We have created a range of useful product pages and comparison tools to help make your life easier when it comes to comparing Income Protection products.
Below is an overview of all the key policy factors and things to consider when setting up your Income Protection Insurance. You can also use the menu bar above to select insurers and find out more about their individual policies.
One size doesn’t fit all when it comes to Income Protection. You need to look carefully at the different policies and options available to find one that matches your needs and circumstances.
Definition: Analysis performed by insurers to price your policy and decide your level of cover.
What to look for: Income Protection will always be based on your full medical history, which will involve answering a series of medical questions at the application stage. Inferior policies, such as Payment Protection Insurance, may not ask medical questions until it’s time to claim, meaning you won’t know what you are and aren’t covered for until it comes time to make a claim.
Definition: The regular payments you make to insurers in exchange for your policy.
What to look for: There are three different types of premium to look out for. The type of premium you choose will depend on your personal circumstances:
Definition: The amount of income you are entitled to when you claim.
What to look for: Income Protection benefits are based on a percentage of your income, with the average being 50-65% of your earnings.
Definition: The terms you have to meet in order to be entitled to your payout.
What to look for: ‘Own Occupation’ is the best definition of incapacity because it allows you to claim on your policy as long as you are unable to perform necessary tasks in your own occupation.
Other definitions of incapacity, ‘Suited Occupation’ and ‘Any Occupation’, won’t allow you to claim if you are still capable of working in a job you are suited for or any job available, respectively.
Definition: The amount of time you need to spend out of work before you can start claiming benefits.
What to look for: Day 1 cover is the shortest deferred period and entitles you to benefits from your policy from the first day of your incapacity (backdated to day 1 after three days of incapacity). Longer deferred periods, on the other hand, can save significant sums on your policy and range from 4 weeks to 2 years.
AIG Life Insurance Ltd is the official trading name of the UK life insurance arm of US insurance giant American International Group Inc. The insurer got its foothold in the UK protection market when it acquired Ageas Protect in 2014. AIG offers cover up to 60% of the first £30,000 of your salary; 55% between £30,000 and £100,000 of your salary; and for 45% of any salary exceeding £100,000.
Aviva is one of the largest insurers in the UK with origins that can be traced back all the way to 1797. Its Income Protection policy offers a maximum benefit of 55% of your earnings to a maximum cease age of 70. It also includes cover specifically for fractures and additional support services.
British Friendly was founded in 1902 to provide sickness benefits for travellers. It is a friendly society with more than 14,000 members. British Friendly is known for having some of the highest claims payout rates out of the top insurers and in 2016 were awarded 5 starts by Defaqto. Its Income Protection offers cover up to the lower of 70% of your pre-tax earnings or £45,000 per year.
Cirencester Friendly is the 8th largest Income Protection provider in the UK and has been providing protection products since 1889. Today, it has over 36,000 members and has won several awards for its Income Protection and customer service. Its Income Protection covers up to 65% of your earnings and offers Day 1 cover.
With links going back as far as 1888, The Exeter as it is today was founded when two friendly societies – The Exeter Friendly Society and Pioneer Friendly Society – joined forces. It offers two policies designed for different workers: Pure Protection Plus, a long-term plan designed for higher risk workers where you can insure up to £10,000 a month and Income One Plus, for lower-risk workers, which can cover 60% of your income up to the first £100,000 and 40% of the rest of your income.
Legal & General is a well-known provider of financial services in the UK. Founded in 1836, it now has as many as 10 million customers worldwide and offers both short- and long-term options for its Income Protection policies. It offers to cover up to 60% of your earnings up to your 70th birthday.
Liverpool Victoria offers a range of products to protect your earnings. It has more than 5.8 million customers in the UK. Liverpool Victoria can cover as much as 60% of your income with its Income Protection policy.
Founded in 1861, Royal London began as a friendly society before becoming a mutual society in 1908. Royal London previously owned and operated various brands, including Bright Grey and Scottish Provident, before uniting them under the Royal London name in 2015. Today, the Royal London brand is one of the most recognisable amongst the top UK insurance providers. It offers cover up to £250,000 per year.
Despite being one of the youngest providers of Income Protection, founded in 2007, Vitality has grown to become one of the UK’s top protection companies. In addition, Vitality was the first insurance provider to award their customers for health living. Its comprehensive policies can cover as much as 60% of your earnings with an unlimited claim duration.
Definition: How often insurers pay out when customers try to claim.
What to look for: Insurers that publish their payout rates show their commitment to transparency, while consistently high payout rates show a dedication to customers.
Definition: Supportive services and rewards that insurers offer policyholders at no extra cost.
What to look for: Look for services and rewards that you will benefit from and actually use. Consider benefits such as AIG’s ‘Best Doctor’ services as examples of the sort of valuable additional benefits that come as standard with certain providers’ policies.
Not all of the policies we have reviewed can be purchased directly from the insurer. Some can only be applied for through a financial adviser, like Drewberry.
Taking out Income Protection can be a bit of a minefield. Our experts are on hand to make sure you have all the information to make an informed decision and set-up the most appropriate cover.
We started Drewberry because we were tired of being treated like a number and not getting the service we all deserve when it comes to things as important as protecting our health and our finances. Below are just a few reasons why it makes sense to let us help.
I had the pleasure of dealing with Jake Mills in organising my insurance. Jake was fantastic to deal with — his patience and understanding really helped.