Permanent Health Insurance (PHI) is less well known than life insurance but potentially has many more applications. Sickness or an accident that leads to a lengthy absence from work can affect any of us at any time. It's more common than you might think - illnesses such as heart attack, depression and stress related illness, glandular fever, cancer and stroke are not uncommon and car accidents, sports and adventure holidays can also lead to serious physical injury. A significant percentage of the population have to take months off work at some time in their life.
You may be able to rely on sick pay from your employer for a month or two but what then? State benefits will not pay your bills for you. So it really does make sense to provide cover for your regular monthly income in the form of an Income Protection Plan.
What cover does an Income Protection Plan provide?
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Regardless of whether you are single or if you have a small army of dependents, an Income Protection Plan will provide you with a tax-free monthly income for the period you are away from work, whether you are in full time employment or are self-employed.
These types of plan normally let you cover up to 60% of your normal monthly income less state benefits, although some may let you cover more. It can be expensive, but it comes with a choice of deferment periods and extending this can reduce the costs. The more savings you have, the longer you can fund yourself before a claim needs to start paying out and therefore the cheaper the policy will be. Income under a claim will be paid either until retirement age, until the end of the policy term or until you are able to return to work, whichever is the earlier. Consequently, while you are rehabilitating or coming to terms with changes in your life, your financial position is secure and you are able to pay your bills and keep up your lifestyle. This can be of particular benefit to single people and for the self-employed as a lack of sick pay or financial support from a partner makes you even more vulnerable to a break in your income.
So while you may think it will never happen to you, just imagine the impact if you were away from work for a lengthy period and your income was drastically reduced. Taking out cover in the form of an Income Protection Plan can provide peace of mind and the reassurance that if the worse should happen you could still enjoy an income that will help take care of those bills that simply won't go away.
To discuss your requirements call us on 0800 3893796 or 01483 419288. Alternatively request a call from us by completing our contact form.