October 31, 2025 • 19 mins
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What if the fastest path to financial independence isn’t chasing a bigger pot, but transferring the right risks? We dive into life insurance for UK dentists with specialist adviser Anick Sharma to show how smart cover can protect your family, reduce tax, and keep your investments compounding without interruption.
We start by reframing insurance as the oxygen mask for your plan. Rather than a sunk cost, the right policy ring‑fences the downside so your portfolio stays invested through life’s shocks. That stability narrows assumptions, shrinks the required emergency buffer, and can pull your financial independence date forward. We break down how to size cover for real‑world needs—mortgage, school fees, household cash flow—so a bereavement doesn’t force asset sales or a scramble for income.
Structure is everything. We compare level, decreasing, and inflation‑linked terms, and explain when two single‑life policies beat a joint plan to avoid leaving the survivor uncovered. For limited company owners, we highlight the power of a Relevant Life Plan: employer‑paid, typically deductible, and without a P11D benefit in kind. We also tackle inheritance tax planning and why placing policies in trust can keep proceeds outside the estate and available quickly to your loved ones. Along the way, we pinpoint common pitfalls—only insuring the mortgage, ignoring NHS death‑in‑service, letting premiums drift, or failing to review after major life changes.
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Disclaimer: All content on this channel is for education purposes only and does not constitute an investment recommendation or individual financial advice. For that, you should speak to a regulated, independent professional. The value of investments and the income from them can go down as well as up, so you may get back less than you invest. The views expressed on this channel may no longer be current. The information provided is not a personal recommendation for any particular investment. Tax treatment depends on individual circumstances and all tax rules may change in the future. If you are unsure about the suitability of an investment, you should speak to a regulated, independent professional. Investment figures quoted refer to simulated past performance and that past performance is not a reliable indicator of future results/performance.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Dr James (00:00):
Insurances and also life insurance are not most taxi
products overcome to dentists,but here's why it's so important
to discuss them is because alot of us have it and we're
overpaying for it.
That's why I'm joined today byexpert financial advisor to
dentist, Mr.
Anick Sharma.
We're gonna be talking aboutlife insurance, how you can save
money if you're going to godown the path of obtaining a
(00:21):
policy, and also how if youalready have a policy, how you
can save money and also make itmore tax efficient as well,
because that stuff is easy whenyou know how looking forward to
this episode as ever.
I'm also happy to share thatthere is free verifiable CPD
associated with this podcastepisode.
Whenever you finish theepisode, all you have to do is
click the link in the podcastdescription.
(00:42):
It'll take you right to theDentists Who Invest website.
You'll be able to complete ashort questionnaire, and once
passed, you fill in yourreflections and we'll go ahead
and email over to you yourverifiable CPD certificate,
which is entirely free.
What that means is this podcastepisode will be able to
contribute towards yourverifiable CPD hours during this
learning cycle.
(01:04):
Anick, let's talk lifeinsurance because a lot of
dentists have it, but they maynot be covered correctly.
True or false, would you agree?
Anick (01:17):
100% true.
It's quite funny, James.
So anytime you go on the plane,you're always told put in your
oxygen mask first for helping onothers.
Now, when we think about thefuture and protection, life
insurance, protection isessentially that oxygen mask for
financial independence.
And without it, one unforeseencircumstance or not planning
(01:38):
could potentially lead you tobeing forced to sell your assets
or derail your plan and leaveyour family exposed.
Now, financial independence,and we'll get on to life
insurance properly in a moment.
It's not just about theplanning mechanisms, compound
interest, and index funds.
It's all about protecting theplan so that you can stay
(02:00):
invested long enough to succeedin life essentially and live the
life that you want.
So when we think about lifeinsurance, it's it can also be
viewed in a framework of itaccelerating financial
independence and not justaccelerating it.
So by having a protection piecein place, you can get there
(02:23):
faster because your downside isring fence, essentially.
So if your family's needs arepre-funded by insurance, you
don't necessarily need tooversay the larger what-if
figure or buffer, sorry.
Your target financialindependence number could be
leaner because catastrophicrisks are transferred
essentially to an insurer.
