The cost of PHI

Staples

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My wife, who's self-employed recently got a quote for PHI - €192 a month for an annual income cover of €30,000 per year paid to age 60 (about 20 years).

This seems high but is it the norm?

Any advice appreciated.
 
The quote is respect of a guraanteed premium with a deferred period of 13 weeks. She has no medical issues that might affect her policy and is a non-smoker.
 
PHI becomes more expensive, the later in life you take it out. Also, women are more prone to diseases that disable, than kill, before retirement. ( Men more likely to drop dead of a heart attack).
Dont be tempted to lie to bring the cost down, it could nullify the policy.
 
Women claim more and for longer. Premiums used to be 50% more for the fair sex.
 
Thanks for the replies.

I don't think there's anything to lie about even if she felt like it. There's nothing in her medical history that adds to the premium while lying about her age would only cause future complications.

I can see the virtues of PHI, particularly for self-employed, but not necessarily the value at €192 a month. It seems off-the-scale, and therefore poor value, to me.

Investing this amount in a savings plan that would generate a future lump sum (albeit in the more distant future) might seem a more productive alternative, taking into account the risk of a more immediate illness.

Am I wrong in this assessment?
 
You would be if she became ill long term in the 1st few years.

Consider reducing sum assured to say 50% of slary and increasing the deferred period (during which no benefit is payable) to 26 or even 52 weeks.
 
Don't forget there is tax relief available too. Price is also dependent on occupation class, office jobs being class 1 and builders class 4 (probably no cover).
 
Would the absence of "escalation and indexation" simply mean that the income protected (e.g. 20K) would remain the same in monetary terms for the entire duration of the cover or is something else implied?

Our main concern would be to ensure an income that covers the mortgage for the next 18 years. As this will remain constant in monetary terms (save for any increases/reductions in interest rates), a guaranteed income that wouldn't increase would suffice.

Thanks again for the illuminating replies.
 
With this kind of insurance you really are insuring for a calamity.

I would agree that it makes more sense to go with the after 26 week option. There are only 3 insurers in ireland I think providing this cover
See can it be extended to age 65 ,should cost about 100/month after tax. This is not bad value I think
 
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