After my last Blog on Critical Illness Cover, I thought I would do a follow up explaining another type of insurance that I get asked about frequently – Permanent Health Insurance (PHI)
I found this quick guide on www.adviser-hub.co.uk
Regardless of whether you are single or have several financial dependents, if you are suddenly unable to work, your income will disappear completely – and this will have a direct impact on both you and those around you.
Permanent Health Insurance (PHI) is less well known than life assurance but is just as important. In the event that you have an accident or contract a serious illness and are unable to work, PHI is designed to replace the income you lose. This is typically, up to three quarters of your gross income (ie: approximately your net take-home pay), minus any state benefits for which your situtation might mean you become eligible.
This income is paid until retirement age, until the end of the policy term or until you are able to return to work, whichever comes first. Consequently, whilst you are rehabilitating or coming to terms with changes in your life, you can be reassured that your financial position will be unaffected and that the bills will continue to be paid.
This type of policy can be of particular benefit if you are selfemployed, ie: when your job does not come with any sick pay or group pension & protection scheme benefits (of which this form of cover can sometimes be a part).PHI has a reputation for being expensive, however, it comes with a choice of deferral periods and the longer that deferral, the lower the risk. Therefore, if cost is an issue, simply extend that deferral period beyond 1 month to perhaps 3, 6 or even 12 months, and the costs come down significantly. If you receive minimum sick pay from work or savings which can get you
through the short term, this cover can be very cost-effective.
Here at Reeves Independent we would gather a full fact find to fully understand your whole situation and research appropriately from this. This would then enable us to present to you the best options in respect to protecting the wellbeing of you & your family in the unfortunate event of ill health.
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