(02:44):
Now, we can get into the realmsof what that might be and how
it's combined.
But for example, someone mightonly need 900,000 when it's
combined with a suitable lifeprotection policy instead of
their target 1.2 million.
Um, the cover might substitutea otherwise bigger cash reserve,
(03:05):
essentially.
Um, people often uhunderestimate the life
protection elements.
And sometimes, in my experienceanyway, they'll just try and
cover the mortgage.
Now, having a life protectionpolicy for the family can help
that ease the burden thatnaturally happens in a in a
(03:28):
horrendous situation.
Um insurance is it's the returnamplifier for your investments,
essentially.
Because it it lets yourinvestments and pensions and
equity stay invested throughoutthe the life's um policy of of
what happens.
So one of the benefits withinsurance is that the peace of
(03:54):
mind it can bring can give youclarity and the calmness to
execute on the plan.
So as humans, we naturally haveoptimism bias.
We underweight bad outcomes anddelay action.
I've seen situations firsthandwhere dentists have said, yeah,
Anick, don't be silly.
We will we don't need toconsider insurance and the
(04:18):
earnings are coming in high andthe family's living a good
lifestyle, then all of a suddensomething horrendous happens.
We should be thinking about itin terms of making your shoulds
a must, and that a lump sum onlycover might still force you to
downsize if income vanishes orthe peace of mind from getting
(04:40):
the structure right.
Because if you protect yourselffirst, then everyone else
benefits.
So by having a life insurancepolicy in place, you you protect
the family from what mighthappen in the future.
Now, those that have listenedto the podcast before or
listened to me speaking on thepodcast will know about knowing
(05:01):
your number and defining enough.
Well, insurance can help narrowthe variables down so that your
numbers are a lot cleaner.
Naturally, when we we look atthe lifelong expenditure, there
are variables and different umdifferent outputs, the range of
outcomes that can happen.
(05:22):
But by having that safety netof insurance, it really helps to
narrow the focus down.
And that then can reduce thedependency of the assumptions
and reduces the the amount ofstress.
Now, there are various wayslife insurance can be drawn up
essentially.
(05:42):
So for example, you mightdecide to have a level term or
which means that the summershort, i.e., how much is paid
out is the same, or mightdecrease.
Now, quite often when policiesare initially set up, people
might not realize what they'reactually putting in place,
whether it's level ordecreasing, or maybe increasing
(06:02):
by inflation.
And if it's level, thatessentially means inflation is
going to be eating away too.
So by the time, or if it everdoes have to pay out, you're
actually left with a lot lessthan than was thought because it
doesn't buy you as much stuff.
Now, without getting under thebonnet of it or not paying
attention to what's going onwith the policy, it can be
(06:25):
really easy to overlook the thekey uh points of the policy.
Again, some people may have setup a life insurance policy
jointly, or it could be twosingle lives.
Again, both have their merits,but it's it's important to check
and make sure that the thepolicy is suitable for the
individual.
(06:45):
Because if it doesn't alignwith planning needs, then it can
be it can be an expensive andemotionally painful decision or
issue consequence down the line.
Now, when we get clear on ournumber, we can then start to
quantify okay, what amount ofcover would need to be in place
(07:07):
so that the family never needsto worry about money in the
future, for example.
Or if I were to die, um howmuch does my spouse need and the
children to to uh keep thelights on?
Because protection turnsbereavement chaos into a
predictable lump sum that keepsthe roof on and the kids in
(07:29):
school so that without it it itcan unravel everything.
Now, in terms of the outgoings,people say that they don't want
to pay the premium and fine.
But once we can start to tounderstand our number and what
we need, we can hard code theoutgoings, and by that I
(07:51):
essentially mean the a clearquantified monthly premium
simplifies cash flow,essentially.
Because when protection is setas a fixed expense, it's uh it's
a non-negotiable line thatprotects financial independence.
The the the clarity reducesdecision and it improves that
(08:12):
the savings consistency.
It whenever we uh apply andimplement an automatic rails
rules-based system, sorry, um,it it takes stress off our desk.
And essentially it's the thepremium is the price of keeping
your investment strategy or yourfinancial plan autopilot.
