Glossary: Permanent health insurance

PHI – now commonly referred to as income protection insurance - pays a regular income if you are unable to work due to long-term sickness or disability and is called “permanent” because the insurer may not cancel the policy no matter how often you claim. It does not cover redundancy, but you could buy it as a bolt-on. The tax-free benefit is payable until recovery or until a specified date (whichever is earlier), but is subject to a deferred period which should take account of any benefits provided by the employer. PHI should not be mistaken for PMI (private medical insurance); a completely different form of health insurance that covers the costs of private medical treatment, not the possibility of you becoming ill and being unable to work as a result.

Relevant to: Health insurance

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