Income Protection (PHI)

An Income Protection policy will provide a regular tax free income should you suffer a long-term disability or illness that prevents you working. The cover will continue until you either return to work or reach the selected expiry age.

Income Protection (PHI)

Life assured

This type of policy is only available on a Single Life basis

How much will I pay?

The premium is dependent upon a number of factors including your age, sex, occupation and general state of health. Premiums can be guaranteed, which are fixed for the term of the policy, or reviewable, where the provider can adjust premiums, up or down, at regular reviews dependent upon factors such as their overall claims history.

If you do not pay the premiums regularly the cover provided will lapse. In addition the structure of the plan will affect the premiums. These factors include:-

Deferred Period – There is always an initial number of weeks of incapacity before a claim commences known as the deferred period. This period is the number of weeks you will automatically receive income or be able to support yourself. This period is set at 4, 13, 26 or 52 weeks, and is decided at outset. The longer this period, the lower the premium.

Own or Any Occupation – Plans can be set up on an Own Occupation Basis, or an Any Occupation basis. There is an important distinction between the two, as it is more likely that you will be able to do any occupation rather than just your own specific occupation, making a successful claim less likely. Hence an Own Occupation plan normally would have a greater premium.

Policy Term – it is normally recommended that these policies are written to cover you until your normal retirement age.

Benefit Escalation – In the event of a claim it is important that the income payments escalate each year to counteract the effect of inflation and to ensure your standard of living can be maintained.

Level of Cover – Most providers impose a limit on the level of cover you can have, normally 50% of salary.

What will I receive back?

As there is no investment element to this type of policy it will never acquire a surrender or maturity value. However, should you have to make a claim you will receive the assure income until you are well enough to return to work.

Waiver of premium

Once a claim is in payment premium collection is suspended.

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