This plan is short-term income protection (IP) insurance just for GPs, dentists, opticians, vets and others in the health sector such as practice staff.
Locum cover has long been offered by conventional IP insurers but often is expensive and complex, while not always meeting the specific needs that the medical profession has. Partly that is because IP is essentially designed to provide an income if the client’s income stops but, for some people, their income will actually continue but much of it may then have to be spent paying a locum to continue their medical or dental practice.
Practice Cover offers three levels of benefit to those looking for locum cover (overheads insurance is also available and locums can get cover on their own lives too). The three levels are:
* Level 1. This is the basic cover level and pays a weekly benefit if the client cannot to work due to illness or accident. On top of that, (as with the other two levels) the plan pays a lump sum (usually this is £10,000 but a higher amount may be applied for) on death; loss of limb(s); loss of sight; loss of speech; loss of hearing, and on permanent total disablement.
* Level 2. This next level of cover additionally pays out if unable to work due to jury service or suspension. Additional sums are payable for medical expenses; coma; funeral expenses, and compassionate leave.
* Level 3. The top level of cover adds additional sums for phased return to work; maternity/paternity/adoption; hospital inpatient; home modification; domestic, chauffeur, childcare; partner training; return home expenses; dental expenses; hospital transport; HIV needlestick injury, and delayed return from holiday.
A policy may be taken out by an individual or by a practice. Lives insured must usually be aged 18 to 75, although over 70s will require additional underwriting. Clients can choose a benefit of between £200 and £3,000 a week, with higher benefit levels available on request. Deferred periods offered are 2, 4, 8, 12 and 26 weeks. Unusually, cover may be either permanent (the plan is renewed every year and the insurer cannot stop offering cover or change its terms) or annually renewable (when cover could reduce in future if a claim is made).
Cover is worldwide (apart from certain hot spot territories such as Afghanistan and Somalia). A number of exclusions apply but these are fairly standard, although the list includes off piste skiing, bungee jumping, being under the influence of alcohol, drugs or solvents and venereal disease.
When a claim is made, the benefit is paid for a maximum of 12 months, although shorter maximum periods can be chosen. Although designed to provide locum cover, employing a locum in the event of a claim is not essential, provided the other claims criteria have been met. Cover is for 12 month periods, so premiums are likely to increase over time. Premiums are payable annually or by six or ten monthly instalments, subject to a credit charge and all premiums attract insurance premium tax.
What They Say
Director Lynda Cox said: “My aim is simple; I want Practice Cover to be the first choice insurance provider for medical and business professionals.”
What We Say
"We like a lot of what is included in this new product. Even the fact that it is targeting the often complex, confusing and costly locum cover market is of interest. There is a choice of product covers, so cover can be matched to needs and budgets, whether for the medical practitioner his or her self or their staff. The higher covers especially include a number of interesting benefits so, for example, a GP could cover the cost of employing a locum if called up for jury service. One very interesting feature is being able to choose permanent or short-term cover, although both versions seem to attract insurance premium tax (which traditional long term IP does not).
"The big downside though is that the maximum payout is just 12 months. That allows the underwriter to underwrite more generously than a long-term IP insurer would, because the risk of a big claim is relatively low. But that does restrict the value of the policy overall. An intermediary could get round that by also arranging conventional long-term IP with a 12 month deferred period but that adds to both complexity and cost.
"Our rating reflects the 12 month limitation but, if this plan is combined with other IP cover, the value of the plan could effectively be higher than the seven point five out of ten we have awarded it."