Health Insurance

You should be aware of the main types of health insurance available. Most of us would not be comfortable holding thousands of family and holiday photographs on our computer together with all of our letters, emails, finances and other records, without having some form of backup if the hard disk were to fail or the computer were stolen.

To be without any form of health insurance whilst you are working for a living is to be without backup. 

The basic types of health insurance available

Accident and Sickness Insurance

Accident and Sickness Insurance – provides you with a weekly income following an accident or illness that leads to time off work.  Low cost cover for a maximum fixed term, usually one or two years.  Short ‘waiting period’.  Appeals to blue collar occupations.  This is really classed as general insurance and not usually recommended by independent financial advisers (IFAs).

Income Protection Insurance

Income Protection Insurance – provides you with a monthly income following an accident or illness that leads to a fairly long time off work, usually of several months.  The ‘permanent’ insurance option.  Appeals to higher income and professional clients.  The only real solution to a long term disability.  Could be argued to be the highest priority for the majority of clients under retirement age.

For further information see the links below.

Critical Illness Insurance

Critical Illness Insurance – provides you with a lump sum on diagnosis of any one of a number of serious illnesses. The fastest growing health insurance product in the UK.  Most people know someone who has suffered from cancer, a heart attack or a stroke and this is getting across the fact that it could happen to you – where income protection insurance has failed.  Particularly attractive to single people.

For further information see the links below.

Private Medical Insurance

Private Medical Insurance – provides you with financial support to enable you to have private medical treatment without waiting.  Seen by top employees as the health insurance benefit to have. 

For further information see the links below

Long Term Care Insurance

Long Term Care Insurance – provides you with a monthly income to pay for the services of a carer, or residence in a care home once you have failed a number of ‘activities of daily living’.  Insurance companies are no longer offering this (except in its immediate care form) because it was not profitable given the low take-up rate.

Types of health insurance offered as a feature rather than stand-alone plans

Permanent and Total Disability Insurance

Permanent and Total Disability Insurance – provides you with a lump sum on diagnosis of an incurable and very serious disability.  The problem in the event of a claim is getting a doctor to state that there is no hope of your recovery.

Terminal Illness insurance

Terminal Illness Insurance – provides you with a lump sum on diagnosis of a terminal illness.  An increasingly common feature included in term insurance products to bring forward the payment of the sum insured.

 

Important

This information does not constitute personal advice and should not be treated as a substitute for specific advice based on your circumstances.

Information given relating to tax legislation is based on my understanding of legislation and practice currently in force. Whilst I believe my interpretation of current law and practice to be correct in these areas, I cannot be responsible for the effects of any future legislation or any change in interpretation or treatment. In particular you are warned that levels of tax and tax reliefs are subject to alteration and, in any case, the value of such reliefs and benefits may depend on an individual’s circumstances.

If you are in any doubt as to whether any course of action is suitable for you, then you should discuss the matter with a suitably qualified independent financial adviser or other specialist.