(08:34):
So getting used to thatoutgoings to to provide the
safety net for financialindependence is critical.
Because without it, we can wecan look at the most portfolio
optimized strategies and we canlook at various complicated
planning levers.
But without that safety net, itcan all come crumbling apart.
(08:57):
Now, particularly for Dentists.
Dr James (09:01):
You know what?
Just to jump in on one thingthat you were saying just there,
I mean, I guess something thatI'd never thought about before
was how it can actually speed upthe date at which you achieve
financial independence becauseyou all of a sudden don't need
as much of a protection buffer.
Or you sorry, when I sayprotection buffer, what I what I
mean is financial buffer by wayof by way of it reduces the
(09:25):
amount that's necessary for youto have in your bank account to
achieve financial independencebecause that extra buffer that
you would have over and abovethat which might be there for
your dependence is no longer uhwell, it is still necessary.
It's not that it's no longermess necessary, it's just been
delegated or mitigated to theinsurance.
UK dentists, if you are juststarting out on your investment
(09:46):
journey or you're alreadyinvesting and want to know if
your strategy is 100% foolproofand optimized to reduce fees and
maximize growth, then you mightlike to know.
I have teamed up withindependent financial planner
Luke Hurley to create thedentist to invest academy.
Dent to invest academy fullydocuments the process that a
financial planner would normallyperform for a client behind the
(10:08):
scenes and reveals it to you.
This means that you canimplement it into your own life,
therefore pulling yourfinancial freedom data forward
by years.
If you wish to set up andmanage your own investment
portfolio, then this is designedto give you all the tools and
knowledge you need to performthis properly.
This means that when viable andappropriate, you will have the
know-how and skill required tobuild and manage your own
(10:29):
investment portfolio, plusensure that it is 100%
optimized.
If this sounds like your thing,then keep an eye out on the
Dentists who invest mailing listwhere we'll be announcing the
details of the next intake verysoon.
Anick (10:44):
Yeah, 100%.
And like I mentioned before,instead of having a needing a
£1.2 million pot to achievefinancial independence, it might
actually be 900 because therest is covered by that life
policy.
Um, but of course, as witheverything, it's all
contextualized and underpinnedby having a robust financial
(11:06):
plan, kicking the tires on it,making sure we're happy with
with what that looks like beforemaking those decisions.
Dr James (11:12):
Nice.
Anyway, you were in filteringthere.
Anick (11:15):
Um yeah, so one thing for dentists, given their their
typical structures and limitedcompanies, quite often I see
individuals having personal lifecover, which is great as a
start of a tent.
But often it it's important todo a bit of an audit and
consider what policies have wegot in place personally that
(11:38):
could be put through thebusiness.
Because essentially that'skeeping it tax efficient, and
we're we're we're able to offsetvarious bits.
So for example, some peoplemight do a relevant life plan,
and that basically is a employerdeductible expense from from
the limited company, and there'sno P11D benefit, which is a
(12:02):
personal taxable benefit inkind, essentially, which is it's
really useful for dentists.
I'm not sure, James, if you'vecome across that before.
Dr James (12:10):
Uh well, I mean, only through every only through
talking to you guys, uh yourselfand Luke, because uh prior to
that I hadn't.
But yeah, that is effectivelytax-deductible life insurance,
correct?
Anick (12:23):
Yeah, that's right, exactly that.
Um so at the very least, I'dsay to all the listeners out
there, have a look at the thepolicies, make sure it stacks up
for what you need it to be,levels decreasing, etc., like I
mentioned before.
And then have a look at whetherpolicies can be put through the
(12:44):
limited company and whether youdon't need to pay for it
personally.
Um it can often be a very neatplanning planning exercise to go
through.
Dr James (12:54):
That that can be a massive saving right there, and
it's worth noting that it'soften a good idea to review
these policies whenever there'ssome sort of change in life
circumstance because there couldbe more effective ways of doing
it or you could save a ton ofmoney, correct?
Anick (13:09):
100%.
Um I I've mentioned thisanalogy before, but it's a bit
like saying I'm in London and Iwant to drive to Edinburgh, you
have Google Maps on your phone.
