Pharmacy proprietors are in the unique position that should they suffer a disability and be unable to work, their income and profit will continue provided the remaining employed pharmacists or an additional pharmacist can be sourced to continue running the business.
Employing the additional pharmacist or increased wages can cost up to $100,000 per annum in additional expenses, which essentially comes off your bottom line or is the structured salary you may otherwise pay yourself. However, despite this loss of income you will most likely still generate ongoing profit (albeit reduced).
It is this ongoing profit or income stream which creates a challenge when obtaining appropriate income protection insurance as our research has found that insurers deal with this issue in one of the following ways:
- Most policies will have an ongoing income offset clause built into the policy wording.
- At the point of application the underwriter assessing the case will apply this offset clause as a special condition on the policy.
- Depending on the level of ongoing income, income protection cover may be declined outright.
