Accident, Sickness & Unemployment cover is available to help cover your monthly expenses such as mortgage payments, loan payments and insurance policy payments should you be unable to work after suffering an injury, sickness or redundancy.
Many policies of this type will pay out a monthly benefit after an initial waiting period and will pay out for upto 12/24 months or return to work, whichever happens first. You can also arrange just Accident & Sickness cover on its own to keep the monthly premium lower.
In recent times we have seen the jobless totals rising at an alarming rate. Nobody knows if and when they will be made redunadant and the uncertainty can be stressfull at times. There are certain insurance companies who will offer standalone Unemployment cover, please ask us for details and let us search for the most competitive quote.
Providing Longer Term Income Protection (Permanent Health Insurance)
Statutory Sick Pay (SSP) is paid by your employer for up to 28 weeks, but is unlikely to provide adequate income protection in the event of serious illness.
With Permanent Health Insurance, you can get cover for a wide range of illnesses such as heart disease, cancer and mental illnesses.
The benefits
Long-term illness is something we prefer not to think about but official figures show that every year more than 670,000 men aged between 40 and 64 are absent from work for more than six months because of it. Many suffer financial hardship as a result.
If you are an employee unable to work because of illness, you may be able to get Statutory Sick Pay (SSP) for up to 28 weeks. But the standard rate is only £79.15 a week.
The state offers only minimal help, with strict eligibility rules for incapacity benefit. After 28 weeks of illness claimants must undergo a test checking their ability to carry out a range of work-related activities such as walking, sitting and using stairs. Even if they qualify, benefits are not generous and they are taxable.
PHI may be the answer. PHI is also as income replacement insurance, income protection insurance, long-term disability insurance, disability income insurance or personal disability insurance and is available from most insurance companies.
It pays a regular income designed to protect your standard of living if you suffer long-term sickness or injury. Benefit usually starts after an initial waiting period of four, 13, 26 or 52 weeks and it is payable until you return to work, die or the policy term expires, whichever happens first.
It's called permanent because the insurer may not cancel the policy no matter how often you claim for benefit, although policies usually expire when the policyholder reaches 60 or 65. Insurance companies will not normally write new policies for applicants within five years of these age limits.
Some employers will offer a PHI scheme to workers. If your company provides it, make sure you are covered by the scheme. Many employers offer group cover to their workers free of charge, but even where cover is not free, premiums will usually be much cheaper than if you bought the identical cover yourself.
The amount of cover is based on a percentage of your gross earnings. Most insurance companies recognise four occupation grades. Class 1 embraces people in administrative or professional occupations and represents the lowest insurance risk. These workers pay the lowest premiums. In contrast, Class 4 comprises people whose work involves heavy manual labour and they are seen as riskier policyholders. Clerks pay a lot less than deep sea divers. Most companies refuse to insure people in high-risk occupations such as steeplejacks.
Waiting period
If you select a long initial waiting period before benefits become due, it will mean lower premiums. A policy with a 13-week waiting period will typically charge lower premiums than one with a four-week wait because the insurance company's costs will be lower. The waiting period chosen should tie in with the end of sick pay from your employer - usually 28 weeks. But there's no point opting for a long waiting period if this creates great financial hardship.