Health Insurance

What is Health Insurance?

The insurance industry is full of jargon, so the following are some commonly used terms to describe the types of health insurance products that are available.

Whilst the Financial Services Authority (FSA) distinguish the various health insurance policies available between Pure Protection and General Insurance, the definitions used here are as those determined by the CII (Chartered Insurance Institute).

Generally health insurance is a way of mitigating or reducing the financial effects of an adverse life event relating to you, your partner’s or family’s physical well being. 

An adverse life event covered by health insurance is typically accident and sickness, critical illness or terminal illness. Death is a terminal life event covered by Life Assurance policies such as Term Assurance and Whole of Life policies.

Depending on the type of health insurance policy taken out by you or on your behalf, a payment will be made either as a lump sum or regular payments to the beneficiaries of the policy in the event of a claim being made.

What are the types of Health Insurance?

The following are the types of health insurance available:-

·        Income Protection Insurance (IPI) also known as Permanent Health Insurance (PHI) pays out a regular income in event of illness or disability preventing you from working.

·        Critical Illness Cover (CIC) pays out a lump sum on the diagnosis of a specified serious illness. Unlike Terminal Illness where death is certain, it is possible to recover from a critical illness.

·        Terminal Illness Cover (TIC) is usually included as a free addition to General Protection Insurance Policies Term or Whole of Life policies. It pays out a lump sum on the diagnosis of a rapidly progressing or incurable terminal illness where death is certain.

·        Long Term Care Insurance (LTCI) provides funds to pay for the costs of long term care due to old age or long term illness, which typically cover medical expenses, domestic help and nursing home care.

Why should I take out Health Insurance?

There are a number of factors about an individual’s personal circumstances that will determine which of the types of health insurance that may be applicable are based on their suitability and affordability.

However there are currently a limited number of state benefits and allowances that are also available that must be considered before entering into an insurance contract.

How should I take out Health Insurance?

The first and most important step after you have decided you may have a need for health insurance cover is to have a discussion with us to provide you with independent financial advice.

Once we have agreed what the most suitable type of health insurance cover is for your particular circumstances we make an application on your behalf to take out a protection policy based on how much you can afford and the amount of cover required, for a length of time to match your needs.

Want to know more?

Talk to one of our qualified financial advisers on 01553 777600 or e-mail us at enquiries@ringassociates.co.uk

Also you may want to read the articles by accessing the following Association of

British Insurers website http://www.abi.org.uk/Display/File/Child/855/ABI_Health_Ins.pdf

the Directgov website at http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingMoney/Insurance/index.htm?cids=Google_PPC&cre=Money

and the Financial Service Authority (FSA) consumer guide available on their website at http://www.moneymadeclear.fsa.gov.uk/products/insurance/types_of_insurance.html