# Do they ever pay out on serious illness cover?



## jgently (26 Apr 2006)

Hi there,
 My employer has one of those Life Assurance & Serious Illness policies for all employees. It seems similar to ones that a lot of companies have. It pays out 4 times your salary on death and for serious illness it pays full salary for 6 months and then 50% thereafter if you never return to work. Fairly standard stuff.

 I got a brain tumor about 3 years ago and was off work completely for about 4 months and then went back to work gradually, starting at a few half days and eventually up to a 3-day week. I even tried 4 days for a short spell but it was too much. There's no funny business here and any medical backup for the insurance provider is not a problem. 

 Does anyone know if I am entitled to 50% of the days that I can no longer work? I would have thought so but my company HR department thinks not.

 Also, as an outside bet, is there any compensation due in this case for lack of career development (my position within the company & salary have both suffered, on top of the cut for doing less hours).

 Thanks a million for any advice

 J.


----------



## Ravima (26 Apr 2006)

these policies cause most queries with ombudsman and arbitrators. the wording of the policy is very important. Does the policy pay ou if you cannot continue work IN YOUR CURRENT POSITION or does it only pay out if  you cannot work AT ANYTHING again?

Try approaching via HR or your union. They should be able to help


----------



## Resident (27 Apr 2006)

I'm not sure this is a serious illness policy. 
I thought serious illness policies paid out a lump sum (upon diagnosis) (or for Permanent Total Disability policies, once disability established as permanent not temporary). 

This sounds more like a PHI(Permanent Health Insurance) policy, or an accident policy, I'm not sure as generally PHI has a deferred period eg 13-52 weeks which you don't mention, with this you get paid until retirement/can work again/fit to work again. The two types are own occupation or any occupation.

I mention the accident policy as generally the deferred period is low, a day to a week. but payments generally are short term eg a year or two. 

This is why i thought maybe the company had a mix, ie to cover you short and long term.

of course there could be some other kind of policy here, I'm not in the profession and the above is just previous personal research, so I'd say find out your policy type first, because it doesnt sound like serious illness policies I've come across, also if it is PHI I'm not sure how you trying to go back to work will affect things. It may be that if you have an own occupation PHI policy and can manage two days a week, they'll pay you a % .....

sorry cant be more help.


----------



## F. Kruger (27 Apr 2006)

It sounds like a PHI policy and it may have what is called a 'Rehabilitation' or 'Proportionate' benefit. This would entitle you to whatever shortfall that you may have taken in salary as a result of your illness.

Ask for the policy document or terms and conditions and look for the terms above ie 'Rehabilitation or Proportionate'


----------



## orka (27 Apr 2006)

And just to respond to your second query, I'm pretty sure that no policy provides cover for loss of future career development - it would be too difficult to price, manage, police - not intending to be harsh to you at all but the policies deliberately provide less than a claimant was getting pre-illness so that there is no disincentive to return to work - anticipating future career progression could mean someone was better off off work than in work.


----------



## CathyK (8 May 2006)

Hello,

This does sound like a PHI policy, you should ask your HR department for a copy of the policy as it really depends on who the policy is with re the returning to work bit, however there is no policy out there that will cover for future career developements or lack of, as this would be impossable to price

www.keatingfinancial.com


----------



## marshal (9 Jun 2006)

Unfortunately I have had a condition that I believed was covered by serious illness cover on a mortgage and again it was one that should pay out on diagnosis. I was fortunate that I had time to sort out the claim before my surgery, or so I thought. My experience was not good, my downtime was similar to that of the original poster, however dealing with the insurer was awful. Despite being promised that we'd be dealt with promptly, it took 5 or 6 weeks even to get the first response (not even a decision). The diagnosis was never questioned. In the end the claim was denied, after a long time - I felt that we handled it well but that in other circumstnaces this delay and hassle would have been an unbearable burden. As outlined by others we went through the finance ombusdman - but as I expected, the insurer was legally entitled to deny the claim (even with numerous typographical and medical errors in their policy). I'm very dubious about this type of insurance - the consumer has little chance of winning here. As far as we could figure most of the conditions covered were so bad that the insurer would probably have to pay out life insurance anyway in many cases. However, health is one area where you never know what can happen so we've retained the insurance - for the few cases where it might apply. Read the policy very carefully before signing up - but as i said, how can you predict what will happen. I did share a ward with some very sick people, whose conditions would also have been excluded on initial diagnosis - maybe they would have been covered as they deteriorated. Not very satisfactory from their loved ones point of view.


----------



## kramer2006 (4 Sep 2006)

PHI products attract tax relief (if you're self-employed) but do they offer good value for money? I've always been told that PHI policies are notoriously difficult to make a successful claim on.

When I was looking into setting up a company pension, I considered PHI as an added benefit, but I decided against it after looking at the "small-print". 

For example:
- it's not enough to lose one arm; you need to lose BOTH arms
- it's not enough to be diagnosed with Parkinsons Disease, you need to be permanently incapacitated and requirement full-time assistance.

These are conditions you don't see on life company's promotional literature. They're contained in the "Terms and Conditions" form you sign just before you agree to start handing your money over. Also, tax relief or not, these products are quite expensive.

Serious illness (which cover your mortgage) always struck me as better value than PHI; in the event of an illness, at least you don't have your home covered.

Does anyone have any experiences with serious illness or income protection products?

Kramer.


----------



## RS2K (4 Sep 2006)

kramer2006 said:


> PHI products attract tax relief (if you're self-employed) but do they offer good value for money? I've always been told that PHI policies are notoriously difficult to make a successful claim on.
> 
> When I was looking into setting up a company pension, I considered PHI as an added benefit, but I decided against it after looking at the "small-print".
> 
> ...




I think you are confusing PHI and Personal Accident insurance. They are 2 very different animals.

PHI is a good idea. You insure your income. Premiums are tax deductable. Getting cover is tricky as the sums assured can be huge and underwriting can be tough therefore.

I've seen a few long term claims, all handled fairly.

Critical illness cover isn't always great. If you have a heart attack and die, the sum assured is not paid out. Minimum "survival periods" apply. A lump sum is ok, but with low interest rates it's buying power is limited.

As in all these areas good advice is paramount.


----------



## RS2K (4 Sep 2006)

To answer the op's question however, some form of proportionate benefit is normal in those circumstances. Ask again.


----------

