Income protection

Also known as permanent health insurance or PHI, this type of plan is designed to replace your salary if you are unable to work through temporary illness or disability. The policy pays a monthly tax-free income until you recover - right up to retirement date if necessary. The payout can be level or set to rise with inflation. The maximum cover you can have is typically half of your gross income but as it is paid tax free it should mean that you can maintain a similar level of take home pay.