How to Choose the Right Insurance as a Doctor in Australia?

Your ability to practise is your most valuable financial asset. Here is what to understand before you choose how to protect it.

Doctors invest years in training, and for most, their income depends on being physically and mentally able to work. Yet insurance is often arranged quickly, through a default super policy or a single conversation, without much attention to the details that decide whether a claim is paid.

This guide covers the questions worth asking, the definitions that matter and the common trade-offs, so you can approach any insurance decision informed.

Step 1: Understand the types of cover

Different policies protect against different risks. Most doctors consider some combination of the following:

• Income protection pays a monthly benefit if illness or injury stops you working. For many doctors, it is the foundation of a personal insurance plan.

• Total and permanent disability (TPD) pays a lump sum if you are unlikely to ever return to your occupation.

• Life insurance pays a lump sum on death. It can matter most where others depend on your income or where you carry significant debt.

• Trauma (critical illness) insurance pays a lump sum if you are diagnosed with a listed medical condition.

• Business expenses insurance may suit practice owners or contractors with ongoing fixed costs, such as rent and staff wages.

Medical indemnity insurance is separate. It covers professional liability, not your income or health, and it does not replace any of the covers above.

Step 2: Read the definitions carefully

Two policies with similar premiums can behave very differently at claim time. The definitions decide this.

Own occupation vs any occupation. An "own occupation" definition considers whether you can perform the specific duties of your speciality. An "any occupation" definition considers whether you could work in any job suited to your education and experience. For a surgeon, anaesthetist or other proceduralist, a hand injury or vision problem could end a specialised career while leaving other work possible. The difference between these definitions can be significant.

Rules that have changed. Regulation in recent years has changed what is available. For example, since 2020, new policies held inside super generally can't include own-occupation TPD definitions, and income protection products have moved away from agreed-value benefits. Product features vary between insurers and change over time, so confirm current terms in the Product Disclosure Statement.

Exclusions and loadings. Check for exclusions relating to prior conditions, mental health or specific activities, and ask whether they can be reviewed later.

Step 3: Choose the structure that fits your situation

Several design choices affect both cost and protection:

• Waiting period: the time between becoming unable to work and the benefit starting. Longer waiting periods generally lower premiums, so consider them alongside your sick leave, savings and any employer cover.

• Benefit period: how long payments can continue. A benefit period to age 65 or 67 provides much longer protection than 2 or 5 years.

• Premium type: age-stepped premiums typically start lower and increase with age, while variable premiums start higher but are more stable over time.

• Additional features: indexation, future insurability options (allowing cover increases at life events without new medical assessments), premium waivers and partial disability benefits can all be valuable.

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Step 4: Consider whether to hold cover inside or outside super

• Inside super: premiums are paid from your super balance, which can ease cash flow, but this reduces your retirement savings and policy terms may be more limited.

• Outside super: you may have access to broader definitions and more flexibility. Income protection premiums are generally tax deductible, but you pay from your own cash flow.

Many doctors use a combination. The right balance depends on your income, tax position, existing super and personal circumstances.

Step 5: Look beyond price

The cheapest policy isn't always the best value. When comparing options, consider:

• The insurer's claims record and financial strength.

• Whether the policy is guaranteed renewable, meaning the insurer generally can't cancel it or change its terms because your health changes.

• The Target Market Determination (TMD), which sets out the customers a product was designed for. It is worth checking that the product was built for someone in your position.

  
  

Step 6: Review your cover over time

Your needs will change as you move from trainee to consultant, buy a home, start a family or purchase a practice. Reviewing your cover at major life stages helps make sure it still fits. Many insurers offer more favourable terms to early-career doctors, so it can be worth considering cover while you are in good health.

Key takeaways

• Income protection is often the foundation of a doctor's plan, but other covers may also be relevant.

• Definitions, particularly own occupation vs any occupation, can matter more than price.

• Policy structure, ownership and features all affect cost and protection.

• Your needs change over time, so cover should be reviewed regularly.

  
  

We Educate. You Decide.

Understanding your options is the first step. To see where you stand, take the Hippo Wealth Health Check.

This article contains general information only and does not take into account your objectives, financial situation or needs. It is not personal advice. Before acting on any information, consider whether it is appropriate for you and read the relevant Product Disclosure Statement and Target Market Determination. Insurance rules and product features change, so check current terms.