Organisations are constantly reviewing their strategies and looking for ways to attract and retain talent. One of the effective ways of achieving the above is for organisations to consider Permanent Health Insurance (PHI) for their employees.

This insurance enables employees to continue getting a salary when they are not able to work due to an illness or an injury.

What is Permanent Health Insurance?

There are some illnesses or injuries that take longer to heal, and employees exhaust their sick leave. This is where having PHI becomes beneficial. The cover provides income to the employee when their paid leave days run out.

However, the illness or injury should affect the person’s ability to continue doing the work or occupation they were specifically hired to do. For instance, if an employee is hired as a receptionist and gets injured but can fulfill their duties using a wheelchair, then the insurance will not apply.

Depending on the premiums chosen, the payout ranges from 50% to 75% of an employee’s monthly salary. The payout continues until the employee is fit to return to their original occupation, they get employed in a different occupation or they retire or die – whichever comes first.

PHI is available in the market as a standalone product or can be taken as an addition to either life assurance, pension, or provident fund.

Advantages of having Permanent Health Insurance

The advantages are numerous. Employers who take up PHI for their employees show that they care for employees and maybe rewarded with loyalty, retention of skilled employees, high employee morale, and high productivity.

This is because employees work with peace of mind knowing that should anything tragic happen to them, and their sick leave runs out; they will continue to receive an income.

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Conditions associated with Permanent Health Insurance

Meeting medical criteria

An employee must have been on sick leave for a specified period and their sickness or injury must interrupt their ability to carry out the duties for which they are employed and insured.

Waiting period

A waiting period is often attached to PHI. The benefit will payout if the employee is still incapacitated when the waiting period has been completed. It is recommended that the waiting period be linked to the expiry of the employer’s sick leave. For example, if the employer offers a month of paid leave, the suggested waiting period would be a month. This allows PHI to start once the sick leave days end.


This is a key factor to consider. The longer the waiting period the more affordable the premium is for the participating employer.

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