Life insurance vs./and/or critical illness cover

Weighty1

dunstonh said:

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

Burnsie1983 said:

dunstonh said:

Life insurance is cheap as chips, but add in >£60+ CI, then goes up quickely.

It would do.  You are more likely to claim on CIC than life assurance.

But then there is "income protection insurance"...which I can get for cheaper...but it looks like the only diference is it's not a lump sum! 

Depends on what you mean by income protection.
There is the PPI version of income protection which is pretty useless much of the time.
Then there is the PHI version of income protection which is much better but the policies can be pretty much placed into budget, standard and comprehensive levels.  Those are not official classifications but you can effectively split them that way.  Budget end ones are nearly as useless as PPI.   Standard and comprehensive levels are much more likely to be suitable.

I don't suppose you have time to expand on why you believe some of these are useless? And also what PHI means 😀

PHI stands for Permanent Health Insurance.  Income Protection was originally called this because once it's in force it is permanently binding on the insurance company who can't cancel just because, for example, you become a poor risk.  I'm not sure why the name persists on here as literally NO ONE out of this forum ever refers to it as PHI.  It is Income Protection, that's it.

Namely because ASU/PPI is also sold under the title of Income Protection these days and need to differentiate the two as they are materially different products even though at the highest level they both provide payments if you are too ill/injured to work. 

I totally understand that by why use a phrase that not a sinngle life insurance provider uses any more?  Use it's proper name and then distinguish it from Short term IP, ASU, MPPI due an explanation of how it differs.  Using PHI helps no one.

A google shows some are still using the term, for example https://yulife.com/blog/permanent-health-insurance-vs-income-protection/ and https://www.drewberryinsurance.co.uk/income-protection-insurance/permanent-health-insurance both examples in the last 12 months of intermediaries using the PHI term in online marketing. The former is amusing given its comparing PHI against IP 

Plenty more articles but most are undated so can't say if they were published last week or a decade ago. 

Yes, and as per my comment to Dunstonh, NONE of the insurance providers use the term.

The generic name "permanent health insurance" is not very marketable.  So, it's no surprise to see providers give their product a different marketing name.   However, the use of PHI as a reference point for the type of plan is still commonly used by those in distribution.

No it isn't.

MyRealNameToo

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

Burnsie1983 said:

dunstonh said:

Life insurance is cheap as chips, but add in >£60+ CI, then goes up quickely.

It would do.  You are more likely to claim on CIC than life assurance.

But then there is "income protection insurance"...which I can get for cheaper...but it looks like the only diference is it's not a lump sum! 

Depends on what you mean by income protection.
There is the PPI version of income protection which is pretty useless much of the time.
Then there is the PHI version of income protection which is much better but the policies can be pretty much placed into budget, standard and comprehensive levels.  Those are not official classifications but you can effectively split them that way.  Budget end ones are nearly as useless as PPI.   Standard and comprehensive levels are much more likely to be suitable.

I don't suppose you have time to expand on why you believe some of these are useless? And also what PHI means 😀

PHI stands for Permanent Health Insurance.  Income Protection was originally called this because once it's in force it is permanently binding on the insurance company who can't cancel just because, for example, you become a poor risk.  I'm not sure why the name persists on here as literally NO ONE out of this forum ever refers to it as PHI.  It is Income Protection, that's it.

Namely because ASU/PPI is also sold under the title of Income Protection these days and need to differentiate the two as they are materially different products even though at the highest level they both provide payments if you are too ill/injured to work. 

I totally understand that by why use a phrase that not a sinngle life insurance provider uses any more?  Use it's proper name and then distinguish it from Short term IP, ASU, MPPI due an explanation of how it differs.  Using PHI helps no one.

A google shows some are still using the term, for example https://yulife.com/blog/permanent-health-insurance-vs-income-protection/ and https://www.drewberryinsurance.co.uk/income-protection-insurance/permanent-health-insurance both examples in the last 12 months of intermediaries using the PHI term in online marketing. The former is amusing given its comparing PHI against IP 

Plenty more articles but most are undated so can't say if they were published last week or a decade ago. 

Yes, and as per my comment to Dunstonh, NONE of the insurance providers use the term.

Can you name any insurer that writes both ASU and PHI? 

All the ones I've worked for do one or the other so when talking about what they do there is no risk of confusion by using the generic "IP" irrespective of which they write. I've certainly seen the use of PHI internally with two underwriters, though my involvement was modest on their protection business as either I was focusing on the general insurance or annuity business at the time. 

What difference does it make if a company writes both ASU and PHI?  L&G used to until a few years ago but their client book has been taken over by Wessex.  Obviously they are regulated in totally different ways so a lot of insurers offering PHI products aren't interested in bothering with this aspect of GI regulated policies, which is understandable.

