INSURANCE

Private medical insurance (PMI)

With NHS hospital queues still burgeoning private medical insurance is an appealing though often expensive buy.

And what you pay for is what you get. Premiums are worked out on the basis of age and the type of cover required. And there is a wide range of different insurances to choose from.

At the basic level PMI clicks in when you need specialist treatment or you need to go into hospital. Some policies cover you if the NHS cannot provide treatment within a certain period of time.

At the luxury end of the market there are policies that cover a wide range of medical services such as dentistry, eye care and even spectacles although the more a policy covers the higher the premium will be.

PMI is complicated for those approaching it for the first time. In order to make sure the policy you choose is the right one to meet your needs it is worth speaking to an adviser who has specialist knowledge in medical policies and can guide you through the maze of different offerings on the market.

Permanent health insurance (PHI)

Permanent health insurance is designed to give you a regular tax free monthly income if you are unable to work permanently due to illness or injury. Statutory Sick Pay is commonly paid by your employer for up to 28 weeks, but is unlikely to provide adequate income in the event of serious illness and some employers will not offer statutory sick pay at all.

The premium cost will depend on the extent of the illnesses covered, the age of the policyholder and period of time that elapses between when the insured becomes ill and when a claim is made.

There is considerable choice between different covers offered by different insurers. The key is to choose a balance between the cover you need versus the cost of premium. A financial adviser with knowledge of the permanent health market can help you select the appropriate policy for you. If you are fortunate enough never to have to make a claim under your policy you may have some regrets at a later date but many people have been very grateful indeed that amongst all the other worries they had when they became unable to work they knew they did not have to think about how they were going to meet domestic bills and keep a roof over their head until they recovered.

Long-term care

We tend not to think about how to pay for long term care until one of our relatives has to go into a residential or nursing home.

Average residential care home costs are actually around £20,000 per annum (£383 per week) average nursing home costs are £36,000per annum(£692per week), with many in the South costing as much as £50,000 per annum (£961 per week)

This is why long-term care can form part of your discussion with your financial adviser. Especially so as there is a chance that long term care premium costs may become tax deductible in the future. There is no doubt however that the need for care is likely to increase as life expectancy continues to rise and with only limited care facilities available the costs are bound to rise.