Are you secure enough to self-insure?
Sunday, 22 June 2025
Training for and building a successful career as a medical professional takes a significant investment, in both time and money. Part of the reward is being able to practise in a vocation that helps people in a meaningful way. But additionally, the lifestyle you can now afford through your established earning capacity is something you’ve worked hard to achieve.
The reality for most doctors is that this lifestyle depends on being able to continue working. Unless you’re already financially secure enough to maintain your lifestyle without this income, you need backup.
Your potential earnings over your working life are usually going to be greater than the assets you hold in property or superannuation. These earnings should therefore be seen as a major asset. You wouldn’t consider not insuring your house, but what about protecting your salary? If you’re unable to work, it could quickly impact your lifestyle.
Covering your monthly bills
Income protection insurance provides you with regular income to replace your salary in the case of serious illness or injury.
There are many different options and providers of income protection cover, and there can be significant differences between what is covered under different policies, and how they pay out.
Reassess as your situation changes
Your living expenses are likely to change significantly over time, making it essential to review your cover regularly to be sure it would support your current commitments.
Also, income protection won’t replace your total salary, so you may want to consider other cover that can provide additional security against the worst happening. Other types of personal insurance pay out lump sum amounts for certain events such as critical illness, total and permanent disability and death. These funds can be used for any major expenses you may need to consider after one of these events, for example, making your home accessible in the case of disability. As well as contributing to your living costs.
Also, you may be able to claim a tax deduction for your premiums. This is something to confirm with your accountant.
If you need help navigating what types of cover are appropriate for you, Avant Life’s financial advisers specialise in personal risk and understand the particular needs of someone in a medical professional career.
Would the cover pay out if you were unable to work in your current occupation, or only if you were unable to work in any occupation?
As someone who’s invested years in training and building experience, being unable to continue working in your chosen specialty due to illness or injury would be particularly devastating. Your eligibility to receive benefits may allow you the time you need to focus on getting back to practising medicine. But with some policies, you could be ineligible to claim if you are deemed able to work in a different occupation, even if the pay is considerably lower.
How long are you able to manage before you need payments to commence? Your ability to access savings, or sick leave entitlements from your employer can all be considerations.
Over what period would the benefit pay out? Current income protection cover can pay for a maximum of 2 years up to age 65.
While you’re organising to protect yourself financially, it’s a good time to check your personal legal affairs are in order. Having an up-to-date will, power of attorney and advance care directive will help your family if something were to happen to you that resulted in a loss of capacity. Our Avant Law estate planning experts can help with this.
Other resources
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'Avant Life Insurance' is a registered business name of Doctors Financial Services Pty Ltd ABN 56 610 510 328 AFS Licence Number 487758. Refer to avant.org.au/life for important information. Legal services are provided by Avant Law Pty Limited (Avant Law). Liability limited by a scheme approved under Professional Standards Legislation. Legal practitioners employed by Avant Law are members of the scheme.