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Permanent Health Insurance

Permanent Health Insurance or PHI is also called Income Protection and will cover your income in case of you being unable to work through sickness or injury.

PHI can start after 4, 13, 26, 52 or 104 weeks and will continue until you are between 50 and 65. It is important to ensure that it does not start while your employer will still pay you. It is very sensible to get out your employment contract to see how long you will be paid for. You need to ensure that this is in keeping with what your employer offers because if you insure yourself for something that your employer already offers you will be paying for something that you will never receive.

PHI should always be written on an escalating basis. This means that your protection will increase along with your income and inflation.

There are three types of contract.

Guaranteed
The premiums are guaranteed to remain the same throughout the course of the plan.

Reviewable
At each review, a check is made that contributions are sufficient to maintain the benefits until the end of the selected term of the plan in the light of the investment and claims experience of the company at that time.

Reviewable with the premium increasing faster than inflation
In this plan the cover is inflation proofed while the premium increases each year in line with your increased age.

There are four different definitions for which cover can be claimed:

1.The own occupation definition of disability means the life assured must be unable to perform the material and substantial duties of the occupation in which the life assured was engaged immediately prior to the onset of the sickness or accident and is not following any other gainful occupation. This is the most generous definition.

2.During the first year of sickness or injury, 'unable to work' is interpreted as being unable to carry out the occupation, which was being undertaken at the time the incapacity commenced. After 12 months, this changes to being unable to carry out any occupation.

3.You will receive the full benefits if you are totally unable to follow your normal or any other reasonably suitable occupation and are not following any other occupation.

4.Afflicted with illness and totally unable to follow any occupation.

You need to be aware that if you stop paying the premiums your cover will cease. You should also be aware if you change jobs the premium may have to be increased to reflect any increased risk associated with any new job you may have.

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