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    PHI provides long-term income protection (IP).

    IP replaces a proportion of a person’s income should they become unable to work due to illness or injury

    A monthly benefit is paid until the insured reaches the policy end date, they recover or die

    Payment of benefits begins after a qualifying time, referred to as the “deferred period”. This can range from 1 to 12 months

    Generally policies will pay 50-65 per cent of gross earnings, so there is still an incentive to return to work

    Current UK tax rules allow the benefit from an individual IP to be paid tax-free. This equates to around 80% of net pay

    IP claims are not limited. Unlike ASU & MPPI policies, the insured may make any number of claims during the life of the policy

    IP can compliment ASU & MPPI by starting to pay out once the benefits from these shorter-term policies cease

    This can usually be done by utilising a 56 week deferred period which also has the advantage of lower IP premiums

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Do I need this cover …..?    Ask yourself these questions:

What does my income support, and how could I make ends meet without this income and for how long ?

Will my income fall if I can no longer work due to ill health ?

What could I continue to pay if my income fell dramatically and could I continue to pay the essential bills ?

How long will my employer continue to pay me if I become ill, and how much ?

How much will the state support me, and could I survive on that ?

 Employer / State support

An employer’s statutory obligation to provide Statutory Sick Pay (SSP) is for 26 weeks at a current £72.55 p w (April 2008)

Some employers provide full pay for up to 6 months, but few offer such benefit beyond this period.

Self-employed people have no such luxury

State incapacity benefit is designed to alleviate poverty not maintain lifestyles and the current short-term incapacity benefit is £63.25 per week.

Not all people that are unable to work because of health are eligible for this State benefit as eligibility is determined by a stringent personal capability assessment.

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Considerations of cover requirements and costs

The amount of cover required would be an individual decision based upon circumstances including commitments and existing cover.

Once this is established there are other considerations that will affect the premium cost. This briefly will be:

• Applicant’s occupation – some are riskier than others

• Age

• Sex

• Current state of health

• Smoke or not

• Benefits static or increasing – index linked options are available

• Premiums guaranteed or increasing

• Deferred period chosen – the longer this is, the cheaper the premium

• Definition of incapacity chosen. Broadly these are:

                                 ii.          Any occupation as suited by training, education or experience – the insured will qualify if they are unable to perform their own or a similar occupation within reason

                               iii.          Activities of daily living / personal capability assessments – often used for higher risk clients where they will qualify if they are unable to perform a set number of predefined tasks

                                iv.          Any occupation – less common now, where qualification for benefit occurs if  the insured is unable to perform any occupation at all

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Indicative rates:

The table shows IP premiums from one provider for a  male non smoking office worker with a 56 week deferred period. The benefit is index linked; the premium rates are guaranteed for 5 years and are not subject to Insurance Premium Tax (IPT)

Current age	Termination age	Monthly benefit £	Monthly premium £
30	55	1000	10.50
30	55	1500	14.25
30	55	2000	18.00
35	60	1000	14.30
35	60	1500	19.95
35	60	2000	25.50

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How to apply …… ?     Because of the wide range of  parameters, quotations at present are only available on application to ourselves. This we hope will presently be rectified by the availability of an on line system.  To request a quote, kindly complete the following questionnaire and submit to ourselves by clicking the submit button. We will then forward to you a specific quote for your consideration.

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