Permanent Health Insurance (PHI)

I apologise to my overseas readers, as this post only relates to the UK.  However, it is vitally important so I do need to raise the issue.

I took out a Permanent Health Insurance policy (PHI) in 1992.  I took it out through a registered insurance broker as my local government employers didn’t offer PHI policies.  PHI offers a partial income if you ever become too unwell to work.  Thank God I had one, because when I did become too ill to work the weekly state sickness benefit was £54 which didn’t even cover my mortgage (I wasn’t entitled to housing benefit, which is only given to people who rent their homes for reasons I don’t understand).  The PHI ended when I reached 60 because that was the retirement age for women in 1992.  All PHI policies end at 60 for women or 65 for men because it is an insurance for working age people to cover loss of earnings (you can choose for the policy to cease before that age, but not after it).

Fast forward to 2011.  The Government, in their wisdom, raised the retirement age for women from 60 to 67.  If I’d had a PHI policy through my employer, and was still employed, my insurance would simply have increased its term to reflect the new retirement age.  However, I am not employed.  I am claiming on my policy.  And my insurers flat out refuse to increase the term, which means I’m going to have 7 years with no income between the age of 60 and 67.  Blatant discrimination being shown between healthy working people and sick, non-working people.

I took the issue up with my insurers who told me to basically get stuffed.  I can’t blame them.  It’s not their fault the government has changed the goal posts, and if they need to pay my insurance for another 7 years it’s going to cost them tens of thousands of pounds.  Multiply this by every other claimant on their books and we’re talking serious cash.

I contacted HM Treasury, in charge of regulating the insurance industry.  Their reply was that if I felt my policy had been mis-sold I should take it up with the Financial Ombudsman.  I kind’ve wanted to scream.  My policy had not been mis-sold and had been fine, thank you very much, until the Government raise the retirement age and put the kibosh on it.

Next, I got my MP involved who wrote to HM Treasury on my behalf.  He received the same reply about mis-selling as I did.  I told him it was unacceptable and he is currently trying again.

In the meantime, I contacted the Financial Conduct Authority who regulates the conduct of the insurance industry.  I received a reply saying that if I’m unhappy with my policy I should take the matter up with the Financial Ombudsman.  They missed the point of my correspondence entirely.  Arrrghhhhhhhh!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The point of this post is to forewarn anyone in the UK with a PHI policy taken out pre-2011 to look at the terms.  If it ends at 60 leave me a brief message on here and I’ll email you.  If I get enough people I’m thinking of setting up a Facebook group and tackling the authorities on it.  But I can’t do it alone.  PLEASE PLEASE share this post on any platform you can, no matter what the illness, whether sick or well.  Anyone with a PHI policy taken out pre-2011 needs to check it because you’ll probably find it ends when you’re 60 and has not been extended to the new retirement age of 67.  If you (or a spouse) took out a policy pre-2011 and it HAS been extended to the new retirement age of 67 I also need to hear from you, particularly if you are still employed!  I need to be able to show that people are being treated differently in order to prove discrimination.



11 thoughts on “Permanent Health Insurance (PHI)

  1. naturallymum

    I used to work with insurance and had an issue myself that I had to deal with in this kind of way. Have you tried witing to the insurance company and threatening to go to the ombudsman, the simple threat might do the job if you have any leg to stand on. Don’t worry about whether it was mis sold, emphasise the unfairness of the policy and how you rely upon it in good faith and they might they alter it for you. If that fails the ombudsman may well take your side on it anyway.



    1. Jak Post author

      Thanks C. I wish it were that simple though. After 17 years of claiming my insurers decided they wanted to stop paying me, so I took it to the FO. The case took 2½ years to sort out and the stress was phenomenal. I did win but my insuruers tried everything to get rid of me.

      This issue with the pension age is much bigger than just me. I can’t believe the complacency of policy holders not even checking or doing anything about the situation! After chatting with me my neighbour, who is healthy and working, has now realized her PHI still ends at 60 yet she will be working til she’s 67 and is going to look in to it. It’s a problem on a massive national scale that the insurance co and the government are trying to just quietly sweep under the carpet.


  2. kneillbc

    Jak, just so you know, it isnt just the UK. We are having similar issues here. The government’s ‘official’ retirement age has gone up by five years- overnight. The fact that it wasnt implemented gradually and thoughtfully has caused all sorts of issues. They did it to hide the fact that they have been mis-managing pension funds for years- not investing them properly, under-contributing, etc etc. It doesnt affect me, as my long term disability insurance language is based on ‘retirement age’ rather than ’60’ or ’65’. As well, it’s is provided through my former employer, so they will either be paying me out of LTD, or Retirement pension- they own both funds, so it doesn’t make that much difference to them.
    I do hope you get it sorted out- it is massively descriminatory.

