Permanent Health Insurance (PHI)

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Permanent Health Insurance (PHI) - obtain an online quote now (click)

PHI Description Do I need this cover Employer / State support PHI Quotation Request Form

Indicative premiums How to apply Considerations of cover requirements and costs

PHI provides long-term income protection. In fact the modern day phrase for these contracts is Income Protection (IP) IP replaces a proportion of a person’s income should they become unable to work due to illness or injury A monthly benefit is paid until the insured reaches the policy end date, they recover or die Payment of benefits begins after a qualifying time, referred to as the “deferred period”. This can range from 1 to 12 months Generally policies will pay 50-65 per cent of gross earnings, so there is still an incentive to return to work. Current UK tax rules allow the benefit from an individual IP to be paid tax-free. IP claims are not limited. Unlike ASU & MPPI policies, the insured may make any number of claims during the life of the policy IP can compliment ASU & MPPI by starting to pay out once the benefits from these shorter-term policies cease This can usually be done by utilising a 56 week deferred period which also has the advantage of lower IP premiums

Do I need this cover …..? Ask yourself these questions:

What does my income support, and how could I make ends meet without this income and for how long ?

Will my income fall if I can no longer work due to ill health ?

What could I continue to pay if my income fell dramatically and could I continue to pay the essential bills ?

How long will my employer continue to pay me if I become ill, and how much ?

How much will the state support me, and could I survive on that ?

Long term illness or injury is not the remote possibility you might imagine

- statistically, the chances of a working adult being off work for more than 6 months due to illness or injury is around 1 in 7*

- UK workers are 3 times more likely to be off work for more than 3 months due to illness or injury than die before age 65

- more than 2 million people of working age are off work and have been claiming State benefits for a period of 6 months or more* Of those:

over 1.7 million have been off work more than 2 years

more than 1.3 million have been off work for more than 3 years

136,000 have been claiming for more than 15 years

* (Source: Department of Work and Pension November 2002)

Employer / State support

An employer’s statutory obligation to provide Statutory Sick Pay (SSP) is for 26 weeks at a current £66.15 p w (April 2004)

Some employers provide full pay for up to 6 months, but few offer such benefit beyond this period.

Self-employed people have no such luxury

State incapacity benefit is designed to alleviate poverty not maintain lifestyles and the current short-term incapacity benefit is £66.15 per week (long term £74.15).

Not all people that are unable to work because of health are eligible for this State benefit as eligibility is determined by a stringent personal capability assessment.

Considerations of cover requirements and costs

The amount of cover required would be an individual decision based upon circumstances including commitments and existing cover.

Once this is established there are other considerations that will affect the premium cost. This briefly will be:

Applicant’s occupation – some are riskier than others

Age

Sex

Current state of health

Smoke or not

Benefits static or increasing – index linked options are available

Premiums guaranteed or increasing

Deferred period chosen – the longer this is, the cheaper the premium

Definition of incapacity chosen. Broadly these are:

i. Own occupation - the most common where the insured will qualify if they are unable to perform their normal occupation

ii. Any occupation as suited by training, education or experience – the insured will qualify if they are unable to perform their own or a similar occupation within reason

iii. Activities of daily living / personal capability assessments – often used for higher risk clients where they will qualify if they are unable to perform a set number of predefined tasks

iv. Any occupation – less common now, where qualification for benefit occurs if the insured is unable to perform any occupation at all

Indicative rates:

The table shows IP premiums from one provider for a male non smoking office worker with a 56 week deferred period. The benefit is index linked; the premium rates are guaranteed for 5 years and are not subject to Insurance Premium Tax (IPT)

Current age	Termination age	Monthly benefit £	Monthly premium £
30	55	1000	10.50
30	55	1500	14.25
30	55	2000	18.00
35	60	1000	14.30
35	60	1500	19.95
35	60	2000	25.50

How to apply …… ? Because of the wide range of parameters, quotations at present are only available on application to ourselves. This we hope will presently be rectified by the availability of an on line system. To request a quote, kindly complete the following questionnaire and submit to ourselves by clicking the submit button. We will then forward to you a specific quote for your consideration.

PHI Quotation Request Form

Surname		First name(s)
Title		Date of Birth
Address		Postcode
Smoker ?		Health status
Occupation		Employment status
Industry engaged in		Type of benefit required
Premium type required		Deferred period
Benefit payable to age		Monthly benefit required £
Incapacity definition		Telephone:
Email:		Notes / further information

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