Getting more value out of your insurance choices
The most common policies GPs take out and how to get the best value from them.
The important thing to remember about insurance is that it’s not always the cheapest premium that provides the best deal. It’s better to make sure you have the right cover in place to protect you based on your circumstances, rather than simply browse online or go through a broker to find the most cost effective deal.
This article looks at some of the most common policies GPs take out and how to get the best value from them.
Why it’s important: Can provide you with a regular income if you are unable to work due to sickness or disability. Typically, it will pay you a regular tax-free benefit of up to 50% of your pre-incapacity income.
How to get best value: Premiums are normally cheaper if you wait longer before benefits are paid, so you may choose to defer payments until any other protection, such as your NHS sick pay, has expired. Also ensure it has an ‘own occupation’ definition, meaning it will still pay out even if you are capable of carrying out other types of work.
Why it’s important: Provides a lump sum for your beneficiaries when you die.
How to get best value: As the money can be used to pay off debts on your death, such as an outstanding mortgage, you need to review the cover to ensure it keeps up with your changing circumstances, which may include a growing family or larger homes.
Why it’s important: Ensures you are able to cover the cost of a temporary GP, if required. Many practice agreements make paying for locum cover the personal responsibility of the partner.
How to get best value: If you cannot afford to pay for locum cover out of your regular income – which could be more than £500 a day in many areas of the country – insurance should be a priority. A group policy paid for by the partners in the practice may be more prudent than each taking out an individual policy.
Key person insurance
Why it’s important: Ensures you are able to cover the cost if you lose a key member of staff such as a GP, nurses, support staff or the practice manager. Typically it will pay out a lump sum to the business in the event that either the person dies or is diagnosed with a critical illness. This could be used to cover the cost of recruitment or loss of profits while the practice reorganises.
How to get best value: Ensure any policy has an ‘own occupation’ definition included, so it still pays out even if the member of staff is still able to work in a role that is not their own.
Why it’s important: If a partner dies or suffers a serious illness, one of the key priorities for those who remain will be to ensure the control and stability of the practice are maintained and, where necessary, there is a smooth transition to a new ownership structure.
Partnership protection provides a lump sum that allows that share to be retained by the remaining partners, allowing the current ownership to continue.
How to get best value: There should be a partnership agreement outlining what would happen in the event of a partner leaving, either through death, illness or retirement, and the cost to the other partners for buying them out. This can be a complicated area and the lump sum is likely to be needed at short notice, so taking professional advice is strongly recommended.
Why it’s important: Employers’ liability insurance is a legal requirement if the practice has one or more employees. This cover insures for claims arising from your liability for employee illness, injury or death. But as well as the people within the surgery, it’s important to protect the premises and equipment as well.
How to get best value: You should already have insurance in place to protect the practice and its contents against events such as flooding, fire, and burglary. But as the surgery is likely to contain expensive equipment and medications worth thousands of pounds, it’s important to ensure everything is covered and you are not under-insured.
Phil Mileham is the national sales manager at Wesleyan Medical Sickness.