Personal accident and sickness insurance;
- pays out, term, covers (4), expenses, deferred, max payable, group and restricted, taxation and expenses
Pays out if off work due to illness or sickness
- usually short terms contract (1 year or less)
- covers death, disablement, loss of limb and other specified injuries
- medically expenses usually refunded up to specific percentage
- weekly sickness benefit paid after short deferred period (4 weeks)
- max number of weeks payable such as 26,52 or 104.
- can have group PAS and may be restricted to specific activity e.g. spec sport
- no tax relief or taxation on benefits received
- cost for business is allowable as expense
Private Medical Insurance;
- indemnity, aimed at what type of conditions, initial diagnosis and uk resident
Need for PMI;
- NHS time and waiting, restriction, speed and quality, convenience, infection, expectation
- indemnity policy meaning can only claim back the costs they have incurred
- PMI aimed at acute conditions (rapid onset and can be cured, treatment normally short duration)
- initial diagnosis can be covered but not designed for ongoing chronic cond
- restricted to UK residents and don’t provide cover abroad
Need for PMI;
- NHS not good a timely treatment of acute conditions
- usually long waiting lists for treatment
- some common treatments restricted
- private service can lead to operations being done quicker and better quality of service
- private more convenient in terms of time and place
- risk of infection lower
- NHS provide standard level of provision which may not meet expectations of all patients
PMI - basic plans;
- excess, restricted to costs of(4), limits, discounts and better for
Standard plan;
- cost but gives (5), limited (3), psychiatric and budget
Basic plans
- premiums reduced if client pays first part of the claim
- cover restricted to costs of accommodation, drugs, dressings and doctors fees
- may be limits on cost of treatment covered in a year
- some plans can offer discount if remain healthy
- better for those with smaller budgets
Standard plans;
- cost more than above but give wider range of cover, claim periods, higher limits, wider choice of hospitals and outpatient treatment included
- consultant fees, diagnostic tests and other services are limited
- psychiatric cover can be included
- appeal to those larger budget but cant extend to comprehensive cover
PMI - comprehensive plans - cost and cover, what you get (5) and can also cover
Excess - what is it
Co-payment -what is it and also known as
Comprehensive plans;
- most costly but fullest cover
- claim periods longer, higher limits, better choice of hospitals and can offer nursing home + private ambulance
- covers parent staying at home with child
Excess;
- many policies have excess where insured pays first £x of any treatment
Co-payment;
- insured pays part of the cost of treatment up to a certain limit. Also known as shared responsibility.
PMI - exclusions (15)
- drug and alcohol abuse
- chronic long term illnesses
- rehab for more than a specified number of days
- cosmetic surgery
- HIV
- kidney dialysis
- self-inflicted
- pregnancy
- organ transplants
- sleep apnea
- genderconfirmation
- routine check-ups
- war
- dangerous sports
- treatment abroad (unless specialist)
PMI - basis of cover;
- on what basis (4), group schemes proportion and benefits, income tax, NICs and business expense
Claims;
- how do they start, specialist teams, evidence, payment made to and taxation
Underwriting;
- full or how and reduced when
- can be on single, joint, single or family basis
- high prop of market is set up as group schemes and they are lower premiums, reduced underwriting
- if employer pays premiums, employees are subject to income tax on them as benefit in kind
- also subject to employers NICs but premiums are deductible business expense
Claims;
- always start with referall from GP or emergency admission to hospital
- insurers can have specialist teams that consult the insured before treatment
- insured must provide evidence of medical needs and costs
- payment made directly to doctor
- claim payments are tax free and no tax relief on premiums (employer only)
Underwriting;
- can be fully underwritten or moratorium basis
- reduced underwriting if switching from other PMI policy
Mortgage PPI - payable for how long (3), max ben (3), taxation, cost, pays out when and tied
People take out because;
- mortgage, state bens, time period, covers what compared to other cover and availability
- bens only payable up to 12, 18 or 24 months only
- max ben limited to % of salary, fixed amount or mortgage costs
- bens not taxable
- cost high compared to level of benefit
- pays out on sickness, accident or disability or involuntary unemployment
- not tied to specific mortgage
People take out because;
- mortgage most important regular bill
- state bens will only cover mortgage payments in limited circumstances
- do not expect financial problem to last more than a few months
- MPPI covers unemployment not like IP or CIC
- readily available due to limited underwriting
MPPI - typical terms and conditions - age, excluded, employment, redundancies, away, deferred, liquidation, income and cancellation and amendment
Eligibility;
- residence, age and employment
- 18-64
- pre existing medical conditions excluded
- must be currently employed or self-employed for at least 16 hours a week
- must not be aware of forthcoming redundancies
- cant be away from work for any reason
- usually deferred period of 30-60 days
- self-employed can benefit if gone into involuntary liquidation
- any income from other sources will affect how much can be claimed
- policy can be cancelled or withdrawn at min 90 days notice or amended with at least 30 days
Eligibility;
- mortgages of residence in UK, channel or Isle of Man
- permanent residents of the UK
- under 65
- employed or self-employed
ASU - how different to MPPI, ben payable, max, deferred, ben limit (2), lump sum, group, taxation on bens and premiums and if employer pays prems how taxed and expenses
- Similar to MPPI but not restricted to mortgage
- monthly or weekly ben payable if unable to work due to ASU
- payable max two years
- 30-60 deferred period
- ben limited to set % or max monthly amount
- can give lump sum bens
- can be offered as group scheme
- bens not taxed and premiums don’t get tax relief
- if employer pays, prem payments are subject to income tax but allowable as an expense
Health cash plans and dental plans - what are they, pay what, waiting period and how paid
Dental plans - covers what (3), requires before opening, max and how sold (3)
Health cash plans
- low cost healthcare plans that can pay up to 100% of the cost of treatment up to pre set limit or specific treatments e.g. glasses
- can pay fixed cash sum for each day in hospital
- often waiting period of six months before claim made
- give patients money to held pay for medical care as opposed to providing full indemnity costs
Dental plans;
- covers usual check ups, fillings etc and dental accidents and emergencies
- usually requires dental examination before opening policy to ascertain if any work is needed in a years time
- many plans offer max benefit below charge made by dentist
- can be sold as add on to PMI, employee benefits package or stand-alone
Adviser considerations;
Long term pols - provide what and considered when, what do long term pols cover (IP & CIC) and drawbacks compared to short term (2)
Short term pols - advantages (2), used for and suits who and drawbacks (2)
PMI considerations;
- cover, excess, underwriting and travel
Long term policies such as IP & CIC provide more comprehensive cover and should be considered as first option. IP protects income until retirement whilst CIC can ensure decent lump sum at time needed most. However, they do have extensive underwriting and are much costlier.
Short-term pols have quick and easy application process and cost lower. Can be used to protect against periods of unemployment and suit those for short term needs. However, short term means that cover is cancelled and premiums may increase at renewal date.
PMI considerations;
- level of cover - budget, standard or comprehensive
- level of excess - greater excess, cheaper the plan
- basis of underwriting - full underwriting may take longer but can use Moro
- travel plans - if residing abroad, should use international policy