And that initial Google Mapsplot is getting everything set
up, getting the policy sorted.
Now, if a road close signhappens, a road diversion, it's
(13:29):
very easy to become lost as lifethrows its inevitable
curveball.
So it's exactly as you say,it's so important to check in
regularly, make sure that we'readapting to life's changes, and
that the policies of whatever wehave in place are still fit for
purpose, I'd say.
Dr James (13:47):
Well, it's worth mentioning that they can
actually become invalidsometimes, depending uh on a
change in your circumstance aswell.
And crucially, it's it's freeto have an audit and double
check things are all right.
Sometimes the answer is yeah,you're doing everything
correctly, there's nothing to besaved here.
Uh, whereas sometimes it'squite the opposite, is that it's
it's something along the linesof this is you're paying for
(14:09):
something that's potentially nolonger valid, or you're
overpaying for it potentiallytoo, uh, of course, as well.
Because uh I'm correct insaying uh I know uh the the
income protection buffins tellme, Annik, that whilst a lot of
policymakers their statedintention is that it's supposed
to grow uh your the the youryour premiums every year are
(14:33):
supposed to grow in line withinflation.
Sometimes they jack them up alittle bit more than that to
increase their profit margin.
Uh so therefore it can be thecase with time if you have a
policy that's been around forlike five to ten years that you
pen way over the odds for whatit actually is.
Is life insurance the same?
Anick (14:50):
Short answer is it it depends on how it how it's set
up.
So, with that example youmentioned about income
protection, you really need totalk to someone who understands
what's going on because youmight have two different
policies that you're looking atinitially, and policy B might be
a lower premium initially thanpolicy A.
(15:11):
But under the bonnet, policy Amay increase their premium by
inflation plus 1%, for example.
Whereas policy B might increaseit by inflation plus four or
five percent.
So, although policy B startsoff cheaper initially, over the
course of our lifetime you'regonna pay more.
(15:32):
So, when it comes to any otherpolicy, it's so important you
you deal with someone whounderstands the mechanics and
what's going on under the bonnetof it.
So over a course of a lifetime,you are keeping costs down as
much as you can.
Another point on that as wellis depending on the life policy
in place, sometimes it can bethere to mitigate inheritance
(15:56):
tax.
So on the death of a secondindividual, say who's married,
inheritance tax may be due.
Now, some people decide to takeout life insurance to cover
that so the the the kids orwhoever else don't have to fork
that out of the estate.
I've seen situations beforewhere people have tried to go
(16:16):
down this road on the on theirown and they haven't allocated
the proceeds to be paid into atrust.
And that's really importantfrom a planning consideration
because essentially that life'slife insurance amounts will be
paid into the estate, whichmeans inheritance tax is lending
(16:37):
on the sum assured.
So you've basically just addedto the problem.
So getting the structures rightahead of time is just as
important as making sure thepolicy terms and conditions are
set up.
And it can be so expensive fornot just you but the kids and
maybe knock on implicationsthereafter.
The the the the other thingwith that as well, so just to
(17:04):
summarize some of the mistakeswe see over only insuring the
mortgage, um which fine, thehouse might still be there, but
what about the cash flow?
And often having an initiallife insurance teamed up with
maybe an income replacement oranother life insurance policy to
(17:26):
provide a lump sum can beuseful.
The trust point I justmentioned before, big, big
mistake we see a lot of thetime.
So have a look at that as well.
Some people may take out ajoint decreasing term policy by
default, um, which means thesurvivor is left uninsured and
(17:48):
undercovered.
Um, so depending on thehousehold makeup, it's important
to align that with the policy.
And then employee benefits,what could be put through the
company and any other benefitsthat might be in existence?
So, for example, the the have alook at the NHS um benefits for
(18:10):
those that are members of thepension.
Important to factor that intoour financial independence plan.
The the other thing is we as abehavioral side, we need to move
it from should to must.
So it's morbid, I know, but askourselves if I were to die
(18:32):
tomorrow, uh is the currentsetup sufficient?
Is my income replaced or is itjust the mortgage?
Um, will the family be okay?
Is ask ourselves too, um, arethe policies set up in trust?
If not, look at fixing it.
