Permanent Health Insurance (PHI)

Clearly there are illnesses and chronic conditions plus permanent disabilities which are not going to be cured or go away. Consequently the private health insurance industry, in recent years, has responded to public demand for private health cover plans which can protect a portion of one's net income if unable to work for some period of time. Private health cover plans offered in this category by a health insurance provider are INCOME PROTECTION COVER and CRITICAL ILLNESS PLANS, which cover such as dismemberment or loss of an eye or hearing loss.

When do you need Permanent Health Insurance?

There is never a right time to fall seriously ill, or become involved in an accident.

It is never planned, but can happen to any of us. When long term illness brings one to a halt, it can often bring our income to a halt also. Continuing to be able to settle one's routine bills, mortgage, electricity, gas, water, fuel and food, can become increasingly difficult as time goes on. The State safety net of statutory sick pay and the facilities of the NHS are now largely emergency only and only help part of the problem.

How do I maintain my standard of living when ill?

This is where private health cover can help.

You may have wisely taken out PMI cover to provide private health care and make sure that your stay in hospital is both immediate comfortable and private, coupled with a Permanent Health Insurance Plan of Income Protection which takes care of up to 70% of your gross income needs. Income Protection insurance can "kick in" after 4 weeks or 12, 26, or even 52 weeks of illness, dependent on your Plan. It will run from the deferral period to either the termination of the disability/illness or the death of the insured person, or the Plan expiry date which is usually 50, 55, 60 or 65 years old.

"It will never happen to me" syndrome

Statistics for working people between the ages of 20-64 years indicate that the possibility of a long period of illness must be taken seriously. At 31 May 1997, over 1,700,000 men and women had been unable to work for more than six months and were claiming the Incapacity Benefit from the State. (Source: Govt States Office quarterly summary of statistics May 1997).

Types of income protection insurance plans

Premiums paid to a private health insurance provider for Income Protection Insurance Plans are usually paid monthly by direct debit or annually. Three standard types of cover are often offered.

1. Level Cover: Under this income protection insurance, benefits and contributions remain level through the plan term

2. Increasing Claim: Under this income protection insurance, benefits increase at a 5% rate during the course of a claim

3. Increasing Cover: Both benefits and contributions increase at a 5% rate annually

The general insurance definition for Disability Benefit states that an Income Benefit will be paid to an individual if they are totally unable by reason of sickness or accident, to follow their normal employment. The benefit will commence at the end of the DEFERRED PERIOD and will continue until the earliest to occur, that is:

Termination of the Period of Disability
Death of the Insured person
Plan expiry date

Income protection insurance cover is sometimes offered whilst abroad, but benefits are limited. If you take a lower paid job after a period of illness, you may only be entitled to a portion of your Income Protection Benefit as the amount received would be based on the ratio of your drop in income to your original income. Private health care rehabilitation and hospitalisation benefits are sometimes added as extras, but the small print of your income protection insurance policy needs reading in every case. A WAIVER OF PREMIUM is a useful tip to know, as if you are not earning, this clause allows your Plan to continue with the health insurance provider covering any costs of premium whilst you are ill or suffering from an accident.

For a Range of Permanent Health Insurance Premiums from quality Insurance Providers

Critical Illness Insurance

Critical Illness Insurance Cover Plans are growing in popularity as medical science and technology today can save lives far more readily than thirty years ago, when cancers and strokes were virtual death sentences. Such serious illnesses may leave us unable to work again, so how do we survive financially? Traditional Life Insurance pays out on death, not if you survive but are physically or mentally impaired.

How frequently do these illnesses happen?

According to statistics from the Strokes Association, some 100,000 people in England and Wales annually suffer their first stroke with almost 8,000 of those being under 55 years old. A third die within 12 months and another third, over 30,000, are left to live with long term disability. Some 300,000 people annually have heart attacks and half will die (British Heart Foundation figures). More than 30,000 women each year in the UK (Cancer Research Campaign) are diagnosed with having breast cancer. As technology improves our survival rate considerably, long term changes to lifestyle are usually inevitable, followed by financial consequences. You may be unable to continue working or have to change career, downsizing your income.

Critical Illness insurance companies design their cover to provide a lump sum, income or both, to bear the costs of a chronic or permanent health change due to illness or accident. Unlike Life Insurance, Critical Illness Plans pay out whilst you are alive. Costs of nursing care, stair lifts, widening doorways, ground floor bedroom conversion costs etc. can all be covered. Your greatest financial need may be when catastrophic events happen to you, not after you are dead.

Critical Illness insurance companies provide a variety of types of Critical Illness Insurance Plans. Plans may be taken out with a private health insurance provider over a fixed term, or even combined with a Life Insurance Plan. They can be stand alone or include a spouse in joint cover. Consequently, the wisest healthcare insurance choices are a careful combination of both PMI and PHI cover plans.

Article prepared by
Mr J Leslie Smith
Founder - Medibroker Limited

Email: ukclientservices@medibroker.com
Web Sites at www.medibroker.co.uk and www.medibroker.com

For a Range of Permanent Health Insurance Premiums from quality private health cover Insurance Providers