Question:

What is PHI and why is it relevant?

Permanent health insurance (PHI), also known as long-term disability insurance pays a monthly amount if you are unable to work because of an illness or disability.

It continues paying until you recover and go back to work, or until you die or reach the policy termination age, usually 60. The most you can insure is usually 60% of your gross income. Some policies return some money at the end of the policy term depending on the profitability thereof.

The terms of your policy will depend on how much cover you want, on your sex (women generally pay more) and on how long you are willing to wait between being unable to work and receiving some payment (deferred or waiting period).

The longer you will wait, the less you are likely to pay for the policy cover. Your job also influences how much you will have to pay, with white-collar workers generally paying less. Your general health and medical history may also effect your premiums.

Going through an illness or accident that renders you unable to work is hard enough without also being unsure how you will be able to fund your lifestyle and pay for treatment required (if any). Savings can only keep you going for a certain time and after a point you may find that you either need to claim benefits from the state or request help from family and friends. Matters are made even worse if you yourself have a family to support.