Our definitions explained...

Accident

A unexpected occurrence causing you bodily injury. Your injury can be assessed in many differing ways dependant on your cover. Do you qualify for capitol benefits or a replacement income? For the later you will have too be unable able to work for a deferred or qualifying period before benefit is triggered.

Income

Income replacement benefit is designed to pay you a regular income in the event of being unable to work. Due to current Inland Revenue restrictions, you can only insure part of your income - 50% in most circumstances.

Remember, benefits are normally paid as a tax free income and in addition to any qualifying state benefits or compensation payments.

Lump Sum Benefits

Some policies pay a lump sum benefit upon accidental injury or death. These policies are often designed to cover capitol benefits only, and work out very cost effective. Common benefit areas are loss of sight in one or both eyes, loss of limbs and even digits; ideally suited to those in more hazardous occupations such as saw mills and metal work.

Capitol Benefits

These are serious injury benefits such as loosing a thumb, hand, arm or leg. Also damage to your eyes are often covered. Additionally, most policies will pay for accidental death and/or total disability. Less serious accidents such as broken bones (even if they cause long to medium term disability) would not be covered under such a plan.

Capitol benefit schemes will pay a tax-free lump sum upon presentation of eligible claim, they do not provide any form of income.

Occupation

If you work in a specialised occupation you should check with your adviser whether you would be expected to work in any occupation, any suited occupation or work-task specific. This can make a big difference in some cases - more so with longer-term incapacity claims.

Illness

If you have an Accident Only policy you would not be able to claim for any conditions caused by illness or disease. It is important if you are self-employed or lacking employer support to have adequate insurance in place.

Rather than buy the first policy that looks attractive, we recommend that you speak to an adviser to ensure that the policy you take is able to meet your benefit requirements.

Unemployment

Some policies will also cover unemployment or redundancy as a benefit. You must ensure that you are familiar with the terms of these policies as many have qualifying periods and you must not have known about or volunteered for redundancy.

You should speak to your adviser if you are in any way unsure.

Motorcycle Cover

This policy is specifically designed with motorcyclists in mind. It is aimed at non-professional riders and does not cover any competitive sports. However it is ideally suited to anyone who rides a motorcycle or takes part in motorcycle activities.

[click here to buy on line]

Amateur Sports Cover

A special policy aimed a non-professional sports players... enjoy going to the gym, playing football, squash or martial arts - then this plan is ideally suited to your needs. Benefits for sports injuries, broken bones and even hospitalisation... If you are a professional sports player - we recommend you first consult you professional sports association for advice on special schemes.

[click here to buy on line]

Period of insurance

Most policies are designed to pay or cover a limited period. Your policy will only pay eligible claims so long as you have paid your premium. Some policies become void once a claim has been presented, speak to your adviser if you are looking at a long-term or short-term policy as some may be more limited than you require.

Most policies are sold on an annual contract basis, this means each year you will be invited to renew your plan, adjust your cover and premium if necessary.

Long-term disability

If you require long-term peace of mind such as 'permanent and total disability cover', speak to your adviser as you might benefit from having two policies working side-by-side.  Accident, sickness and unemployment cover normally only pays for one or possibly two years, if a condition stops you from returning to work beyond this point, you would need to consider permanent health insurance.

Income Replacement

By the nature of their name, this policy provides you will with a replacement income from as little as one year or to retirement - dependant on your needs.

If you run your own business or are self-employed, income replacement cover is a must have as state benefits are designed to provide only basic standards. Speak to an adviser or your financial adviser regarding these matters.

Schemes can also easily be set up as an employee benefit to protect key staff against unexpected illness or injury stopping them working.

Company Paid Benefits

All forms of health insurance are available in company schemes; allowing the employer to build a benefit structure pertinent to their nature of business. Most schemes are classified as benefit in kind; this means the company pays the premium on behalf of the members, the cost of their benefit is counted as income and therefore they only pay tax on the cost of the cover...

Such schemes are also an excellent way of protecting the interests of the business against the unexpected loss of a key team member. Benefits can be used to employ locum cover, agency staff or simply the cost of replacing a member of staff. As tax is paid on the premium paid to the insurer - benefits are classified as tax-free unless linked with PAYE and pension cover.

P11d - Taxation issues

As health insurance is seen as an employee benefit in kind, it is classified as a P11d benefit. This means that in addition to an employee’s income, you must inform the inland revenue the premium value of the benefit provided. The employee pays tax on this cost and it is classified as an income.

Company paid benefits are by far the most cost effective way of buying health insurance. Speak to an adviser about which benefit package might suit you the best...

Personal Accident or Permanent Health Insurance.