Then for those that are runningtheir own company, ask
(18:53):
yourselves, are you paying forsomething that could be put into
your company moretax-efficiently?
Um, and then look at the theterm uh and all the nuts and
bolts under the policy details.
Do they align to your lifecircumstances?
I guess the the final point I'dmake on this is that financial
independence isn't fragile ifyou're hardened the downside.
(19:16):
If you protect the plan, theplan protects you, and that is
so important.
We deal with this day in andday out.
So for those that areinterested, feel free to reach
out to me.
Our website isbedarefinancial.com or find me
on LinkedIn, Anick Sharma.
Um more than happy to have achat and go from there.
Dr James (19:38):
Or of course the Facebook group as well.
Uh search Anick Sharma onthere, Dentistson Invest
Facebook group.
Shout out to that for anybodywho's not yet involved.
Anick, thank you so much foryour time today.
Looking forward to catch upagain soon.
Insurances and also life insurance are not most taxi
products overcome to dentists,but here's why it's so important
to discuss them is because alot of us have it and we're
overpaying for it.
That's why I'm joined today byexpert financial advisor to
dentist, Mr.
Anick Sharma.
We're gonna be talking aboutlife insurance, how you can save
money if you're going to godown the path of obtaining a
(00:21):
policy, and also how if youalready have a policy, how you
can save money and also make itmore tax efficient as well,
because that stuff is easy whenyou know how looking forward to
this episode as ever.
I'm also happy to share thatthere is free verifiable CPD
associated with this podcastepisode.
Whenever you finish theepisode, all you have to do is
click the link in the podcastdescription.
(00:42):
It'll take you right to theDentists Who Invest website.
You'll be able to complete ashort questionnaire, and once
passed, you fill in yourreflections and we'll go ahead
and email over to you yourverifiable CPD certificate,
which is entirely free.
What that means is this podcastepisode will be able to
contribute towards yourverifiable CPD hours during this
learning cycle.
(01:04):
Anick, let's talk lifeinsurance because a lot of
dentists have it, but they maynot be covered correctly.
True or false, would you agree?
Anick (01:17):
100% true.
It's quite funny, James.
So anytime you go on the plane,you're always told put in your
oxygen mask first for helping onothers.
Now, when we think about thefuture and protection, life
insurance, protection isessentially that oxygen mask for
financial independence.
And without it, one unforeseencircumstance or not planning
(01:38):
could potentially lead you tobeing forced to sell your assets
or derail your plan and leaveyour family exposed.
Now, financial independence,and we'll get on to life
insurance properly in a moment.
It's not just about theplanning mechanisms, compound
interest, and index funds.
It's all about protecting theplan so that you can stay
(02:00):
invested long enough to succeedin life essentially and live the
life that you want.
So when we think about lifeinsurance, it's it can also be
viewed in a framework of itaccelerating financial
independence and not justaccelerating it.
So by having a protection piecein place, you can get there
(02:23):
faster because your downside isring fence, essentially.
So if your family's needs arepre-funded by insurance, you
don't necessarily need tooversay the larger what-if
figure or buffer, sorry.
Your target financialindependence number could be
leaner because catastrophicrisks are transferred
essentially to an insurer.
(02:44):
Now, we can get into the realmsof what that might be and how
it's combined.
But for example, someone mightonly need 900,000 when it's
combined with a suitable lifeprotection policy instead of
their target 1.2 million.
Um, the cover might substitutea otherwise bigger cash reserve,
(03:05):
essentially.
Um, people often uhunderestimate the life
protection elements.
And sometimes, in my experienceanyway, they'll just try and
cover the mortgage.
Now, having a life protectionpolicy for the family can help
that ease the burden thatnaturally happens in a in a
(03:28):
horrendous situation.
Um insurance is it's the returnamplifier for your investments,
essentially.
Because it it lets yourinvestments and pensions and
equity stay invested throughoutthe the life's um policy of of
what happens.
So one of the benefits withinsurance is that the peace of
(03:54):
mind it can bring can give youclarity and the calmness to
execute on the plan.
So as humans, we naturally haveoptimism bias.
We underweight bad outcomes anddelay action.
