New Ireland Income Protection (PHI)

minmdog

Hi

I am considering changing to New Ireland (from Friends First) for Income Protection (aka Permanent Health Insurance - PHI) as they seem to have two appealing features, that is if I understand them...

- Confirmed Income. I believe this means protection is based on the income level agreed on the policy at setup. Because I am self-employed my income can vary a little so I like this certainty

- Normal Occupation. I believe this means I am protected if I cannot return to my, well, normal occupation... I am a software engineer so if I can't sit at a desk and read/type fairly quickly then I can't do the job I have had for 17 years! I could likely do something else in IT with an illness or disability which is great in itself but I mightn't have the same earning power and therefore can't provide the same for my family...

What my fear is with my current FF policy is that I would not get an income from them while I could return to another, admittedly similar, job I was capable of doing. But then if that's the case then what is the cover actually for?

Hope someone can set me right on this!

Henry Ford III

Tread carefully and get proper advice.

Income wise from an insurers perspective income at the date of claim is the best and fairest option. Allowing a claim based on an earlier higher income is actually risky - a client with dwindling income might be inclined to think about using his PHI as a financial backup.

Most PHI policies will include proportional income benefit - if after an illness/disabilty your earning capacity is less the PHI can make up the difference.

There are a few more variations - linked claims, hospitalisation etc.

Another issue may be insurabilty, and don't forget you are older now too, so the cover will be more expensive.

As I said a good broker will be able to do a proper comparison (include all insurers) at a reasonable cost.

skippy2

As someone claiming on a PHI Policy read all the small print very carefully to make sure you are happy with it, and then read it again and again. Update the policy every year to reflect your current earnings and change the insured amount payable on disability to reflect this. Social welfare can come into the calculation but as self employed not sure where you stand on this. If making Pension contributions consider having premium protection included. For PHI In payment make sure you are getting a minimum increase every year to keep up its value.
Unfortunately as someone claiming for the rest of my working life it is the most valuable piece of paperwork I ever signed. You never think about it at the time but one day you may need it........so it pays to review it every year................ Hopefully you never need it