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Dr James:
What’s up everybody? Welcome back to the Denison Fest podcast, where I am joined, and it is my pleasure to host returning face Tony Hamlin. How are you, tony?
Tony:
Hey, james, i’m fantastic. Thank you on this gorgeous day in sunny Yorkshire, oh wunderbar, always sunny in sunny Yorkshire out here Of course it is.
Dr James:
Yes, welcome back, welcome back, tony. So we’re returning face and obviously we’ve covered everything and everything anything and everything Life insurance and income protection up into this point. What we wanted to do was just revisit the income protection side of things to give dentists a little bit more value on that area, because we kind of left a few stones unturned on that one, didn’t we? There’s a few loose ends to tie up, so that’ll be something interesting to do today and something I’ve been looking forward to.
Tony:
Yeah, can’t wait, really looking forward to it And thanks for having me back again. We’ve got a lot of interest from it. And, as you said, you know really to come in at a slightly different angle, because it’s one of the things that I’m most passionate about. Of all of the solutions that we provide for customers, income protection, i think, is really the number one Because, statistically, it’s what people are most likely to claim for And yet it’s so undervalued and undue. Well, not undervalued necessarily, but undersold. So, yeah, for me it’s the number one And I think people should have. And so you, as I say, i’ve been on here a few times now And, as you’ll know, my sort of strap line is that we provide a financial safety net And everything that we do is underpinned by that, and I think, as I say, income protection is one of the most important strands of that. And I was thinking that this, believe it or not, i think is similar to dentistry in a way, that is, that prevention is better than cure. I know there’s been lots of stuff in the press about children not getting access to dentists and things like that and on oral health, but I think, if you on the insurance side, well, how can prevention better be better than cure? But with a lot of the providers and income protection, you don’t have to be really poorly and off work to benefit from some of the added value services they have. So, for example, especially in dentistry, as you’ll know, is that mental health is a key issue with a lot of dentists. I think they’re more liable to it than a lot of other industries. But you can access counseling, including CBT therapies and things like that, so it’s. And physiotherapy can get remote physiotherapy, things like that. So, before you really off work, if you know you’re going down the wrong path, there’s help to keep you at work And that’s all part of the value that a lot of these providers offer for you. And there are some that will look at what healthy choices that you’re making there and depend on the client. Some really like to get involved in these things where you get an annual health check. You’ll look at your physical activity and sort of points, make prizes and things like that. So, dependent on the client, there’s lots of different options to do So it’s not just kicking in When you’re off sick. There are lots of other things that can get you to stay at work, which is clearly what everybody wants at the end of the day.
Dr James:
Oh, that’s a good point. Prevention is still better than cure. Yeah, all the different vantage point to life insurance is basically when it kicks in, when you start working. Yeah, yeah.
Tony:
Absolutely on that side of things. And then we’d be talking about lovely clients will be dentists, business owners on that side of things. Well, it depends on the type of structure of the business will depend on which type of income protection that is probably more is better for you. So for the sole traders out there and there’s a lot of those dentists isn’t there that are sole traders that have they don’t want, for whatever reason. I haven’t got to yet a limited company. I’ve spoken to a lot of dentists that have both. They have a sole trader business and a limited company. Sole trader may be the NHS side of things and a limited company may be the private. But regardless of that, the for the sole trader, they can’t access the executive income protection And I think it was the podcast before last we went into a lot of detail about that where you can put your own income protection through the business. It’s like putting on expenses And I think we did that in a lot of detail, but that’s certainly. But for sole traders that’s not possible because you need that employer employee relationship And if you’re a sole trader you don’t have that. So, sole trader dentist, what they’ll be looking at is having an income protection policy in their own name, so it protects your salary when you need it most. So, as I said before, you can never prepare yourself for an illness that puts you out of work, but you can put the right cover in place should you ever need it. So if you get sick or injured and need to take time off work, that’s where the income protection comes in. It pays out part of your monthly income And this is taxable income helping you protect your finances while you recover. Because you don’t pay tax on your monthly payments. It can replace most of your salary as well, and so this is having in their own name, so it’s setting up your own sick pay. Or, more recently, everybody will be aware during COVID about having a furlough scheme, where this is setting up your own furlough scheme, if you like. So it’s there should you need it. Now again, i’m repeating myself some previous podcasts, but things that we’ve talked about are that you know, if you’ve got a car in the driver of the garage, you have to ensure that. If you’ve got a house, you have, have you got a mortgage? rather, you have to ensure that it’s part of the mortgage. You’ve got to get that as part of the mortgage agreement, you could have insurance for your phone, for your dog. This is about ensuring you. Now, if you’ve got a machine in your room that’s printing out your salary every month, you’d be ensuring that, wouldn’t you? And that’s exactly what this is doing. So if you can’t work for any reason, so through sickness or accident or disability, then this will pay out. So it’s that peace of mind that we’re talking about, that financial safety net. If something happens And we all think it won’t happen to us, don’t we? But we’ll all know people.
