In the market today there are a number of important options to consider for personal protection insurance.
Popular types of policy would cover you for loss of income due to sickness or injury (income protection), private medical treatment (health insurance), suffering a serious illness (critical illness) or payout a lump-sum should you or your partner pass away (life insurance).
This page sets out some basic details of each policy type but please follow the links in the box below for more information on each policy.
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Health Insurance to cover the treatment of acute conditions. |
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Life Insurance to protect your loved ones should the worst happen. |
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Income Protection to protect your income should you be unable to work. |
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Critical Illness provides a lump sum should you suffer a serious illness. |
Private Health Insurance
Private health insurance is a means of avoid long NHS waiting lists and receive quality treatment in private hospitals and wards. All policies cover the full cost of consultations, treatments, tests and scans for conditions that are serious enough to require an overnight stay in hospital.
More comprehensive plans also cover medical attention conducted as an outpatient (where no overnight stay in hospital is needed), such as outpatient radiotherapy and chemotherapy for cancer treatment. Comprehensive plans also provide a greater degree of cover for physiotherapy, osteopathy / homeopathy and dental surgery, to name just a few additional benefits.
Income Protection Insurance
Income protection insurance is the most complete form of personal protection insurance. It can provide both short-term and long-term cover from the risk of sickness or injury.
The policy would pay a month benefit should you suffer a health condition that prevented you from working. The payout from the policy can be used for whatever purpose you wish, whether that is to cover mortgage payments, utility bills, school fees or general living costs.
It is possible to insure up to 65% of your gross (pre-tax) income. If you so wish, the policy could cover your income all the up until you retire, thus removing any risk of financial struggle due to illness for the whole of your working life. After your chosen deferred period (ranging from 1 month to 12 months), the policy would pay a monthly benefit until you either return to work or the policy term ends.
Term Life Insurance
Term life insurance is both a form of family protection and personal protection. This type of policy pays out a tax-free lump sum should you pass away. Life insurance is often taken out to leave family members a sum should you pass away or to protect a mortgage loan (mortgage payment protection can be used to protect your mortgage payments should you suffer accident, sickness or unemployment).
The policy is taken out for a specified period of time (the term) and the sum insured can remain flat over time (level term insurance) or decline over the length of the policy to zero as the plan ends (decreasing term insurance). The latter policy type is often used to cover a repayment mortgage and commands lower premiums each month. Both policy types can be taken out in joint names with your partner and critical illness protection is an option that can be added with ease.
Critical Illness Cover
Critical illness cover is a well established and comprehensive form of personal protection insurance. The policy would payout a tax-free lump sum directly to you should you suffer a serious illness or injury. Leading policies will cover around 35 ‘critical’ illnesses, including cancer, heart attack and stroke.
The payout from a critical illness policy can be used for whatever the policyholder decides without restriction. It is often that case that this type of cover is added to life insurance to provide a well-rounded means of personal and family protection. Due to underwriting techniques the price of a life and critical illness policy is about the same as a standalone critical illness plan. As with life insurance it is possible to take out a joint policy, possibly to cover a mortgage loan.
Next Steps
When it comes to personal protection insurance there are a number of options and policies to choose from. If you need any assistance or advice please feel free to contact us and one of our expert advisers will be able to talk you through your options.