I've seen situations firsthandwhere dentists have said, yeah,
Anick, don't be silly.
We will we don't need toconsider insurance and the
(04:18):
earnings are coming in high andthe family's living a good
lifestyle, then all of a suddensomething horrendous happens.
We should be thinking about itin terms of making your shoulds
a must, and that a lump sum onlycover might still force you to
downsize if income vanishes orthe peace of mind from getting
(04:40):
the structure right.
Because if you protect yourselffirst, then everyone else
benefits.
So by having a life insurancepolicy in place, you you protect
the family from what mighthappen in the future.
Now, those that have listenedto the podcast before or
listened to me speaking on thepodcast will know about knowing
(05:01):
your number and defining enough.
Well, insurance can help narrowthe variables down so that your
numbers are a lot cleaner.
Naturally, when we we look atthe lifelong expenditure, there
are variables and different umdifferent outputs, the range of
outcomes that can happen.
(05:22):
But by having that safety netof insurance, it really helps to
narrow the focus down.
And that then can reduce thedependency of the assumptions
and reduces the the amount ofstress.
Now, there are various wayslife insurance can be drawn up
essentially.
(05:42):
So for example, you mightdecide to have a level term or
which means that the summershort, i.e., how much is paid
out is the same, or mightdecrease.
Now, quite often when policiesare initially set up, people
might not realize what they'reactually putting in place,
whether it's level ordecreasing, or maybe increasing
(06:02):
by inflation.
And if it's level, thatessentially means inflation is
going to be eating away too.
So by the time, or if it everdoes have to pay out, you're
actually left with a lot lessthan than was thought because it
doesn't buy you as much stuff.
Now, without getting under thebonnet of it or not paying
attention to what's going onwith the policy, it can be
(06:25):
really easy to overlook the thekey uh points of the policy.
Again, some people may have setup a life insurance policy
jointly, or it could be twosingle lives.
Again, both have their merits,but it's it's important to check
and make sure that the thepolicy is suitable for the
individual.
(06:45):
Because if it doesn't alignwith planning needs, then it can
be it can be an expensive andemotionally painful decision or
issue consequence down the line.
Now, when we get clear on ournumber, we can then start to
quantify okay, what amount ofcover would need to be in place
(07:07):
so that the family never needsto worry about money in the
future, for example.
Or if I were to die, um howmuch does my spouse need and the
children to to uh keep thelights on?
Because protection turnsbereavement chaos into a
predictable lump sum that keepsthe roof on and the kids in
(07:29):
school so that without it it itcan unravel everything.
Now, in terms of the outgoings,people say that they don't want
to pay the premium and fine.
But once we can start to tounderstand our number and what
we need, we can hard code theoutgoings, and by that I
(07:51):
essentially mean the a clearquantified monthly premium
simplifies cash flow,essentially.
Because when protection is setas a fixed expense, it's uh it's
a non-negotiable line thatprotects financial independence.
The the the clarity reducesdecision and it improves that
(08:12):
the savings consistency.
It whenever we uh apply andimplement an automatic rails
rules-based system, sorry, um,it it takes stress off our desk.
And essentially it's the thepremium is the price of keeping
your investment strategy or yourfinancial plan autopilot.
(08:34):
So getting used to thatoutgoings to to provide the
safety net for financialindependence is critical.
Because without it, we can wecan look at the most portfolio
optimized strategies and we canlook at various complicated
planning levers.
But without that safety net, itcan all come crumbling apart.
(08:57):
Now, particularly for Dentists.
Dr James (09:01):
You know what?
Just to jump in on one thingthat you were saying just there,
I mean, I guess something thatI'd never thought about before
was how it can actually speed upthe date at which you achieve
financial independence becauseyou all of a sudden don't need
as much of a protection buffer.
Or you sorry, when I sayprotection buffer, what I what I
mean is financial buffer by wayof by way of it reduces the
(09:25):
amount that's necessary for youto have in your bank account to
achieve financial independencebecause that extra buffer that
you would have over and abovethat which might be there for
your dependence is no longer uhwell, it is still necessary.
It's not that it's no longermess necessary, it's just been
delegated or mitigated to theinsurance.
