Healthcare costs are increasing rapidly along with monthly living expenses. It is prudent for any individual or family to have a good solid healthcare coverage coupled with some form of income protection. Even if you are healthy now, you cannot predict when you or a family member will fall ill and you will no longer have the income to pay your bills.
Healthcare insurance basically covers the costs associated with an illness. However, some coverages go further to cover income lost or reduced due to an illness. This provides piece of mind for you and your loved ones, if the main income earner in your family should fall ill.
One such cover is permanent health insurance, also known as PHI or income protection insurance. The idea is that should you suffer from or have an illness that keeps you from working or significantly lowers your income, the coverage will kick in. The insurance pay-outs are tax-free and are normally made on a monthly basis. They can be used to pay mortgage payments, bills, tuition and other necessary living expenses. The last thing you want to worry about when you are sick is whether your family will be able to pay their bills or not.
Permanent healthcare insurance is a very comprehensive cover, especially compared to critical illness cover, which only insures you against a predetermined list of illnesses. Virtually every illness is covered by a PHI policy, with HIV/AIDS being a notable exception, as well as pre-existing conditions. All you require is a declaration from your doctor stating that you are unfit to work and the plan begins to pay out. It will continue to pay out until you recover, die or reach the policy termination age – normally 65, which is retirement age.
However, even among permanent healthcare insurance policies there are variations and it makes sense to shop around and compare benefits. Some policies will only make a pay-out if you are unable to undertake any kind of job. Others will continue paying out benefits, even after you are able to return to work, if the new job pays less than your previous one. Some policies will also cover rehabilitation costs or even re-training costs, if you are unable to do the same job after your illness.