Dr James:
I mean that happened to me. right, we need. But I’m not going to repeat that story because everybody on the podcast is bored of hearing. Okay, people are going to stop listening. But it did. I thought I was invincible. I thought nothing will ever happen to me. Yeah.
Tony:
Yeah, and also you know this could be something but also something more serious like cancer. We all know somebody’s been affected by cancer And if you can’t work for that, this is going to pay you out on a monthly basis. It’s going to take the pressure off. So clinically, i think it’s been proven that if you haven’t got the financial burden, it helps you get better more quickly. I think common sense states that, doesn’t it So, and so the income protection is when you can’t work for any reason, where people have heard about critical illness policies, where you have to have a specified illness. This isn’t that. This is if you can’t work for any reason, including mental health. So there’s that financial safety net for you. There, typically, you can get up to about 60% of your taxable income And that will pay out until you’re returned to work or you reach the end of the term of your type of policy.
Dr James:
And just to sorry to jump in, just to define taxable income, that’s the income that we’re taxed on in our personal name, Right? So dividends and income tax, right.
Tony:
Yeah, so it’s what would be on your tax calculation at the end of the year. So you do a self-assessment that HMOSI would then look at. So that includes salary. Most businesses, if they’re limited, will have a small salary. Take the rest and dividends Yeah, and all of that’s covered. Clearly, if you’re a sole trader, you won’t be having that. So that’s just that’s on your income. So anything that you’re paying tax on this pays out. Yes, Yes. On that element of it.
Dr James:
Not the funds in the limited company that are liable to corporation tax, not those Well, the thing is no so. No, no, it’s good. No, I was just confirming.
Tony:
Yeah, I think that for me the sort of the term income protection sort of does what it says on the tin This is your income, hi, this is your taxable income, yeah, but what it will do if we do put it through the business. So we’re moving on from the sole trader benefit. If you do have your own limited company, you can put it through the business and offset that against tax So you reduce your corporation tax on that one, if you remember. So that’s the executive income protection that we talked about in a lot of detail. I think probably we don’t need to go into that depth of that today. But sole traders have it in your personal name. Limited company directors a lot of dentists that I’m speaking to they have their own limited company and they’re the only director. But because the limited company is the structure, you’ve got that employee-employer relationship there, so you can offset it against tax, which is really key, and you can put more through that business. You can get up to 80% of that and include national insurance and pension contributions are all options available to you. But I say we’ve done that in a lot of detail that people can probably look at the previous podcast if they want more or, of course, give me a call. The other area to mention on the personal side before I move on is that there’s some I was just getting to the point where most clients will take it until their state retirement age or when they want to retire. I know a lot of dentists that I’m speaking to don’t want to wait until they’re 67 before they retire. They may have a goal of 55 or whatever it may be, so you can have the income protection that’s going to pay out until that point. But sometimes if budget is an issue maybe in the early days of a career, whatever it may be then people can take out a budget version of income protection where, once they’re claiming it will pay them out for either a year, typically two or five, but ideally you want to get them to it until their retirement age. That’s where you want to get to. There’s other things involved. Just very quickly, there’s a fracture cover with a lot of providers. So if you break your wrist or your arm, they’ll pay you a lump sum for that, in addition to being off work with it as well. And also if your child God forbid is poorly with a specified illness, it will also pay. I think it’s up to six times what your income would be what your payment would be, so you can spend time with your child. So there’s all these other added benefits. Whilst I’m on the subject of benefits, don’t forget that a lot of these policies which we’ve touched on before but will provide access to be able to speak to a British GP 24-7,. Wherever you are in the world, you can get a second opinion if something’s gone wrong. You want to go to the best consultant in that particular area that will check the diagnosis and the treatment. I’ve already mentioned about remote physiotherapy, the psychological services and things like that. So that’s all part of the package with most providers nowadays. So I think those on their own are worth a weight in gold. And then the bit that I haven’t got onto yet, which a lot of the people that are listening may not be aware of, is for those that own the business and have staff. you can put income protection in for your staff members, so it’s called group protection. So typically two or above you can have group protection in place. The really sexy thing about this quite a lot, if I’m a bit sad, i think those things are really clever is that you can decide who you want to be covered, so it doesn’t have to be everybody. You could have different levels of cover for the different members of staff So you could have a different level of cover for your associate dentist, yourselves, your practice manager, and you maybe have a different level of cover for receptionists, for example. So you decide where it’s at. But the bit that’s good about this is that the vast majority of it there isn’t any medical underwriting because it’s under a group policy. So there are some people out there that wouldn’t necessarily be able to get income protection in their own name because they may have I don’t know, they may have had cancer before and recovered, something like that. So with this you don’t have to declare it. There’s no medical underwriting up to a certain level. So anybody that joins let’s say you’ve got 10 members of staff And, as we all know, especially in the dental world, trying to get good staff. I’ve been speaking to dentists this week that struggled to get good dental nurses to stay attracted in the first place. It’s these types of benefits that we’ve talked about. You know we talked about life insurance, but you can give them income protection as well. So you don’t want paying staff and then them being off sick for ages where, if you’ve got this sort of, this type of policy in place. Not only does the business pay for it, it’s looking after your staff And because of that, it’s going to help them get back to work more quickly, which is really, really important, isn’t it? But it makes them feel valued so they’ll want to stay with you. They’ll be attracted with you. So for me it’s getting helping you attract the right staff, but, even more importantly, it’s helping you retain them, which I think is another way of looking at this side of things. And with all of these things, you can offset it against TAP and all of these, but you can still offset this against TACs as well Maybe one for another day, included on that. You know you’ve got your life insurance. You can put through the business your income protection, and there’s also private medical that I think would probably be talking about it another time. So you like said Bupa and WPA and that stuff. All of that is part of a benefits package you could put through to your staff, which I think is very valuable nowadays.
