Income Protection And Critical Illness

Permanent Health Insurance (PHI)

Permanent Health Insurance is the type of insurance designed to pay out if you are unfortunate enough to suffer an accident or illness that prevents you from working. It it designed to pay out a proportion of salary, for example, 60% of your salary tax free, either until you are again able to resume work or until retirement.

Do you need PHI?

Long term illness can bring us to a halt, and more often than not our income as well. PHI may be useful as it could help you to continue to settle your routine bills, such as electricity, mortgage, gas and food bills. Statistics suggest that most long-term illness' occur to people in their late 50s and coming up towards retirement, but it is important to remember that illness can happen to anyone at any age, and it is important to be covered for all occasions.

Insurance which is based on an assessment of the health of the applicant is unlikely to cover the applicant for previous or existing medical conditions please refer to policy documentation and seek advice in order to understand what the policy does and does not cover before making an application.

Accident, Sickness and Unemployment Cover (ASU)

ASU plans are typically used to cover mortgage repayments in the event that illness, accident or loss of employment that prevents the policyholder from earning a living. A monthly benefit which is often designed to meet the monthly mortgage repayments is paid for a limited amount of time, usually a maximum of two years. All benefits of an ASU plan are tax-free.

The policies do not offer protection from employment when the policyholder is sacked, or resigns voluntarily. There are usually the following restrictions:

• The proposer must have been actively and continuously employed for a set period of time before effecting the plan
• Any redundancy which the proposer had reason to believe was pending when the policy taken out will be excluded
• No benefit will be payable if redundancy occurs within a period of time of the cover starting
• ASU policies are annually renewable at the discretion of the insurer. This means that the insurer can increase premiums in the light of claims experience or even withdraw the cover offered. This is a major difference from PHI.
• Insurance which is based on an assessment of the health of the applicant is unlikely to cover the applicant for previous or existing medical conditions please refer to policy documentation and seek advice in order to understand what the policy does and does not cover before making an application.

Critical Illness

Critical illness cover means that the covered person will also be insured should they contract a Critical Illness. This is a form of life insurance policy which is designed to pay out a lump sum benefit on diagnosis of one of a number of serious medical conditions which will be specified in the policy. It may be available as a 'stand-alone' policy or may be an additional cover available with other insurance types such as life insurance designed to provide a death benefit.  Examples of the types of illnesses which may be covered can be found in the documents given by insurance companies.

Insurance which is based on an assessment of the health of the applicant is unlikely to cover the applicant for previous or existing medical conditions please refer to policy documentation and seek advice in order to understand what the policy does and does not cover before making an application.

Further Information

If you require more information on these subjects please don't hesitate to fill in the form below and one of our specialist IFA's will contact you.