You can't claim there's no risk of it being confused by the generic IP term when PHI in itself causes confusion so it still needs explaining and how it then differs from the other forms of IP.

How long ago did you see the term PHI?  Because I've been an insurance adviser for 18.5-years and only EVER arranged insurance meaning I'm looked at KFDs and policy summaries almost daily.  I can pretty much say that once I completed by CeFA and entered the industry I never saw the name used again or at least certainly not within at LEAST the last 10-years.

Checking LinkedIn, 6 years ago was the last time dealing with protection products in a professional capacity. Remember that I am seeing internal papers going to Chief Actuary and the Technical Committee etc, not documents for external consumption

dunstonh

Weighty1 said:

dunstonh said:

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

MyRealNameToo said:

Weighty1 said:

Burnsie1983 said:

dunstonh said:

Life insurance is cheap as chips, but add in >£60+ CI, then goes up quickely.

It would do.  You are more likely to claim on CIC than life assurance.

But then there is "income protection insurance"...which I can get for cheaper...but it looks like the only diference is it's not a lump sum! 

Depends on what you mean by income protection.
There is the PPI version of income protection which is pretty useless much of the time.
Then there is the PHI version of income protection which is much better but the policies can be pretty much placed into budget, standard and comprehensive levels.  Those are not official classifications but you can effectively split them that way.  Budget end ones are nearly as useless as PPI.   Standard and comprehensive levels are much more likely to be suitable.

I don't suppose you have time to expand on why you believe some of these are useless? And also what PHI means 😀

PHI stands for Permanent Health Insurance.  Income Protection was originally called this because once it's in force it is permanently binding on the insurance company who can't cancel just because, for example, you become a poor risk.  I'm not sure why the name persists on here as literally NO ONE out of this forum ever refers to it as PHI.  It is Income Protection, that's it.

Namely because ASU/PPI is also sold under the title of Income Protection these days and need to differentiate the two as they are materially different products even though at the highest level they both provide payments if you are too ill/injured to work. 

I totally understand that by why use a phrase that not a sinngle life insurance provider uses any more?  Use it's proper name and then distinguish it from Short term IP, ASU, MPPI due an explanation of how it differs.  Using PHI helps no one.

A google shows some are still using the term, for example https://yulife.com/blog/permanent-health-insurance-vs-income-protection/ and https://www.drewberryinsurance.co.uk/income-protection-insurance/permanent-health-insurance both examples in the last 12 months of intermediaries using the PHI term in online marketing. The former is amusing given its comparing PHI against IP 

Plenty more articles but most are undated so can't say if they were published last week or a decade ago. 

Yes, and as per my comment to Dunstonh, NONE of the insurance providers use the term.

The generic name "permanent health insurance" is not very marketable.  So, it's no surprise to see providers give their product a different marketing name.   However, the use of PHI as a reference point for the type of plan is still commonly used by those in distribution.

No it isn't.

yes it is.  Just because you don't doesn't mean others do not, especially those with a longer history in the industry.

Products often undergo marketing name changes over time, but many will still refer to them by their generic name rather than their marketing name.  Especially when you are focusing on making sure the person looks at the PHI version rather than the PPI version.

I have a trainee adviser coming through, and the CII material still mentiones Permanent health insurance.   HMRC still reference PHI.

Compare the market say: Long-term income protection, also known as permanent health insurance......  What’s the difference between long-term income protection and permanent health insurance?

There is no difference. Permanent health insurance is simply the name used by the insurance industry for income protection.

Which?  just referenced PHI in an article published a week ago.  Citizens' Advice still has it on their site, and a Google search indicates plenty of employment and advice firms still referring to it as PHI.

It does seem really bizarre that this discussion is ongoing.   It really isn't an issue if people want to use the current marketing name or the original generic name, as long as they get the right product.

ppp123

A lot of confusion here comes from the fact that these products are solving different problems.

Life insurance protects other people if you die.
Critical illness pays a one-off lump sum for a specific list of conditions.
Proper income protection (PHI) is about replacing income if you can’t work, often for many years, regardless of whether the condition is “serious” or not.

For someone with no dependants, the real financial risk is usually loss of income, not death. That’s why many people prioritise PHI first, then decide whether a smaller CIC lump sum adds anything on top.

One thing that helped me understand the difference was seeing how payouts compare over time — a lump sum vs a long-term monthly benefit. I came across a simple UK income protection calculator that walks through that comparison here.

Not advice obviously, but it helped frame whether a lump sum or income replacement actually matched the risk being insured.