Health Insurance.
Regardless of whether you are single or have dependants, if you are suddenly unable to work, your income disappears completely.
For the employed, most companies will provide some form of sickness cover in the short-term, i.e. a few days, weeks or even months, but what about if you were ill for longer than this? Beyond this you would be reliant on Statutory Sick Pay. Assuming that you qualify for this, did you know that the standard rate is currently £75.40 per week (2008/09)? How does this compare with what you currently earn?
There are various types of policy, described in brief below:
Accident Sickness & Unemployment Cover (ASU)
This type of cover is usually considered in conjunction with a personal loan or mortgage. It is designed to pay a fixed monthly benefit in the event of accident, sickness or redundancy. Payments will generally commence within 1 - 3 months of the incident and be payable for usually 12 to 24 months.
Permanent Health Insurance (PHI)
Like ASU this policy replaces your income in the event that you are unable to work because of illness. Typically you can cover up to three quarters of your income, less any State Benefits which you become eligible for.
Unlike ASU, the income is generally payable for longer, usually until retirement or until you are able to return to work. Consequently your financial position is secure and you are able to maintain the same lifestyle.
There are many different providers that offer this type of cover and individual plans vary, so it is important to obtain advice.
Critical Illness Cover
Like PHI this plan pays out whilst you are still living but become incapacitated through serious illness or injury. Like life cover, it pays out a lump sum which could be used to help fund changes that might need to be made to your lifestyle or to redeem a mortgage.
One important factor is that different providers can offer cover for different illnesses and some plans cover a far wider range of conditions than others. Here, it is not just a case of comparing premiums but comparing the level of cover provided and this is where we can help.
Serious Illness Cover
This is a fairly recent development in the marketplace and is similar to critical illness cover but with some important differences. The main difference is that critical illness cover will only pay the benefit upon diagnosis of a specified illness as a one off, whereas serious illness cover could provide a proportion of the benefits with additional lump sums payable should the condition deteriorate. Again you can see how important it can be to obtain the correct advice.
Private Medical Insurance
This cover can provide insurance for a wide range of conditions to enable you to obtain private medical care. The scope of cover can vary considerably as can the costs so it is important to obtain advice.
