When you speak to most doctors, they are usually insured against the things that would cause them inconvenience and completely uninsured against the things that could ruin them.
The car is covered. So is the house. They usually have phone insurance and get travel insurance for their annual holiday. Pet insurance is also popular. However, when it comes to their single biggest asset (i.e., their ability to earn, walk into the department and function), they often have no protection at all.
When I was working as a financial advisor, a lot of people I worked with could not understand how doctors who often see life-threatening or life-changing conditions, and people’s lives turn around on a pinhead, could not be insured for the thing that could cause them financially the most damage.
It isn’t a lack of knowledge. It’s just that nobody ever teaches doctors this. So an average registrar arrives in their mid-30s with a mortgage, often a family, a six-figure trajectory, and an unwritten financial plan that quietly assumes nothing will ever go wrong.
However, thinking about this, some clear risks can commonly end a doctor’s income that they assume will go on forever. Here are the most common ones and what it actually costs to reduce them. I’m not here to sell you anything, but often the cost of reducing these risks is far cheaper than most people assume, and the expensive bit is waiting until later in your career.
Here are the five biggest risks.
Risk 1: The sick pay cliff edge
Many people assume that sick pay is quite generous; however, it’s worth reading the terms. Entitlement to sick pay is dependent on your length of service in your first year. This is 1 month at full pay and 2 months at half pay, with this rising to 6 months’ full pay and 6 months’ half pay once you’ve passed 5 years of service.
Sick pay of 6 months might sound like a real safety net. However, two things are worth noting.
Firstly, it runs on a 12-month rolling window rather than a fresh annual allowance. Any sick leave in the previous 12 months comes off what remains. So if you had 6 weeks off in March as a serious illness began, those 6 weeks are already spent.
The second important point is that it ends once the full-pay and half-pay period ends; you drop to statutory sick pay. For 2026/27, this is £123 a week. At the same time, your mortgage, child care, car finance, and student loan continue exactly as before.
So, how do you fix this?
When looking at income protection, it is often cheaper if there is a gap between when you leave work and when you actually start to claim income protection. So if you have 6 months on full pay, pushing your income protection out so it doesn’t pay for the first 26 weeks drops the premiums you need to pay quite sharply.
Therefore, the key is to understand what your NHS sick leave entitlement is based on your service, and how much income protection you need based on that. This is what we call the deferred period match, so you are protecting the gap rather than the whole thing from day one.
Risk 2: The one-asset portfolio
When investing, you would never advise a friend to hold their entire net worth in a single stock or share. However, when I speak to doctors, it’s common to see their income sit in that one position. It’s not property, stocks, or shares. The one asset that most doctors rely on is their body and their brains. I’d use the single source of income as their whole wealth-building tool. Although we see it regularly, we often think it won’t happen to us; the results are often unglamorous: a back injury, a hand tremor. Long COVID, burnout and depression, however, can stop your brain and body from doing the clinical work. That is precisely the asset you are relying on to build wealth. Another key point is that when doctors get an income protection policy, they often haven’t looked closely at the details.
Here are the three definitions that insurers use when defining incapacity:
- Own Occupation – which pays out if you can’t do your job as a doctor
- Suited occupation – pays out only if you cannot do work suited to your training and experience
- Any occupation- pays out only if you cannot do any work at all.
A surgeon with a shaking hand can still answer a telephone, so under an any occupation policy, that means no payout. Under own occupation, the policy does exactly what it’s supposed to do.
Therefore, the cheapest cover on these policies is the least likely to pay for a doctor who can’t do their job because of a specific problem. It’s worth checking.
How do we reduce this risk?
If you don’t have income protection, it’s worth looking into, but it’s also worth reading the fine print to make sure it says “own occupation.” It does cost a bit more, but that’s the point: if the policy doesn’t pass the own-occupation test, it’s not usually something built for doctors.
Risk 3: The regulatory pause
This is a risk to a doctor’s income that doesn’t have any insurance product associated with it. This is exactly why it is worth your attention.
A GMC referral, an interim order or a local restriction can stop parts of your income immediately. Usually, NHS employment means you will get full pay during the investigation, so many doctors feel financially insulated. However, if there are any limits on your licence to practise, this may affect things like locum shifts, private work, and medico-legal work, and can go on for months, and perhaps over a year.
