What is a typical monthly cost?
You can try a calculator online which will work out what your monthly payment might be. This will be based upon the details and nature of the policy you decide is right for you.
In the UK, insurance to safeguard your earnings can cost as little as £10 a month, but typically people pay between £50 and £80 a month. Remember, it can be more if you have existing conditions, a dangerous occupation, or an unhealthy lifestyle.
Will my sick pay be affected by all this?
The whole purpose of PHI cover is to take over once your entitlement to sick pay ends. It is an additional form of cover, not a replacement.
So, in short a PHI policy will have no impact on your sick pay. But sick pay will not cover you if the result is that you are off work for a long while due to a health issue.
How is payment made if I’m not at work?
Payments will be made into your bank account. They continue until the plan terminates. Or, for users that do not survive to the end of their plan, they stop at death.
After you make your claim you must wait until the deferral period passes. Then you will receive payment. This is the agreed percentage of your gross salary.
Payments generally occur on a monthly basis.
Will my PHI payments be taxed?
Payments are not taxable, you will be pleased to know. So, you do not have to pay tax on the income you get from your claim.
But, this does not make the whole thing totally tax-free. You have paid the national insurance and income tax on your monthly premiums, which is why it is not charged twice.
Where can I get a quote and advice?
PHI is a complicated market to navigate because there is such a range of policies and providers! What is more, providers have regular updates and changes to their prices. So, it can be hard to give a straight answer to questions such as the best provider and deal.
You can use online calculators to estimate quotes. However, it is recommended that you shop around and talk to a member of an advice team. They can point you towards good deals.
A professional adviser can explain the differences between policies. They can also discuss the quote in the context of your personal situation.