Exposed to the elements
I have reviewed a number of dental employment contracts lately, from those employed in either the NHS or private sectors. The level of sick pay provided by these contracts varies considerably, and it is quite alarming how little some contracts offer sick dentists.
Whatever area of dentistry you practice in, do you know what your sick pay provision is, or when it kicks in and for how long payment will be made and at what rate? If you are unsure of any of these questions, it may be worth reviewing your contract.
Not everyone believes that walking under a ladder or breaking a mirror is a sign of bad luck, but the finger of fate can touch us all, often when we least expect it. Dentistry is a physically and mentally demanding profession and nobody’s good health is guaranteed. Many dentists today are self-employed and responsible for their own finances, while uncertainties over the new contract sharpen the need for income protection in the event of an accident or illness.
One of the leading providers of income protection insurance is The Dentists’ Provident Society. The Society has over 13,000 members and, on average, 1,600 of them suffer an accident or illness each year, and of these over 200 may never return to work so could need support until they reach retirement.
Income protection insurance provides the client with cover for the duration of the policy. The insurer cannot cancel the policy no matter how many claims are made, which means those who are unable to return to work could be paid a regular income until the age of retirement.
There are two types of insurers that provide income protection cover. The first is an insurance company, and the second is a friendly society. Friendly societies have no shareholders so use their profits to improve the benefits for their members.
The main provider of income protection insurance to both salaried and self-employed dentists is Dentists’ Provident, which provides cover under the Holloway principle.
A Holloway type policy provides the two most important protection measures all dentists need – sickness and accident insurance cover and a lump sum payable on retirement. Other insurance policies are risk only, which means that if you do not claim you lose your money.
The first Holloway type of friendly society was founded in 1880. Its role was to provide its members with income support when they were unable to work. Today many of the Holloway societies are associated with a particular profession, as is Dentists’ Provident, which enables them to structure their benefits around specific circumstances.
Many insurance companies base their risk assessments on lifestyle choices. For example, your sex, or whether or not you smoke, may increase your premium. Most Holloway societies charge the same premium for everyone in the same age group, regardless of gender or lifestyle. Members’ funds are exempt from income and capital gains taxes.
About half of the UK’s practising dentists are members of a Holloway society, a clear indication that this is the profession’s preference.
Employed dentists’ contracts of employment usually only provide sick pay for a limited period, either 26 weeks or a year, after which payment ceases. However, self-employed dentists do not have this automatic protection unless they have adequate insurance cover such as that provided to members of a Holloway friendly society, which will also continue to pay benefits until the dentist reaches retirement age.
If you are salaried, look at your dental contract today to clarify what you will be paid if you are unable to work through sickness or accident, and then review any insurance cover that you may have.
However, if you are self-employed you are more at risk, so it is even more important that you review your insurance cover. Even a few weeks’ absence from your practice due to ill health will contribute to a considerable loss of income. Taking care of your finances, as well as yourself, means peace of mind throughout your career.
Ian Passey is chief executive of the Dentists’ Provident Society, which can be contacted on 020 7222 2511 or [email protected] Alternatively, visit www.dps-ltd.co.uk.