Income protection explained

Posted on April 03, 2019 by Daniel James

If you’re a newly qualified veterinary professional, you’ve probably heard of Income protection. This blog post will explain what income protection is, and how it’s useful in the event of illness or injury.

What is income protection?

Income protection is insurance that provides you with a regular income if you become ill or injured and unable to work. In the event of a claim, your policy will pay you up to 65% of your usual income. You will receive this as a regular payment until you're well enough to work again. 

Won't sick pay suffice?

Many young vets assume their employer will pay them if they are off work sick, and in some cases this is true, but you need to know how much and how long you will be paid. If your sick pay comes to an end and you’re not ready to return to work, income protection will carry on funding your food, rent and bills until you recover or retire.

In the majority of cases, sick pay is paid for a very limited amount of time and with a limited amount of money. By understanding the benefits you will receive from your employer, you can arrange income protection to fit around you and your situation.

Income protection lets you recover without financial worry, but more importantly, it stops you from counting a minor improvement in your health as a sign to go back to work.

I'm young and healthy, why would I need income protection?

As a young veterinary professional, you need to consider the impact of stress, animal-related injuries or postural strain during procedures. No one wants to anticipate the possibility of injury or illness – but if that possibility becomes reality and you are unable to work, it’s reassuring to know that income protection can keep you covered.  

Can you give me an example?

A 25-year-old veterinary professional hears that her colleague - of a similar age - has been signed off work due to burnout. This makes her realise that even as a young vet, work intensity or long hours could have a negative impact on her health or her ability to work non-stop.

After hearing of her colleague’s news, and realising that she wouldn’t cope financially if she could no longer earn, this vet decides to arrange income protection.

This particular vet knows that her sick pay would only last for a short period of time, so she wants her cover to start after 3 months of being off work. She hopes that, if she happens to fall ill or get injured, she could receive £1,000 a month until she returns to work or turns 65 - her chosen retirement age. This money would cover her bills, food and medication until she is well enough to work again.

So long as her policy insures her specifically as a vet, and her benefit is protected from inflation, this vet might be paying around £25 a month for her income protection. 

How can Lloyd & Whyte help?

At Lloyd & Whyte, our policies are made to protect veterinary professionals like you. As a trusted partner of BVA, we have spent over 15 years getting to know your profession – this makes it easier for us to understand the sort of cover you need.

To find out more about the Income Protection we provide, please visit our website. Alternatively, give us a call on 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. The scenario provided is for indicative purposes only and would also be subject to medical underwriting and family history. 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. It does not provide individual tailored investment advice and is for guidance only. We cannot assume legal liability for any errors or omissions it might contain.

Daniel James

Written by Daniel James

DipPFS

Daniel James is Director of Client Services at Lloyd & Whyte, who are the appointed independent financial advisers of BVA. Daniel has been working in the financial services industry for 20 years and advising BVA members on their finances for the past 15 years.