Income protection and critical illness cover for locum optometrists

The scenario 

Tasha, AOP member

“I have been working as a locum for around 12 months, and last month had to take unplanned time off due to sickness. I am now considering taking out income protection. What do I need to be aware of when selecting the right cover, and what are the non-negotiables or must-haves for an income protection policy?”

The advice

Harmy Bains, independent financial adviser at Lloyd & Whyte

As a locum optometrist you won’t usually be in receipt of workplace benefits, which can include group income protection and group private medical insurance as part of an employee benefits package.

Should you need to take time off for ill health, sickness, or injury as a self-employed person, there are two options you can explore: income protection and critical illness cover. Both products complement each other should you become ill. Critical illness cover is a lump sum benefit and income protection is an income benefit, so the ideal solution would be for you to take out both at the same time.

Let’s start with income protection.

Income protection through Lloyd & Whyte

When you’re forced to stop, your bills don’t. Despite this, only 6% of people in the UK have income protection, compared to 69% of people who insure their possessions.

At Lloyd & Whyte, you can buy income protection online or through one of our independent financial advisers (IFAs).

If you’re clear about the type of policy you’d like, buying online can be straightforward and easy. You’ll need to know how much cover you need and how long you need it for. Compare income protection quotes online.

If you think you might need to discuss your options through with someone who can search the market for you and explain terms and conditions and clauses in your policy, talking to a Lloyd & Whyte IFA could be more suitable.

You can also purchase income protection through a limited company, which is more tax efficient if you are a locum or own a practice. Consulting with a Lloyd & Whyte IFA is useful to understand this in more detail.

What you need to know: your options

How much does income protection pay?

If you do need to make a claim, most of the policies that we provide typically pay 50–65% of your salary. You will need to make sure the income protection policy you buy covers the cost of your financial commitments.

How long does income protection pay out for?

You can choose a policy that pays you until you can return to work or until you reach retirement age.

Health conditions

Some insurers exclude certain conditions and take your lifestyle and health into consideration. It pays to be honest and accurate when informing the insurer on any health conditions you may have, or you could face problems should you need to make a claim. Double check which illnesses and injuries are covered, so that your policy matches what you expect and need.

Deferred period versus day one cover

You can buy a policy that starts paying you after an agreed time, and typically the longer the timeframe between injury or illness and payment, the cheaper the policy. Or you can choose day one cover, where you can make a claim as soon as you’re unable to work.

Often taken out with life insurance, critical illness cover is designed to provide you with a pay-out should you suffer from a debilitating illness or injury. When you buy critical illness cover through Lloyd & Whyte, it comes with complimentary life insurance for the exact amount of the critical illness policy you take out.

It’s important to know that critical illness cover will only pay out if the condition or illness you suffer from is listed as a condition on the policy that you take out.

Total and permanent disability

Lloyd & Whyte can provide critical illness cover that features an extension to the product known as ‘total and permanent disability.’ This extension covers you should you suffer a permanent disability such as losing a limb or eye, which could impact on your ability to work as an optometrist.

Own occupation

Lloyd & Whyte can provide policies which would pay out to you if you cannot work as an optometrist, regardless of whether you can work in another job. If you are sick or injured and you can still work in another occupation, a policy based on ‘any’ or ‘suited’ occupation will not pay out because they deem that you’re fit to work. ‘Own occupation’ will pay out if you cannot work in your chosen profession as an optometrist.

You can request a quote for critical illness cover here.

If you’d like to go through your options for income protection or critical illness cover with a Lloyd & Whyte IFA, book your appointment here.

For further information or to book an appointment over the phone please call: 01823 250750.

Lloyd & Whyte (Financial Services) Ltd are authorised and regulated by the Financial Conduct Authority. Registered in England No. 02092560. Registered Office: Affinity House, Bindon Road, Taunton, Somerset, TA2 6AA. It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding of taxation and can be subject to change in future. Calls may be recorded for use in quality management, training and customer support.