Most doctors assume this will never happen to them, but looking at the GMC figures, most doctors will face at least one GMC referral during their career, and the chances of having a GMC referral in any one year are 2.2%
Unfortunately, no protection policy can help with this because it isn’t ill health. The only real ways to reduce this risk are:
- Having full Defence Organisation membership, which is current and up to date
- A genuine cash buffer in the form of an emergency fund held somewhere else apart from your current account
- Income that does not depend on your licence to practise at all
This last point: doctors often resist it and later wish they hadn’t. Even a modest, small, non-clinical income can help with teaching, writing a small product that they developed, or consultancy. I call this the non-medical income floor. It’s a part of your finances that a regulator cannot stop.
Risk 4: The single-income household
Medicine as a career, and the amount of time it requires of you, can often be brutal. That’s why many medical households rely on one income, with either a smaller income or no income to support the person doing the difficult shifts or excess hours. This is certainly true of my household, where my wife works 2.5 days a week but manages almost everything else in the background. Without her, I wouldn’t be able to do what I do. It makes the rotors survivable. The problem is that households depend on one larger income and fixed costs, then scale up to match that income. The higher earner is therefore structurally dependent on continuing to work.
If the worst were to happen, death in service through the NHS pension scheme gives a lump sum of roughly twice pensionable pay. At first glance, this is quite a substantial amount.
However, set against a £400,000 mortgage, a growing family, and ongoing costs before any youngest child is independent, this is often nowhere near enough to cover what is needed.
How do we reduce this risk?
There are lots of different options here. One option is level term life cover running to the year your youngest is realistically independent, and sized against the mortgage. For a non-smoking 35-year-old, £500,000 of cover over 25 years is often less than you think.
Other options include things like a family income benefit, which provides a tax-free lump sum every month until a set time in the future. One thing worth noting is that it is quite cheap to start, but it increases with inflation; at some point, it may not be worth continuing.
Another key tip in this area is something almost everybody skips: write this policy in trust. When buying this type of policy, the person selling it should be able to help you with this, but it means that the policy written in trust pays directly to your family rather than into your estate. This avoids probate delay and generally sits outside inheritance tax. It doesn’t cost anything else, and skipping this could cost your family months of waiting at the worst imaginable moment.
Risk 5: The underwriting clock
Insurance prices you pay are based on who you are today. Every year that you wait, two things happen: premiums rise with age, and your medical history grows. Despite working in the medical profession, most doctors are unusually bad at this and often wait, which ultimately costs them more in the long term.
Knowing the base rates for these insurance policies makes deferring feel rational; however, while you wait, your medical record quietly builds: the investigation you needed with the GP, the physio referral, the 6 weeks off after surgery. None of this makes you uninsurable, yet added together it can mean your monthly premiums go up when you finally take out a policy.
There is a second trap here: disclosure. A doctor who minimises a mental health episode on application has a potential risk of the policy not paying out at exactly the moment it’s needed. Full disclosure early, at a good price, beats partial disclosure and a better price later on. So, how do we reduce this risk? Bottom line, do it sooner rather than later. It’s a concept I call the underwriting clock. The premium you are quoted today is the cheapest one you’ll ever be offered.
What this actually adds up to
Putting the realistic numbers side by side, a mid-30s doctor can often protect their entire financial structure for somewhere between £150 and £250 a month, depending on the policy. At the end of the day, this is often less than most people spend on coffee and subscriptions. It can turn a fragile financial position into a resilient one. Whilst working as a financial advisor, I saw time and time again that doctors looked at the upside of investing and wanted to build. Still, it was rare for someone to have a really good plan for protection against the worst things that could happen.
The other advisors I worked with couldn’t understand how medics who see the worst things happen every day don’t do this. Since completely sorting out my own protection needs, I now think it’s as important as building assets and different streams of income.
The peace of mind that it gives you means you can make different decisions; you can drop a session. You can refuse the weekend because the protection and insurance provide a floor beneath which you can make decisions.
Remember, the blogs here at Building Out are not about selling you any product, and we are not affiliated with any product or organisation. We’re about improving education and helping doctors understand the often-complex financial landscape.
Your next five steps
- Find your actual Sick leave entitlement. Search this week for which sick pay tier you sit on, and how much of it you’ve already used in the last twelve months.
- Review any cover you already hold. Check the incapacity definition. If it doesn’t say own occupation, treat it as decoration, not protection.
- Get quotes at a 26-week deferred period. Match the deferment to your sick pay and watch the premium fall.
- Size your life cover properly. Mortgage, plus the household shortfall, plus the years until your youngest is independent — then write the policy in trust.
- Start the non-medical income floor. It doesn’t need to be big. It needs to exist and be independent of your licence.
None of this is exciting. In fact, it can be boring. However, it is the difference between a career you choose and one you cannot afford to leave.
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This post is for educational purposes only and does not constitute financial advice. Always do your own research and, if needed, ask for advice from a qualified financial adviser regulated by the FCA.
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