Dr James:
What are your thoughts on that? Have you heard?
Tony:
about that before.
Dr James:
I have not. This is all news to me. It’s interesting. It just shows me that, you know, when it comes to insurance, they’ve pretty much thought of everything really, haven’t they? You know they’ve got everything covered, which is great.
Tony:
Yeah, this is really really great And a lot of I don’t. Obviously it varies from practice to practice, but you could have a dental nurse that’s off sick And she may have a month or two of full sick pay, but there’s lots out there that will just go straight onto statutory sick pay And that at the moment is just under 110 pounds a week. So if you imagine you’re on a good salary and then suddenly your poorly and your income drops to 110 pounds a week or just under that, that can have a catastrophic effect to some families. They’re looking for that income. So to have something in place that’s going to kick in and pay them a big chunk of their salary if they’re off sick, that can be a make or break for some people in their families. So I think you know it’s those benefits that you’re doing there as well. So it’s the peace of mind, it’s the financial safety net for you and your staff as well, which I think is really important.
Dr James:
That’s awesome, okay, and I’m listening with intent over here. So if there is anything else that you can add on top of that as well, all ears, because this is new to me. It’s not stuff that I’ve come across before and I’m keen to learn more.
Tony:
Yeah well, i suppose the essence of it is, you know that it can give your employees financial support if they’re absent from work long-term, other due to illness or injuries, we said, and this money could take some of the added pressures off your employees so they can focus on getting well, So getting back to work more quickly than they otherwise would do. And bearing in mind on that also, especially with group income protection, it has the rehabilitation services, which is aimed to reduce lengthy absences by providing those interventions that I talked about, and also that you can get, with some providers, a manager that will proactively manage the employee health issues as well. So it’s a bit like having a team that you wouldn’t have otherwise access to to help look after your employees and get them back to work. But you know we’re providing financial support to the employees. You help employees get back to fitness and you then re-engaging the employees with your business as well. It’s all part of the service. So, as well as showing you care about your employees, it helps the business stand out from the crowd when it comes to recruiting and retaining staff. I think those are the key messages of the group policy. So sort of summarizing. All of that is dependent on what type of business you have. If you’re a sole trader, there’s one type of income protection for you. If you’re a limited company, there’s another option for you when you can add on other things such as the national insurance and pensions as well. And then if you’ve got staff that you want to stand out and take care of, you can also put the things like group life insurance, group income protection, put it all through the business, offset it against tax, reduce your corporation tax, look after your employees and look after your business at the same time. I think it’s a bit of a no-brainer for me when it comes to that And, as you said, there’s not that many people know about it. I know there’s lots of advisors out there that because of the authorizations in it which I don’t want to bore everybody with but you can be qualified because I’m a qualified financial advisor But there may be certain areas that are not authorized to give. But there are certain parts of the industry that aren’t authorized to give group advice. So you could go and see somebody and they’ve talked to you about having a life policy in your own name through the business. But if you’ve got 20 employees or 10 employees, you want to do it, for they wouldn’t be able to help Where I can do all of that sort of as a one-stop shop.
Dr James:
Wow, there’s an absolute flipping deluge of information there. I think the thing that stuns me is just how many different types of policies there are. One is almost like a policy that carries to like every single need, even sometimes needs that we don’t even know that we have because we’ve never really been conscious of it, necessarily before. If anybody wanted to find out anything more about those policies, tony, how? can they get in touch with you.
Tony:
They can contact me. I’m on my website, hammond Financialcouk. They can email me at Tony at Hammond Financialcouk Or give me a call 07 857 630570. I think the point here, james, is that you’ve seen how complicated it can be and it’s not just something that you can get off the shelf. You need good advice that’s bespoke to you in your circumstances, and that’s what I love doing and providing that financial safety net.
Dr James:
Top stuff. Tony, you’ve been really generous with your time today. Looking forward to have you back on the podcast sometime soon.
Tony:
I can’t wait. Thanks again for the opportunity. Cheers James, Thank you.