What Is The UK's Best Income Protection Insurance In 2024?
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As a leading employee benefits provider, Unum UK protects businesses and workers with policies such as Income Protection, Life Insurance and Critical Illness Cover.
As well as providing employee benefits, Unum also offers Executive Income Protection. This is a type of Income Protection aimed specifically at company directors, contractors and other professionals working through a limited company.
Unum Executive Income Protection Coverage | |
|---|---|
Maximum Cover | 80% of gross (pre-tax) earnings |
Premium Type | |
Maximum Claim Duration | Full Cover to Term Limited Payment Term |
Incapacity Definition | |
Deferred Period | 4 / 8 / 13 / 26 / 52 weeks |
Indexation | Optional |
Waiver of Premium | Automatic |
Executive Income Protection mostly covers high earning, office-based professionals. Because of this, it may therefore be expensive or unavailable to workers with higher risk occupations, such as those involving manual work.
Josh Martin
Independent Protection Expert at Drewberry
Unum’s Executive Income Protection can cover up to 80% of your earnings up to a maximum of £25,000 a month (£300,000 a year). This is one of the highest levels of Income Protection available in the UK, making it suitable for high earners.
Unum takes into account the following when considering eligible earnings to cover:
If you add this optional benefit, Unum pays the employer’s National Insurance Contributions the company would normally pay on the benefit when transferring it to an employee. The maximum cover available is £40,000 per year.
Unum also lets employers insure the pension contributions they would pay to an employee if they were off work due to illness or injury. With this option, Unum pays up to a third of an individual’s current earnings towards their pension.
Unum caps this benefit at £50,000 per year.
If the policyholder dies in the first 12 months of a claim from the same illness / injury which caused the claim, Unum pays a lump sum of 12 times the benefit amount (less any benefit it has already paid).
Should a covered employee leave the business, they can transfer the policy to a new employer without the need for new underwriting. However, in order to do this the new employer must agree to pay the premiums and accept the plan’s terms and conditions.
If the new employer doesn’t want to take on the policy, the employee who is leaving can put the plan into their own name and switch it to a personal Income Protection policy. At this point, they become responsible for paying the premiums themselves.
Unum lets individuals suspend cover for up to 12 months if the policyholder stops working / takes a career break. This benefit might be particularly useful for contractors / other professionals who take long breaks from work or have inconsistent workflow.
If you add this for an additional premium, Unum increases your monthly benefit by 20% if you have been receiving a benefit for more than 2 years and are unable to perform daily tasks such as dressing yourself, climbing stairs or holding a pen.
You must select this when initially setting up the plan — it cannot be added on later.
In the event of a claim, Unum automatically waives premiums. This also applies if an employee chooses to take a career break.
Unum offers the option of index-linked cover, which means the benefit increases each year in line with inflation based on the Retail Prices Index (RPI). Unum caps this increase at 12% each year. You can also choose an increasing benefit that rises each year at fixed rate of 5%.
It’s important to remember that premiums also rise in line with any increases to your benefit.
If an employee goes through one of the following life events, Unum lets you increase the benefit without further medical evidence:
Unum offers a number of additional benefits with its Executive Income Protection policy. Some of these are free; however, others come with an additional cost.
Unum offers an employee and employer assistance programme through LifeWorks. This offers a range of support services covering topics such as life, money and wellbeing. Services include:
This offers a range of personal mental, physical, financial and social assessments for employees. These can help individuals identify areas they need to focus on and are backed up with tools and resources to help them make improvements.
The CareNow programme gives employees access to eight interactive modules based on Cognitive Behavioural Therapy (CBT) principles. These help support individuals with things such as anxiety, relationships and communication.
Unum’s EAP is accessed via the Help@hand app, which also provides employees and their family with access to:
Unum’s vocational rehabilitation consultants are available to offer guidance and support to employees returning to work.
This includes assessing their emotional and physical conditions, as well as providing training for managers and HR teams to help prevent stress, sickness and injuries around the workplace in the first place.
Unum’s Executive Income protection can only be purchased by the employer of the policyholder. Individuals cannot buy it as a standalone personal policy.
However, business owners can use their limited company to buy cover for themselves. Read more on using your limited company to pay for your Income Protection here ⟶
The maximum benefit for this policy is 80% of your earnings, with benefits capped at £300,000 per year.
While 80% of your earnings is the highest benefit available (the typical maximum is up to 70% with a personal plan), this is due to the fact that HMRC taxes the benefit from an executive plan. You therefore insure a higher figure to insure you get the correct payout net of tax.
Unum’s maximum annual benefit of £300,000 per year of £25,000 per month is also very high, regardless of the 80% earnings limit.
Unum uses the Own occupation definition of incapacity to price its policies. While this means the policy covers you if you can’t do your specific job role, it does mean the plan is less suitable for those in riskier occupations.
If your job involves any degree of manual work or site visits, you might face more expensive premiums and be better off with another provider / plan.
Unum’s Income Protection policy has no standard underwriting limits. This means that, if you don’t make any medical disclosures when you apply, then regardless of your age or the benefit Unum won’t require medical examinations or GP reports.
For limited payment terms, Unum will only pay a benefit for the maximum term chosen for each single episode of incapacity.
For example, if someone claims for 2 years for cancer before recovering and going back to work, Unum would not accept a further claim for cancer should it later return.
If you only get a benefit for part of the limited payment period and later on claim again for the same condition, Unum reduces the payment period limit by the amount of time you previously spent claiming for that same condition.
It’s possible to insure employee and employer National Insurance liability as well as employer pension contributions. This can be a good option for company directors who might want to maintain pension contributions while they can’t work.
As you can see, when looking to compare Income Protection Insurance there are lots of points to consider. With so many factors and a lot of different terminology at play, it can be tricky to do an accurate like-for-like comparison between providers.
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For help and fee-free advice on Income Protection, please don’t hesitate to get in touch. You can reach us on 02084327333 or email help@drewberry.co.uk.