Recruitment HomepageLibraryCritical Illness Cover and Permanent Health Insurance

Replacing income after an illness and insuring against unexpected events are very important parts of financial planning, both on a personal and corporate basis. Ask yourself these questions:

	What happens if you are unable to work for a long period of time as a result of an accident, illness or disability?
	If one of your employees was unable to work for a long time, would you feel obliged to continue paying his or her wages?

There is a way in which you can protect your income should you be unfortunate enough to suffer an illness that may see you unable to work. Permanent Health Insurance offers financial security for yourself and your family, and will provide you with an alternative source of income. This income can be payable after a deferred period of 13, 26, or 52 weeks. The deferred period is the length of time between when the illness is first diagnosed and when you start receiving an income from the policy. The income will be paid to you until retirement or earlier, depending on when you are fit to return to work. Under current legislation, premiums paid to a Permanent Health Insurance plan will receive tax relief at your marginal rate of tax.

Critical Illness Cover on the other hand, pays you a lump sum if you are diagnosed with a specific medical condition e.g. heart attack, stroke, cancer, or if you require a major organ transplant. There are up to 26 illnesses covered under this type of plan, and benefit is normally payable on diagnoses of a specified illness. This lump sum benefit can then be used as you see fit. Some people choose to pay off an outstanding mortgage or loan in order to reduce their monthly outgoings, thus alleviating financial hardship at an already difficult time. Should you feel fit enough to return to work, you can do so, without losing your benefit.

Both these plans can be taken out by an individual or by a company for their employees. They help to alleviate the pressure for the company to continue paying a member of staff who is unable to work.

Permanent Health Insurance and Critical Illness Cover are subject to policy terms and conditions. You should obtain professional advice before taking out cover.

Catherine Keating is an Employee Benefits & Investments Consultant with Coyle Hamilton

back