    Liked by 1 person

  3. Patricia Graham

    I was really interested to come across your blog and find another woman who has PHI and feels it’s unfair we’re being ‘abandoned’ at age 60 when the state pension age for women has risen so quickly and dramatically for us. I took out my PHI policy in 1989 after being told about it by the IFA who arranged my (first) mortgage. It was set up until my state pension age, which was 60 at the time. I turned 60 in 2015, but before doing so I asked (rather niaively, thinking about it) if they would extend it to my new state retirement age of 66. I was told ‘no’ the policy expires at 60 and that’s it. Although the policy has now expired, I never claimed on it and never missed a payment. I realise your situation is much worse than mine as you rely on it paying out, however, I do feel just as keenly the unfairness of the situation compared to a man the same age with a similar policy whose maturity date is set to 65. If I were to arrange new cover now I would have to pay a much higher premium and would have to declare any illnesses I’ve had since the original health declaration. It simply isn’t fair. I live on my own and have only my own work income. For me, now, it’s a case of crossing my fingers for good health until retirement. I wrote to Roz Altman about it last year (2015) when she was the older workers’ champion (before she became the pensions minister). Although she was quite sympathetic and felt it was unacceptable she said there was nothing she could do. She suggested I write to my MP. I’ve yet to do that but feel spurred on my your blog to do so! I’d be really interested to know if you’ve made any progress with getting up a campaign/Facebook page about this. I don’t ‘do’ Facebook but would be willing to find out about using it for this. Please don’t hesitate to contact me. Kind regards. Patricia Graham


    1. Jak Post author

      Hi Patricia

      You are only the 2nd person to contact me despite extensive ‘advertising’ of the situation on social media! No-one seems to care, even if they have a PHI policy – when you’re well you don’t really think you’ll ever get sick or need your policy.

      I have involved my MP and got nowhere. He wrote to HM Treasury twice and they just replied “if your constituent thinks she was mis-sold her policy she needs to take it up with the financial ombudsman” which wasn’t the bloody issue at all!!

      The Ombudsman don’t take on these kinds of cases!

      I also wrote to the Financial Conduct authority, who police the Insurance industry, and they don’t take on “person cases”, even though I explained it affects everyone in the country with a PHI policy.

      No-one wants to tackle this issue and my MP has washed his hands.

      I don’t know where to turn now and am in despair as to how to proceed.



    2. Jak Post author

      p.s. I did come across an article in the Candis magazine in December which mentions an organization called “women against state pension inequality” so will look into them when I have some time.


  4. Roo

    Hi. What an ordeal for you. I claim PHI through my old employer. I only have the staff handbook I had when I became ill in 1998 which states that it ends at age 60. I’m not entitled to the work pension as I had to be there for two years to qualify. Until I came across your post I naively thought that as the reitrement age rose the cut of date would to.


    1. Jak Post author

      Hi Roo. If you are still classed as employed, if even you are off sick, your PHI is likely to be extended to the new retirement age (though it’s still best to check). However, if you are no longer employed there’s the chance it will end at 60 and you won’t be abe to get a state pension until you’re 67 (depending on how old you are now). Jak


  5. Clare

    Hi, I’ve just found this. I’m in the same situation – 59 years old, dependent on a PHI for income but it’s due to end in May 2017 but I won’t get a state pension for 7 more years. I’ve joined the WASPI campaign and they are trying to challenge the government’s policy change in the high court.
    Have you talked to James Millar Craig at Royds solicitors. He does a lot of work on PHIs and may have helpful things to say. Clare


    1. Jak Post author

      Hi Clare

      Thanks so much for the comment, though really sorry to hear you’re in the same position and that time is running out for you.

      I have now contacted the Financial Ombudsman, who said if I brought a case against my insurers I’d lose as they haven’t done anything wrong. He said *the Government* are discriminating against me but gave me no options on what to do about that!

      I contacted the Equality Advice Service, who also agreed the Government were discriminating against me and told me to find a solicitor. I’ve tried 12 so far and none will take the case – I have too much income (because of the PHI) to qualify for Legal Aid but no money to pay 😦 Big firm Irwin Mitchell wanted £2000 to even *look* at the case, and could then have turned round and said I had no case!

      I did email WASPI but didn’t get a reply. No-one wants to take this on because it’s huge – to sue the Gvt would cost a king’s ransom and I can’t pay it.

      I’ve contacted all the broadsheet newspapers, Watchdog and Panorama and not even had a single reply.

      I will email Royds – thanks for the info. I also thought I’d email the new Labour Disability MP. My own MP is Conservative so isn’t the slightest bit interested in helping me bring down his own party.

      Jak x



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