The Three Pillars of Income Protection Insurance

Published / Last Updated on 05/05/2022

Income protection insurance, sometimes known as permanent health insurance (PHI), is what is say’s on the label, it is insuring and protecting your income.  If you are unable to work due to injury or illness, can you really afford to live and pay all your bills if on Statutory Sick Pay or universal credit benefits?  The answer for most of us would be no.

Income protection insurance is perhaps the least used and talked about insurance yet is one of the most important.  You insure you home, you insure your car, you buy travel insurance yet if you lost your income, your home, car or holiday are all at risk.  We all need income protection insurance.

From an underwriting perspective, it is perhaps wise to understand what some call the “three strikes and you are out” or as we call it, the Three Pillars of Income Protection:

Pillar 1 – Health

Underwriters will want to know about your health and medical history.  This will have a huge influence on whether you will be accepted for cover or not and what premiums will be charged.  Apart from ongoing medical conditions that may lead to taking time off work, underwriters will also be looking for knee, shoulder, hip or back problems that may easily lead people to not being able to work.  If you have two or more medical conditions, expect exclusions or needing to use a specialist insurer.

Pillar 2 – Hobbies, Interests and Pastimes

If your hobby is potholing, sky diving or white-water canoeing, you can guess what an underwriter will be worried about.  Sporting injuries and again a history of knee, shoulder, hip or back problems will alert underwriters.  Again, expect exclusions or needing a specialist insurer.

Pillar 3 – Occupation

Much in the same way as hobbies and interests, if you are a steeplejack or a deep-sea oil rig diver, you may expect refusal or terms.  That said, the use of specialist insurers will be required for many occupations.  We even secured income protection insurance for an armed forces employee entering a war zone, so everything is possible.

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