Long Term Income Protection – Permanent Health Insurance (PHI)
Permanent Health Insurance (PHI) or Income Replacement policies are designed to provide the policyholder with a replacement income in the event of a short and long-term sickness or disability. Payments are usually made when the policyholder cannot undertake their own job due to illness or injury.
PHI will pay out a guaranteed level of income every month for as long as your incapacity continues; if necessary until the day you hit 68 or will be officially retire. Normally, there is a maximum benefit payable from such a policy. This is usually 65% of a person’s annual income, less any benefits that they are entitled to from their employer and the state.
PHI policies can never be ccanceledby the insurer and most will allow you to make as many claims as you require, so long as the circumstances are legitimate. Depending on the premium that you’re prepared to pay, the monthly payments can be linked to the Retail Prices Index (RPI). This means that they automatically keep pace with the cost of living a process known as ‘inflation proofing’.
It is one of best ways to protecting your income and lifestyle.