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Building and protecting your wealth

Financial Protection is Vital even if you are “well-off”

Do you know what the impact to your financial situation would be if you were unable to work due to injury, disability, or long-term illness? Shockingly, one million people in the UK have faced this very situation and many found that it was difficult to cope with the sudden reduction in income.


This does not constitute advice and advice should be sought in all instances before acting on it.



Even if you feel comfortable with your current financial circumstances, going through a period without your normal salary can become a huge burden.


Income Protection Insurance

One of the most important aspects of financial planning for dental and medical professionals is to safeguard your income.

One way to do this is to take out Income Protection (IP) insurance. IP insurance offers individuals a cushion if they lose their income for a variety of reasons, as set out in their policy.

Based on your particular needs and situation, you have to decide between two options for income protection – a short-term or a long-term policy.

When you consult with a financial adviser, they will help you decide the right level of protection for your situation.

“Most doctors and dentists find that income protection insurance is surprisingly affordable and gives them the peace of mind they are looking for.” Darren Scott Guinness – IFA


Short-term policies

Also known as Accident, Sickness, and Unemployment (ASU) policies, payouts from these products are limited so claimants usually stop receiving money after one or two years.

The types of policies available are:

  • Payment Protection Insurance (PPI) – These policies will help you from defaulting on a particular debt so coverage is finite.
  • Mortgage Payment Protection Insurance (MPPI)– These policies are specifically for covering the cost of mortgage payments for a predetermined amount of time.

You may be able to find a short-term policy that doesn’t need to be applied to a definite debt amount so be on the lookout for a policy that will be able to bridge the gap between losing your income and finding a new source.


Long-term policies

If someone needs coverage for longer than one or two years, then a long-term policy is the best option. If an individual can’t work because of illness or disability, these products are meant to serve as a substitute for regular income.

Payments will last until the individual is able to return to work or the policy term expires. You must remember that long-term protection policies will only pay out for illness or injury and not if an individual is made redundant or becomes unemployed. There are two types of policies available:

  • Own occupation –These policies are more focused because they stipulate that in order for the policy holder to qualify as “totally disabled,” they must be unable to perform specific functions of their own job. They keywords here are “own occupation” because the individual only needs to be unable to perform “material and substantial duties” of their own occupation, they don’t need to be completely incapacitated to be considered disabled.
  • Any occupation/working tasks – These policies are broader because they interpret “disability” as the inability of the policy holder to gainfully work any job whatsoever that they are reasonably qualified for based on education, work experience, and otheraspects related to their particular situation, such as salary. The keyword here is “gainfully” and is defined as securing a role where the individual earns at least 60% of previous earnings.

When searching for the right policy for your needs, you may be able to find a product that begins as an “own occupation” policy but changes to an “any occupation” policy after a predetermined amount of time.

If you suddenly become ill or injured, recovery should be your priority. The last thing you need to worry about is how you’ll pay the bills while you’re off work.

Income Protection insurance will go a long way to help ease your mind during this difficult situation since it’s a cost-efficient and beneficial safety net, even if your current financial position is favourable. If you have questions or concerns about the different types of policies available to you, contact us today.


Want to build & protect your wealth?
Investments | Financial Planning | Retirement | Save Tax | Protection |

Dental & Medical Financial Services have been helping doctors and dentists to build and protect their wealth, whilst saving tax for over 25 years.
Call Darren to discuss your options.

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