The term permanent health insurance is used in the UK but is often referred to as income protection. In general terms critical illness protection offers a lump sum payout if a patient is diagnosed as suffering from a serious illness. Whereas this is most welcome the money will bring some financial compensation to assist with recuperation. However if the illness is sufficiently serious to prevent a return to employment then the benefit payable would have to last a long time.

This is probably not the best solution on its own but critical illness should be taken out with some kind of income protection. It can be as a rider to a critical illness or life insurance policy or a stand alone policy.

The main attributes to this important coverage is that you can protect your income in the event that an illness precludes you from carrying out your occupation. This can mean that an employer will cease paying your monthly salary which may then cause financial hardship in addition to the trauma of recovering from a serious illness. Income protection brings total peace of mind.

Normally coverage is up to 75% of normal monthly salary to ensure that your regular bills are paid and have money to live on. There is generally a waiting period of between one month and six months before the benefit is paid. (The waiting period would normally depend on your company’s sickness policy).

Once benefit starts then it can be paid up to the age of 65 if you are totally incapacitated and unable to return to work. If you are able to do some work but not your normal occupation then the benefit would still be paid but at a reduced level to take into account any income you were earning.

This is a vital element in protection insurance and is a reasonable cost.

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