Income Protection for Dentists from BDA Plus
Income Protection for Dentists from BDA Plus
If you were to suffer an illness or injury that prevents you from generating income, how would you provide for you and your family? If you do benefit from some form of financial protection, how confident are you that it will meet your requirements especially when recent predictions for the economy mean that your money might have to stretch that much further?
For a professional, a dental income protection policy is more than just a sum of money in a time of need. It is essentially the bedrock of your standard of life and should you become unable to work because of sickness or injury could include meeting your financial obligations such as mortgage or loan repayments, bills or school fees.
BDA Plus' dental income protection is for dentists and takes into account the specific needs of the profession.
Your membership, your benefits
As a BDA member, you have the perfect solution to financial protection at your fingertips in the form of BDA Plus. Dealing exclusively with dental professionals, BDA Plus operates a team of Independent Financial Advisers through Lloyd & Whyte (Financial Services) Ltd, who are experts in all manner of financial services.
Our independent status means we can search the whole market when advising our clients, as opposed to tied agents who only select from one provider. Over 10 years working alongside the BDA has also provided us with an understanding of the unique needs of the dental profession.
Meeting financial obligations
The primary financial obligation for most professionals is meeting mortgage repayments. Taking any significant amount of time off work is likely to make this difficult. Upon arranging your mortgage, you may have bought Mortgage Payment Protection Insurance (MPPI) to cover payments in the event of redundancy or sickness. If so, it is essential that you understand exactly what this covers as most policies will have many exclusions. Such exclusions may include stress and back pain, which are common reasons for claims under income protection.
Also, MPPI benefits only cover your mortgage payments, meaning you may need additional protection to meet other financial commitments. It is also important to check the term of the policy, as MPPI will typically provide benefits for up to one or two years, whereas benefits from income protection will normally last throughout the duration of incapacity, usually stopping at your selected retirement age.
Although dental income protection will not cover redundancy, nor will MPPI if you are self-employed. Therefore, an income-protection policy is likely to provide better value for money with superior levels of cover than will MPPI for most dental professionals.
Considerations
Relevance is key to income protection. Depending on your needs, you may find either that a policy specifically designed for dental professionals is most suitable or, perhaps, a more-generic policy from a life company is better. At BDA Plus, we will advise you on policies that take into account your individual circumstances and lifestyle.
One such area for consideration is the deferment period of the policy, which is the length of time before benefits will be paid, typically between from day one up to two years. You will need to assess how long you could reasonably maintain your finances without an income, taking into account for how long you will receive a salary (if applicable), or any savings you may have for such an eventuality.
You will also need to consider the amount of money you will need. This is normally up to a maximum of 50% to 65% of your net relevant earnings (net profit). This can be received weekly or monthly and is not subject to income tax.
Own occupation
Wherever possible, our clients benefit from policies written on an "own-occupation" basis, which will provide benefits until you are able to resume work as a dental professional, or until retirement should this not be possible. In contrast, most income protection policies will be written under an "any occupation basis". This means that benefits will only be payable if, because of sickness or injury, you are unable to work at all, which could force you to take unskilled work for substantially less than you are currently earning.
Our advice
We advise all our clients regularly to review the financial protection they have in place to ensure it remains relevant. As your financial situation changes with time, so should your arrangements for protection. Otherwise you may have to rely on an inadequate protection policy, which will not support your current lifestyle should you find yourself unable to practice as a dentist.
To take full advantage of the services your BDA membership offers, speak to a BDA Plus Independent Financial Adviser today on 0845 136 1366, or visit lloydwhytedental.com for more information.
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