Category: Sickness absence and disability · Reviewed by Taylor Watts, Broker · New Business · Last reviewed 2026-06-10
Permanent Health Insurance (PHI) is the historical UK insurance market term for what is now universally called “income protection” insurance. “Permanent” referred to the insurer’s commitment to renew the policy regardless of the insured’s health changes; “Health” referred to the underlying peril (sickness or injury, rather than death). The term has been largely retired in favour of “income protection” or, in the group context, “group income protection” — but some legacy policy wordings still use the older name.
Category: Sickness absence and disability Also known as: PHI Modern term: Income protection Related concepts: Group income protection, Group IP definitions
The renaming reflected an effort to communicate more clearly the purpose of the cover. Consumers and HR teams understood “income protection” more readily than “permanent health insurance”. The product itself is unchanged in essence: insurance against the loss of earnings caused by long-term sickness or injury.
Tax treatment under ITEPA 2003 historically distinguished PHI and IP, but the modern treatment is uniform. The Association of British Insurers and the Income Protection Task Force adopted the current “income protection” terminology in the early 2000s; ABI consumer-facing communications now use IP exclusively.
Legacy PHI policies should be reviewed on renewal — the modern equivalent (group income protection) typically offers better rehabilitation, more flexible definitions and lower charges.
A long-standing client maintains a “PHI scheme” originally established in the 1980s. The broker reviews the cover at renewal and recommends migration to a modern group income protection contract with own-occupation definition and integrated rehabilitation — at lower premium and broader cover.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-10. Next review: 2026-12-10.
Apex Insurance Brokers Limited. Authorised and regulated by the Financial Conduct Authority, FRN 724952. Registered in England and Wales, Companies House 07014570. This entry provides general information about UK insurance concepts and is not regulated advice. Consult your insurance broker on your specific position.
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