Permanent Health Insurance; do you need cover?

Have you ever considered what would happen if you couldn’t work either through illness or due to an accident? Sure Statutory Sick Pay will be paid to you but this is unlikely to provide adequate income protection in the event of serious illness.

With Permanent Health Insurance, you can get cover for a wide range of illnesses such as heart disease, cancer and mental illnesses and in the event of an incident you will be given a replacement income via the policy.

The benefits

Long-term illness is something we prefer not to think about but official figures show that every year more than 670,000 men aged between 40 and 64 are absent from work for more than six months because of it. Many suffer financial hardship as a result.

If you are an employee unable to work because of illness, you may be able to get Statutory Sick Pay (SSP) for up to 28 weeks. But the standard rate is only £88.45 a week.

The state offers only minimal help, with strict eligibility rules for incapacity benefit. After 28 weeks of illness claimants must undergo a test checking their ability to carry out a range of work-related activities such as walking, sitting and using stairs. Even if they qualify, benefits are not generous and they are taxable.

Permanent Health Insurance (PHI) may be the answer. It pays a regular income designed to protect your standard of living if you suffer long-term sickness or injury. Benefit usually starts after an initial waiting period of four, 13, 26 or 52 weeks and it is payable until you return to work, die or the policy term expires, whichever happens first.

It’s called permanent because the insurer may not cancel the policy no matter how often you claim for benefit, although policies usually expire when the policyholder reaches 60 or 65. Insurance companies will not normally write new policies for applicants within five years of these age limits.

No two PHI policies are alike because exclusions vary and cover differs widely, therefore if you are interested in this cover, we would highly recommend contacting our our Financial Services team or calling us on 01253 598952 as they will be able to find you a scheme to suit your job and your financial circumstances.

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