Permanent Health Insurance Explained
Permanent Health Insurance will provide you with a replacement income should you become ill or have an accident. Although Statutory Sick Pay (SSP) is paid for up to 28 weeks by your employer, this won’t cover you for anything more long term. After this period, you could claim incapacity benefit, although the government have got tough with this and to be eligible you will need to undertake a series of work-related tests.
No-one wants to think about a debilitating illness -we often put these thoughts to the back of our minds. After all, why think about something that might never happen? Unfortunately, it’s this lack of foresight that means many families are left in financial hardship when the main bread-winner in the family is unable to work due to illness. Each year, around 650, 000 men over 40 are absent from work for than six months - for much of this period, there is no regular income available.
Permanent Health Insurance can provide you with peace of mind should the unexpected happen. Also known as Income Protection Insurance or Long Term Disability Insurance, it pays you a regular income, usually between 50 - 60% of your gross salary.
There is often a waiting period before you receive your first payment - you will need to discuss this with your insurer, but is usually 4, 13, 26 or 52 weeks after you become ill, and is payable until the policy expires, or you return to work. A policy with a long waiting period will charge lower monthly premiums; if you choose the 4 or 13 week option, then you pay a higher monthly premium.
Permanent Health Insurance will differ in what constitutes a long-term illness. Anything self-inflicted, such as drug or alcohol-induced will not be covered. You will need to check your policy carefully - after all, you don’t want any nasty surprises when you make a claim.
Be careful, too, of permanent health insurance policies that insist you must be unable to perform any occupation before a payout is made. Making a claim on these Permanent Health Insurance plans is nigh on impossible - only your insurers will benefit from these dubious agreements!
If, following an accident or illness, you are able to return to work on a part-time basis, your insurance company may agree to pay you a reduced benefit. Again, check the small print carefully, or take advice from a financial advisor.
Consider also how long you wish to receive payments through your Permanent Health Insurance - the longer the payment period, the higher the premium. It’s also worth mentioning that women tend to pay more than men in the Permanent Health Insurance world - this is simply a matter of statistics. Studies show that women are far more likely to suffer from long-term illnesses than men. If you already suffer from an ailment, then you will probably be excluded from this in your Permanent Health Insurance plan. After you declare your medical history in your application, you may be required to have a medical examination. Always be honest in this part of the procedure! If you do not declare all your medical history a claim in benefit could be refused.
In many of these plans, the insurers will guarantee that the monthly premium will not change - unless of course, you decide to change the parameters of your cover. For example, you may wish to increase or decrease the waiting period.
Some Permanent Health Insurance providers will ensure that these premiums are fixed for a period of time, but they could increase after this point, dependent on a review across their policies. This means you could end up paying further down the line.
If all of this advice is making your head spin, don't worry - just take your time when shopping around for policies. Most companies will make it clear how their Permanent Health Insurance works.
But don’t wait too long! You can never be too sure what the future holds - get some Permanent Health Insurance to keep yours and your families minds at rest.
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