition, if you own a medical practice with business partners, you should have a specific cover that addresses your ownership share. If you die without the right protection in place, ownership may revert to your spouse or other beneficiary, and this can add significant stress on both your loved ones and your business partners.

I’ve seen many practices assume their business or self-insurance covers this eventuality and it can lead to all kinds of difficult situations for the business, remaining partners and their spouse.

Total and Permanent Disability (TPD) insurance for medical practitioners

Of the main personal insurances, this is the least likely to be claimed, but it is one of the most devastating experiences if you aren’t covered. Essentially, this covers you for an accident or illness that leaves you permanently impaired and unable to work as a medical practitioner. It’s a difficult circumstance to think about, but it can and does happen.

As you may be aware from your own work, patients who are severely impaired or paralysed need significant and expensive medical care, modifications to the home and often a partner to give up work to provide full-time care.

And if you own a business, there are practical considerations you should be considering when it comes to your cover.  What does your business look like if you are unable to practise? Is there a liquidity function? For example, is there insurance to buy out that practitioner, and/or are there finances in the business to cover the practitioner and hire a locum for the short term whilst the business rethinks what it needs to do from that perspective?

Trauma or critical illness insurance for medical practitioners

This insurance is critical for medical practitioners for a few reasons. Firstly, the risk of exposure to illness and trauma is far greater for those in the profession. Secondly, the hours worked in the medical field combined with its stressful nature can increase the risk of traumatic health events, such as heart attack or stroke.

Trauma insurance provides a liquidity injection for the family and/or, where appropriate, business in the event of a trauma or critical illness. If you're working in your own practice, it’s likely you won’t be making money while you are unable to work, and this can be devastating if you don’t have liquidity. It can also impact your ability to pay for non-PBS medication or specialist medical care that is not covered by your health insurance.

A key area to consider is whether the policy covers needlestick injury. This is not often covered in standard policies because it is not a big risk for the average professional. For medical practitioners, it is critical.

If you have liquidity and the household cash flow is very healthy, you may not want this cover, but it’s worth talking to your adviser to understand the full picture and make an informed decision.

Don’t rely on the cover in your superannuation

You may have policies for life and TPD insurance within your superannuation, but it is a risk to rely on these alone. They are usually run-of-the-mill standard policies that won’t provide you with the specialist cover you need.

Your Apt adviser can do a full review of these included policies and advise on the best steps. It’s important to remember you are paying for this cover, so if it is not adequate for you, you are best to save the cost of the policies and put it into appropriate cover.

How to identify the right cover for you as a medical practitioner  

Of course, not all medical practitioners will need the same level of cover. Working with your Apt adviser and our insurance specialists, we’ll take a deep look at your circumstances, goals, finances and cash flow to identify the most appropriate cover for you.

We’ll also help you ensure it is structured in the most tax-effective way. In some cases, the right cover can cost the same or even less than an ill-suited policy in your superannuation. There are also options to pay some of your premiums through super, so it can be cost-effective too.

Insurance is one of those things that we can easily overlook or think we’ll do later. But sometimes, later is too late. In your field, you likely see the impacts of accident, injury or illness regularly. So don’t leave your business or your loved ones at risk any longer.

Talk to Apt Wealth Partners. We have an expert understanding of your profession. We also realise you are time-poor, so we do all the background work to get you the right cover.

Get in touch now to book your consultation.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.