UK dentists, if you are juststarting out on your investment
(09:46):
journey or you're alreadyinvesting and want to know if
your strategy is 100% foolproofand optimized to reduce fees and
maximize growth, then you mightlike to know.
I have teamed up withindependent financial planner
Luke Hurley to create thedentist to invest academy.
Dent to invest academy fullydocuments the process that a
financial planner would normallyperform for a client behind the
(10:08):
scenes and reveals it to you.
This means that you canimplement it into your own life,
therefore pulling yourfinancial freedom data forward
by years.
If you wish to set up andmanage your own investment
portfolio, then this is designedto give you all the tools and
knowledge you need to performthis properly.
This means that when viable andappropriate, you will have the
know-how and skill required tobuild and manage your own
(10:29):
investment portfolio, plusensure that it is 100%
optimized.
If this sounds like your thing,then keep an eye out on the
Dentists who invest mailing listwhere we'll be announcing the
details of the next intake verysoon.
Anick (10:44):
Yeah, 100%.
And like I mentioned before,instead of having a needing a
£1.2 million pot to achievefinancial independence, it might
actually be 900 because therest is covered by that life
policy.
Um, but of course, as witheverything, it's all
contextualized and underpinnedby having a robust financial
(11:06):
plan, kicking the tires on it,making sure we're happy with
with what that looks like beforemaking those decisions.
Dr James (11:12):
Nice.
Anyway, you were in filteringthere.
Anick (11:15):
Um yeah, so one thing for dentists, given their their
typical structures and limitedcompanies, quite often I see
individuals having personal lifecover, which is great as a
start of a tent.
But often it it's important todo a bit of an audit and
consider what policies have wegot in place personally that
(11:38):
could be put through thebusiness.
Because essentially that'skeeping it tax efficient, and
we're we're we're able to offsetvarious bits.
So for example, some peoplemight do a relevant life plan,
and that basically is a employerdeductible expense from from
the limited company, and there'sno P11D benefit, which is a
(12:02):
personal taxable benefit inkind, essentially, which is it's
really useful for dentists.
I'm not sure, James, if you'vecome across that before.
Dr James (12:10):
Uh well, I mean, only through every only through
talking to you guys, uh yourselfand Luke, because uh prior to
that I hadn't.
But yeah, that is effectivelytax-deductible life insurance,
correct?
Anick (12:23):
Yeah, that's right, exactly that.
Um so at the very least, I'dsay to all the listeners out
there, have a look at the thepolicies, make sure it stacks up
for what you need it to be,levels decreasing, etc., like I
mentioned before.
And then have a look at whetherpolicies can be put through the
(12:44):
limited company and whether youdon't need to pay for it
personally.
Um it can often be a very neatplanning planning exercise to go
through.
Dr James (12:54):
That that can be a massive saving right there, and
it's worth noting that it'soften a good idea to review
these policies whenever there'ssome sort of change in life
circumstance because there couldbe more effective ways of doing
it or you could save a ton ofmoney, correct?
Anick (13:09):
100%.
Um I I've mentioned thisanalogy before, but it's a bit
like saying I'm in London and Iwant to drive to Edinburgh, you
have Google Maps on your phone.
And that initial Google Mapsplot is getting everything set
up, getting the policy sorted.
Now, if a road close signhappens, a road diversion, it's
(13:29):
very easy to become lost as lifethrows its inevitable
curveball.
So it's exactly as you say,it's so important to check in
regularly, make sure that we'readapting to life's changes, and
that the policies of whatever wehave in place are still fit for
purpose, I'd say.
Dr James (13:47):
Well, it's worth mentioning that they can
actually become invalidsometimes, depending uh on a
change in your circumstance aswell.
And crucially, it's it's freeto have an audit and double
check things are all right.
Sometimes the answer is yeah,you're doing everything
correctly, there's nothing to besaved here.
Uh, whereas sometimes it'squite the opposite, is that it's
it's something along the linesof this is you're paying for
(14:09):
something that's potentially nolonger valid, or you're
overpaying for it potentiallytoo, uh, of course, as well.
