Protections and insurances – which ones do I need?
To fulfil your dream of purchasing your very own dental practice, you have to be prepared to jump through a few hoops, especially when securing the necessary finance. Banks may be willing to lend, but unless you can provide the relevant comfort to prove that the loan will be repaid no matter what, your application will be denied. That’s where protection and insurance comes in.
Any bank providing a loan will issue a facility letter detailing that life cover will be required to cover the cost of the loan in the event of your death. They need to be able to take charge over it should anything happen to you to ensure that the debt is completely paid off.
That being said, it is your responsibility to ensure that your insurance covers all eventualities. As such, you must ensure that you go through your policy with a fine toothcomb before signing on the dotted line, because if you don’t, you could end up out of pocket later on down the line. Using a specialist company such as DE Finance can help with this, as we will be able to help you understand what level of insurance you need to protect your practice, yourself and your family.
The most common reasons for an unsuccessful claim are inadequate level of monetary cover, wrong type of insurance or clauses in the policy. For instance, a lot of health policies are issued on a moratorium basis, which means that if you have a pre-existing condition any claims in respect of a linked complaint are excluded from the policy at the outset.
The other cover that you will likely require is locum insurance, as you will need to be able to pay for a replacement to take over your responsibilities in the event that you are taken ill or absent for a long period of time. Again, utilising expert advice is the key to getting adequate cover, as there are a number of cheaper packages out there that can be a false economy. You will need to make sure that your insurance not only offers monetary protection for locum role or replacement cover, but sickness pay too. Bear in mind that these policies will be tax deductible, the ‘actual’ cost of an enhanced policy may be less than you think.
There are a number of additional benefits that can be bolted on if you want to prepare for every eventuality, including cover for psychiatric conditions, sport induced injuries, HIV and needle stick related problems, rehabilitation and family emergencies. If you’re not sure which ones you need or would be financially beneficial to you, DE Finance can work with you to establish your needs and calculate the exact level that would suit your practice.
As for your own individual needs, critical illness cover is essential to protecting your overall finances and assets outside the practice – including your family home. Although, you should be aware of what is covered because a number of illnesses are now considered less critical than they were ten years ago. The way this type of policy works is that if you develop an illness that prevents you from working, as long as it is covered by your policy, you could receive a tax-free lump sum or an ongoing monthly allowance until you recover. Your practice may be important, but you still need to look after number one!
At DE Finance, we can arrange your Life Cover and Insurances as a complimentary review in line with the requirements of your facility letter to ensure that you and your practice are covered. For clarity, we don’t charge you directly for this service and are paid a commission by the insurers for any business that we introduce, so there are no additional charges incurred. As dental specialists we understand the potential risks that you might be exposed to during your time as a practice principal, which is why we work closely with you to ensure that no matter what happens, your cover will serve you when you need it the most.