Income protection insurance

whiteandredflowers12

I’ve just qualified as a dentist and am wondering whether income protection insurance would be a good idea in case I damage my hands/eyes etc and can’t work. I don’t have any dependents but do have a mortgage. 

Any advice as to whether income protection insurance would be the right thing to cover this or if there is anything else that might be better? 

tacpot12

Income Protection Insurance is the correct form of insurance, and is a good thing to have if you have a mortgage. State benefits won't pay your mortgage, so if you lose the ability to work for any reason, you might also lose you home without it.

You can keep the cost of such insurance down by defering the point at which it pays out, say for 12 months. You can expect to have six months sick pay from your employer. but after that you really need to have an emergency fund of at least six months income to get you to the point where the income protection insurnace pays out. 

You may find that the insurance is quite expensive if you want to insure a lot of your income, and you want the cover to start if you can't continue in dentisty. The insurance will be much cheaper if it only covers you if you can't do ANY work, rather than just covering if you can't do denistry.

You'll have to evaluate the cost of the insurance if it is to cover you mortgage and other livings costs, e.g. council tax, food, fuel, etc.

It's a form of insurance many more people should have. 

elsien

Although as many dentists are self-employed, you might want to take that into account with your planning, if self-employment is likely to apply to you. 

DullGreyGuy

whiteandredflowers12 said:

I’ve just qualified as a dentist and am wondering whether income protection insurance would be a good idea in case I damage my hands/eyes etc and can’t work. I don’t have any dependents but do have a mortgage. 

Any advice as to whether income protection insurance would be the right thing to cover this or if there is anything else that might be better? 

Income protection is a marketing term that covers two different products, ASU and PHI (we like TLAs). The full fat version of PHI pays out until your retirement age (you specify when buying) whereas ASU pays out for 12 or 24 months. 

Clearly one is more appropriate for those wanting long term cover. The former is a 12 month policy renewable whereas the later is a single policy lasting until your retirement so whilst more expensive now it gives you certainty whereas ASU will go up in price as you age and there is never a guarantee renewal will be offered.