Permanent Health Insurance

Ingsy

What should I look out for in a policy?

I have had an offer accepted on a property, and while seeing an IFA the conversation got round to mortgage payment protection / critical illness type cover, and he suggested on of these, and will sort some figures out etc for me.

Can anyone please give some advice on what sort of things I should look for, and what sort of questions I should be asking?

Thanks very much.

ACG

Will you be getting level or increasing cover - ie will you get the same cover now as in 10 years time or will it go up each year (usually even in line with inflation or a set percentage). This will cover you for pay increases if its increasing.

Some life insurance offices have cover that goes up at say 5% each year but the premiums actually increase at a higher rate. I cant remember which companies do this off the top of my head but i think Zurich maybe 1 of them.

Will you be getting Own Occupation or Any occupation - Own occupation will mean that you can make a claim if you are unable to do your own occupation. Any occupation means you can only make a claim if you are unable to do ANY occupation - therefore Own occupation is better, but is not usually available for occupations such as builders or musicians. Its more for office related jobs.

a good feature of some of the policies is where if say you were unable to do a job on the same pay but you did want to go back to work with a lower paid job, it will top up your wage to a higher amount.

Ingsy

Thanks for the comments - certainly given me some food for thought. I had Critical Illness & Life Assurance cover when I bought my first place, and it's only now I'm sorting out a new mortgage I'm looking into this. I'd never heard of Permanent Health Cover before, and so I'm trying to read up on it and work out the best way to go about things.

I currently do an office job, so Own Occupation would seem to be the way to go. As for level or increasing cover it would seem at first thought that increasing cover would be the way to go, as this will be a 25 year mortgage and, hopefully, my salary will go up over that period of time!

Thanks again for taking the time to reply.

dunstonh

You also have budget, standard and comprehensive plans. Whilst not called that, you find the cover reflects that sort of range with some really dire dirt cheap ones (which are barely worth paying for, even if its not that much).

jamesd

PHI is one of the best types of insurance out there: it's protecting you if you can't work but have to live through it.

magpiecottage

jamesd wrote: »

PHI is one of the best types of insurance out there: it's protecting you if you can't work but have to live through it.

I agree - of course if you don't live through it you will not need the property any more so the bank can have it back!

Seriously, PHI will provide an income if any illness prevents you working (though not if you lose your job) so that you can carry on meeting mortgage repayments.

Critical Illness will provide a lump sum - which may pay the mortgage off - but only if you are "lucky" enough to get the right illness.

Ingsy

Thanks for your comments everyone. I think I will go with some Permanant Health Insurance, along with Death cover, for both my wife and I so my either of us isn't left in the lurch should one of us shuffle off early.

Thanks again

ACG

I would in the majority of cases go for PHI over life or Critical illness.

I would put my money on the fact you have a decent advisor there. Most will just recommend life or life/critical illness because its an easier sell. So whilst im not saying dont do your own research - i would guess that he/she are doing theirs.

SusanSpain

Sorry for my ignorance - need to know more about PHI - what it covers, who offers this type of policy (whom it is suitable for), exptected cost (I am 45 and self employed).

Thank you.

dunstonh

IFA is largely an IFA arranged policy nowadays. You rarely find it online as the quote sites tend to offer the budget PPI option which is easier for them to set up and pays them more per payment.

Cost is based on individual circumstances as its underwritten at point of sale. There are budget, standard and comprehensive levels (as already mentioned on the thread).

It is for people who want to protect their income from long term illness. Tends to be heavily used by the self employed due to the lower benefits self employed get.