Doctors who’ve recently achieved residency status in a hospital are immediately concerned of protecting their stream of income. It is right to think this way as no one can tell what the future holds. Preparing for the worst of things always beats no preparation at all.
A common way of income protection is acquiring an insurance policy. This is an instrument that transfers the risk of a loss (ie. unemployment, incapacity, and death) of a person to another in exchange of a payment. Here are three basic types of insurance:
- Long-term income protection. Policies that fall in this class pays out until you reach a certain age or upon demise. This can go beyond your years of employment and are underwritten from the time you applied for it.
- Short-term income protection. Like long-term, this is also underwritten from the moment of purchase. It’s notable distinction is that this only pays out on a period that can last from at least one to five years.
- Accident, sickness, and unemployment coverage. As the name suggests, this is a type of insurance that’s specifically designed to pay out in cases of accidents, hospitalised sickness, and unemployment. It’s cheaper than short-term and long-term policies but payment amount and processing time are uncertain.
Insurance companies provide more types of policies that target each specific needs of customers. If you’d like to go over them, a professional financial planner is best suited to help you on this.