Permanent Health Insurance vs Income Protection

Your employee benefits package plays a hugely important role in attracting the best candidates for a role and retaining them over the longer term, but deciding which benefits to offer can be a real challenge for HR teams that are likely working to a strict budget. Among the myriad options out there, Permanent Health Insurance (PHI) and Income Protection are two standout choices for businesses looking to support their team during difficult times.

While both options provide a financial safety net for employees facing illness or injury, they differ significantly in scope, duration, and cost, and choosing between them requires a clear understanding of both your team’s diverse needs and your organisation’s goals.

In this guide, we’ll explore the key differences between Permanent Health Insurance and Income Protection, helping you weigh the pros and cons of each. Whether you’re looking to support long-term employee retention or seeking a flexible, cost-effective solution, we’ll break it down to help you make an informed choice. And with YuLife’s innovative approach to employee wellbeing, you’ll see how Group Insurance can go beyond protection to actively enhance your team’s health and happiness.

What is Permanent Health Insurance (PHI)?

Permanent Health Insurance (PHI) provides long-term financial support for employees who cannot work due to illness or injury. It typically replaces a percentage of the employee's salary and can continue until retirement, recovery, or death, depending on the policy terms.

PHI is often seen as a way to ensure stability and loyalty among employees, particularly in businesses with a focus on retaining top talent. However, it can come at a higher cost, as it offers a longer coverage period and more extensive support than other forms of insurance.

At YuLife, we believe PHI is an investment in your employees’ wellbeing. By providing peace of mind, PHI helps foster a more engaged and secure workforce.

What is Group Income Protection (GIP)?

Group Income Protection serves a similar purpose but is designed to cover a shorter duration. It typically pays out a portion of an employee’s salary during the period they are unable to work, often for a set timeframe, such as one to two years.

This makes Group Income Protection a more flexible and cost-effective option for businesses—particularly those with younger or more transient workforces. It provides critical financial support during recovery while allowing businesses to manage costs more effectively.

YuLife’s Income Protection Insurance in partnership with MetLife focuses on delivering fast, effective support for employees, encouraging a quick recovery and return to work. We provide your team with access to support services that make a difference, such as a 24/7 confidential helpline and structured counselling sessions, as well as virtual GP access and personalised absence management support through HCB Group.

Is Income Protection worth it for employers? We believe so!

Both options have their advantages depending on your workforce's needs and budget.

When should businesses choose Permanent Health Insurance or Income Protection?

• Choose Permanent Health Insurance: If your workforce consists of senior employees or highly specialised roles where retention is critical, Permanent Health Insurance can provide peace of mind and reinforce loyalty.
• Choose income protection: For businesses with younger, more dynamic teams or those seeking a cost-efficient solution, Group Income Protection can offer the right balance of support without the higher financial commitment.

Every business is unique, and factors such as workforce demographics, industry requirements, and budget will influence the best choice.

Both Permanent Health Insurance and Income Protection have their merits, but the right choice depends on your business's priorities. If you’re unsure, YuLife is here to help! Our innovative group insurance products focus on holistic employee wellbeing, ensuring that every benefit contributes to a healthier, more productive workforce.

Ready to make the choice? Discover how YuLife can transform your employee benefits strategy by combining financial protection with wellbeing-focused solutions.

About YuLife

YuLife is working to reimagine the insurance industry by protecting lives, rewarding living and inspiring life. We’re on a mission to transform traditional insurance into a life-enhancing experience each employee will value and use daily. 

How does it work?

Our award-winning app uses behavioural science and game mechanics to reward your people for living well while offering protection in case of crisis. And with our top-rated employee assistance programme, your team gets access to mental, financial and social support, virtual GPs, nutritionists, life coaches and more to help them live their best lives.

Because we believe that your employees should benefit from their insurance from day one — and that wellbeing should be accessible every day, for everyone.

Request a demo for your team today.