What is ‘Permanent Health Insurance’?

Permanent Health Insurance is an insurance which may be optional or required in relation to a housing loan.  PHI can be arranged as an individual or as part of a group scheme organised by their employer or a trade union. PHI is to provide an alternate income in the event that the individual suffers a loss of income by being unable to work due to sickness or disability lasting longer than the “deferred period”.

This period is typically 26 weeks (although it can be as low as one day or four weeks), so the policy does not pay out until the 26 weeks have passed. The payments are liable for income tax, under the PAYE system, however the policy premiums qualify for income tax relief at the individuals marginal rate, up to a limit of 10% of total income.

The payments could continue until the individual returns to works or the policy cease date is reached, which might be at the age of 60 or 65.

An optional extra usually offer with PHI policies is a “waiver of premium” (wop), …

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Types of life cover, term assurance and whole of life

Temporary Assurances

Temporary assurances (term assurance) provides life assurance and /or serious illness cover for a fixed period (called the term) usually for a fixed premium. These policies are called temporary because they provide life and serious illness protection cover, when the policy term ends there is no cash pay out and the policy ceases.

The policy pays out a capital sum if the insured event happens, that is death or serious illness. Of course should the policy holder stop paying the premiums the cover will cease. The policy term is from 1 year upwards, typically 30 – 40 years, some life companies have an upper age limit on temporary assurances of 75 – 80 years.

There are five types of temporary Assurance Policies. a: Term Assurance b:  Convertible Term Assurance (CTA) c: Section 785 Assurance d: Family Income benefit (FIB) e: Mortgage Protection (MPP)

Whole of Life Assurances

Whole of life assurance policies have no fixed term, they do not cease at a fixed point in time, they provide cover throughout life. However this cover might not be guaranteed. …

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Dear Deeter: your finance questions answered

Dear Deeter,

I haven’t done anything wrong, in fact, I’ve done something right (just this once!)… I didn’t crash my car or have any claim against my insurance and yet the price this year has gone up? What have I done wrong? Why is my insurance getting more expensive?

Sincerely,

Curious in Tipperary,

—–

Dear CinT

(that acronym is for ‘Curious in Tipperary’, not the other word it may look like)

The simple fact is nothing ‘wrong’ has occurred from a personal point of view, you didn’t ‘do’ anything, rather (no joke) it was actually the rest of the world who made the error…. O.k. it’s not that simple, but it ain’t far off either.

The way insurance companies make money is by taking premiums from you, a certain amount goes for ‘re-insurance’ where they pass on some risk to another company, in essence the insurance company takes out insurance – in the last year there have been more claims as burglaries increase with the recession, there has been some freakishly bad weather with floods, freezes and snowfall all wreaking …

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