Underinsurance – your five-step treatment plan

Broken Glasses

Phillip Hines

Partner, Private Clients NSW

As a medical specialist, YOU are your biggest asset so it’s important to ensure you are adequately protected. Phillip Hines of Perpetual shares five key considerations to help you safeguard against the unexpected.

  1. You may need to claim sooner than you think

    Did you know that the average age of income protection (IP) claims in 2015 was only 39 – and that, on average, the IP policy was in place for just 3 ½ years before a claim was made?*


    So were we. But surely trauma claims were different?

    Sorry, same story – the average age of trauma claimants was only 43, with an average policy in place for just under 6 years.*

    These statistics demonstrate the urgency of having the appropriate cover in place earlier than you may think necessary.

    *Source BT Life – Breakdown of 2015 income protection and trauma claims


  2. Your insurance isn’t a ‘set and forget’ policy

    While most medical specialists have some personal insurance, we often find it hasn’t been reviewed since they started working.

    Given the life changes of a medical specialist – a significantly higher income, higher debt, a family, running your own practice – there’s a great deal riding on your ability to keep working.

    That’s why it’s vital that you’re covered by an appropriate level of personal insurance, such as income protection, trauma, total and permanent disability, and life cover.

  3. You should be in control of your policies

    Insurance policies are usually owned either personally, or through super, in which case they are owned by the Trustee that manages that super account.

    Depending on your circumstances, it may be beneficial to have your insurance policies owned and managed within your super, however it does mean you forfeit some control. Should you need to make a claim, this lack of ownership could prolong the process as well as affecting the ultimate outcome of the claim.

    Additionally there are some specific tax implications for Total and Permanent Disability (TPD) insurance owned via super that you should consider before choosing your policy ownership.


  4. You can’t afford to neglect the Ts & Cs

    Having enough insurance cover is important. Having the right insurance is vital, as not all insurance policies are created equal.

    Just like product information documents, it’s the fine print within these policies that really matters.

    For example, if your TPD insurance covers ‘any’ occupation, rather than your ‘own’ highly-specialised occupation, then you and your family could be left significantly short at claim time.

    It may seem insignificant but in the context of being unable to return to your ‘own’ highly-specialised occupation due to illness or injury, a TPD policy including an indefinite word such as ‘unlikely’ may significantly increase the probability of you receiving the right compensation.

  5. Your practice needs protection too
  6. We often find medical specialists don’t have any business expenses cover in place. If they do it’s usually nowhere near enough to keep their practice running, should they be unable to work due to illness or injury.

    That’s why it’s crucial you have appropriate business expenses cover to ensure you have a practice to return to when you have recovered.


Your treatment plan

If anyone knows the havoc that an accident, injury or illness can cause, it’s you. To protect your financial health, you can’t afford to neglect your personal insurance.

As medico-specialist financial advisers, we understand the unique risks faced by medical specialists each day. To protect you, your family and your practice, remember to:

  • Review your current situation and make sure that your level of insurance covers your needs
  • Understand the pros and cons of how your policies can be structured to help you determine what is appropriate for you
  • Be clear on all policy definitions, as these may influence the success of your claim
  • If you run your own practice, make sure you have the right business expenses cover in place so you have a practice to return to


Perpetual Private advice and services are provided by Perpetual Trustee Company Limited (PTCo), ABN 42 000 001 007, AFSL 236643. This article has been prepared by PTCo and may contain information contributed by third parties. It contains general information only and is not intended to provide advice or take into account personal objectives, financial situation or needs. The information is believed to be accurate at the time of compilation and is provided by PTCo in good faith. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. 

The Private Practice Magazine

Practice, financial and lifestyle 
management insights relating 
to medical professionals

head-settings Created with Sketch.

Speak to a medico-specialist insurance expert

A medico-specialist insurance expert can manage the entire process for you, as well as regularly reviewing your insurance to ensure you’re always full covered, as your career and financial situation changes. For an introduction to Perpetual Private and referral to a Perpetual Specialist Medical Senior Adviser, please contact us.

Contact us for an introduction 

Call us on 02 9229 9731 or leave your details, including the name of person you would like an introduction to and we will be in touch.

By signing up, you confirm you are happy to be contacted about The Private Practice Services and offers. View our privacy policy.