Because uh I'm correct insaying uh I know uh the the
income protection buffins tellme, Annik, that whilst a lot of
policymakers their statedintention is that it's supposed
to grow uh your the the youryour premiums every year are
(14:33):
supposed to grow in line withinflation.
Sometimes they jack them up alittle bit more than that to
increase their profit margin.
Uh so therefore it can be thecase with time if you have a
policy that's been around forlike five to ten years that you
pen way over the odds for whatit actually is.
Is life insurance the same?
Anick (14:50):
Short answer is it it depends on how it how it's set
up.
So, with that example youmentioned about income
protection, you really need totalk to someone who understands
what's going on because youmight have two different
policies that you're looking atinitially, and policy B might be
a lower premium initially thanpolicy A.
(15:11):
But under the bonnet, policy Amay increase their premium by
inflation plus 1%, for example.
Whereas policy B might increaseit by inflation plus four or
five percent.
So, although policy B startsoff cheaper initially, over the
course of our lifetime you'regonna pay more.
(15:32):
So, when it comes to any otherpolicy, it's so important you
you deal with someone whounderstands the mechanics and
what's going on under the bonnetof it.
So over a course of a lifetime,you are keeping costs down as
much as you can.
Another point on that as wellis depending on the life policy
in place, sometimes it can bethere to mitigate inheritance
(15:56):
tax.
So on the death of a secondindividual, say who's married,
inheritance tax may be due.
Now, some people decide to takeout life insurance to cover
that so the the the kids orwhoever else don't have to fork
that out of the estate.
I've seen situations beforewhere people have tried to go
(16:16):
down this road on the on theirown and they haven't allocated
the proceeds to be paid into atrust.
And that's really importantfrom a planning consideration
because essentially that life'slife insurance amounts will be
paid into the estate, whichmeans inheritance tax is lending
(16:37):
on the sum assured.
So you've basically just addedto the problem.
So getting the structures rightahead of time is just as
important as making sure thepolicy terms and conditions are
set up.
And it can be so expensive fornot just you but the kids and
maybe knock on implicationsthereafter.
The the the the other thingwith that as well, so just to
(17:04):
summarize some of the mistakeswe see over only insuring the
mortgage, um which fine, thehouse might still be there, but
what about the cash flow?
And often having an initiallife insurance teamed up with
maybe an income replacement oranother life insurance policy to
(17:26):
provide a lump sum can beuseful.
The trust point I justmentioned before, big, big
mistake we see a lot of thetime.
So have a look at that as well.
Some people may take out ajoint decreasing term policy by
default, um, which means thesurvivor is left uninsured and
(17:48):
undercovered.
Um, so depending on thehousehold makeup, it's important
to align that with the policy.
And then employee benefits,what could be put through the
company and any other benefitsthat might be in existence?
So, for example, the the have alook at the NHS um benefits for
(18:10):
those that are members of thepension.
Important to factor that intoour financial independence plan.
The the other thing is we as abehavioral side, we need to move
it from should to must.
So it's morbid, I know, but askourselves if I were to die
(18:32):
tomorrow, uh is the currentsetup sufficient?
Is my income replaced or is itjust the mortgage?
Um, will the family be okay?
Is ask ourselves too, um, arethe policies set up in trust?
If not, look at fixing it.
Then for those that are runningtheir own company, ask
(18:53):
yourselves, are you paying forsomething that could be put into
your company moretax-efficiently?
Um, and then look at the theterm uh and all the nuts and
bolts under the policy details.
Do they align to your lifecircumstances?
I guess the the final point I'dmake on this is that financial
independence isn't fragile ifyou're hardened the downside.
(19:16):
If you protect the plan, theplan protects you, and that is
so important.
We deal with this day in andday out.
So for those that areinterested, feel free to reach
out to me.
Our website isbedarefinancial.com or find me
on LinkedIn, Anick Sharma.
Um more than happy to have achat and go from there.
Dr James (19:38):
Or of course the Facebook group as well.
Uh search Anick Sharma onthere, Dentistson Invest
Facebook group.
Shout out to that for anybodywho's not yet involved.
Anick, thank you so much foryour time today.
Looking forward to catch upagain soon.
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