How would you manage if your income suddenly stopped?
Doctors get sick too, not just patients! Relationship breakdown, bereavements and accidents are all events we cannot predict. Unfortunately, some doctors will find themselves subject to professional intervention at some point in their career, which may compromise income.
Although most GP partners and employed GPs receive time-limited contractual sick pay, incapacity is particularly difficult if you’re a locum/sessional GP. Without sick or holiday pay, but with tax liabilities and childcare commitments, the financial situation can be precarious.
The first protection to build and maintain an accessible ‘rainy day’ emergency fund.
Choice and personal commitments/dependents will determine the appropriate amount, but consider funds to sustain you for six months, not forgetting tax liability.
Income Protection Insurance is designed to replace part of your income if you can’t work due to illness, injury or disability. Payments can start after sick pay ends, or after other insurance cover ceases. Check your Practice Agreement – you may be liable for Locum payments before your Insurance becomes active. Payments from the Health Authority will not cover all your expenses. Please also check what cover you are purchasing, some policies exclude certain conditions. There may also be limitations on claiming. It is better to know before rather than when you need to claim.
Doctors whose religion or ethics mean standard financial products are not appropriate should take specialist advice.
You may also qualify for certain state benefits if your income drops for any reason.
This may seem a luxury in these days of State indemnity but there is much that the State does not cover, particularly if you fall foul of the regulatory bodies.
Where do I find out more?
How would your dependents manage if you died suddenly? Consider life insurance – some mortgage lenders insist on it. Take independent advice on what’s best for you and your family.
BMA and LMC subscriptions can seem a luxury, but the advice services in the event of adversity, especially employment issues, can be invaluable (and the cost can be a tax-deductible expense).
It is crucial to understand your Practice Agreement and its implications and Practice Accounts (GP Partners), or your Employment Contract (employed doctors) before signing! (The BMA will offer scrutiny on all of these to Members, as will specialist medical lawyers and accountants ... for a fee.)
For further information see our Ten Top Tips for Financial Wellbeing.