Introduction

When it comes down to it what matters most to people is their family. When it comes to the crunch, its family we first think of, family we worry about and family that gives us most happiness. The desire to protect those closest to us is a fundamental need.

We can never know, what life will throw at us in terms of ill-health, disability or death, but what we can do is make sure our family is financially secure should the worst happen.

This is where life assurance and other protection policies such as Income Protection and Critical Illness Cover come in. Because life assurance has been around so long, and because everyone should have some level of financial protection, more than 100 companies provide life assurance and protection policies. This makes for a competitive market which can only benefit consumers.

Get a Quotation Income Protection

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Permanent health insurance

Known as income protection makes up income lost through illness, accident or disability. Rates vary according to the dangers associated with one’s job, age, state of health and gender but PHI is thought to be of particular value to the self employed who do not have an employer to continue paying their salary if they are unable to work.

The costs

A number of factors influence the size of premium you pay.

Occupation

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.

Remember, if you change job to one in a different class some companies will continue to provide cover while others may cancel it. It's vital you tell your insurance company if you start a new job - failure to do so could invalidate a future claim for benefit.

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.

Payment period

For how long do you want the policy to pay benefits? The shorter the payment period, the cheaper the premium.

Gender

Not that there's a lot you can do about it but statistics show that on average women are more likely to suffer ill health than men during their working lives. Consequently, premiums are higher for a woman than for a man of the same age and occupation.

Smokers

Waiver of Premium

If illness prevents you from working your monthly premiums are paid on your behalf for after a set deferment period.

Non-smokers pay less!

Income Protection Premiums

Life insurance policyholders pay premiums into a fund from which all claims are paid out. There are two types of premium available – the guaranteed and reviewable policies:

• Guaranteed Premiums – The life insurance company guarantees to never increase your policy premium.
• Reviewable Premiums – You agree that the company can review your policy at set intervals.

Initially the reviewable premiums will work out cheaper. However, over time these premiums are likely to be increased and therefore the overall cost will surpass that of the guaranteed premium.

*By using this quotation system cover is not guaranteed and subject to the insurers normal underwriting conditions.