Can I take out two income protection insurance plans?

I’m just about to take out some income cover but wondered if I can have two plans with two different income protection insurers? I essentially want to be able to cover 100% of my salary, is this possible?

Question asked by Vijay Kilbane
Compare Top 10 UK
 Protection
Insurers
 
Takes approx. 60 seconds
Type of Policy
Income Required
per
month
Date of Birth
Loading your options...
Thank you for using our Quote Tool
If you need some help, just call us!
T: 02084327333
Our in-house Experts are here to provide Whole of Market Advice!
Our Experts can answer all your questions
Our Experts can send you more appropriate options based on your personal circumstances

Very important if you are either Self-Employed or a Company Director.

Our online quote tool is good but our Experts are better

Oue Experts have access to far more insurers and can often find a better deal offline.

Saves you time, let our Experts do what they are best at

Answered by Tom Conner

This is a very common question. Many people often make the mistake of over-insuring by taking out two income insurance plans in order to try and cover 100 percent of earnings.

Why only a percentage of income can be covered:

The issue is that insurers will only allow you to receive a certain proportion of your pre-incapacity earnings whilst out of work. Essentially, insurers do not want you to be just as well-off out of work as when you were in work, so there is always an incentive to go back to work.

Why two policies cannot be taken out:

The title to this section is a little misleading, you can take out two plans but just as long as the total level of cover doesn’t go over the maximum allowable for each insurer.

At claim stage an insurer will ask if you have any continuing income either from your job or any other insurance policies. If you have continuing income the insurer would reduce your level of cover so that you are not receiving more than the maximum they allow.

As an example, if you had two plans covering 50% of income and both insurers would only allow you to cover a maximum of 50% of income then only one plan would payout, the first plan you took out. The premiums you paid for the second plan would effectively have been wasted.

On the other hand, if you had only insured 25% of salary with each insurer (resulting in total cover of 50% of income) then there would be no issues at all.

So, how much can be covered?

Around half of income protection insurers will allow you to cover a maximum of 50% of your gross (taxable) earnings; however this does depend on your level of earnings as some insurers will allow a higher proportion for lower incomes.

Other insurers will allow you to cover up to 65% of earnings but it just means that the choice of insurers is very limited. It is important to note that the benefit paid out by personal income protection is tax-free.

More Info: With Income Protection How Much Can I Cover?

My earnings are low and I pay little tax

For some people who earn a low level of income it will be the case that gross and net earnings are very similar (given the personal tax allowance).

This can cause issues gaining enough cover as nearly all insurers base the level of cover on gross rather than net salary and often leads people think about trying to take out two income protection policies.

If this applies to you please pop us a call as there are a very small number of plans that do not take earnings into account, just so long as you’re working more than 16 hours per week. The Bills & Things plan by The Exeter is one such example.

maximum income protection
 
This information does not constitute financial or other professional advice. You should consult your professional adviser or contact us directly on 02084327333 should you require financial advice. It is important to ensure any insurance policy you take out is suitable for your needs.
Compare Top 10 UK Insurers
  Takes approx. 60 seconds
 - 
Need help? 
Call us on 

Frequently Asked Income Protection Insurance Questions

 
I was wondering whether income protection insurance premiums can go up with age? I can afford the premiums...
 
What types of accident and sickness cover are available and how does this type of insurance work? Is...
 
I read that stress is covered on Income Protection. Is...
 
I’m looking to take out Income Protection but i don’t understand what is meant by the excess...
Need Help? Live chat now and get an instant answer from our Experts...

Neil
Pensions

Victoria
Insurance
Our Latest Reviews
Mark France
02/01/2018

Josh at Drewberry was extremely helpful and friendly in answering my many questions about the policy before I went ahead.

Mark Walters
06/01/2019

Drewberry was the only website I could find that would give me an indicative Relevant Life cover quote. Victoria at Drewberry was very helpful throughout the whole application process.

Paula Cummings
24/12/2018

They gave me good advice and weren’t pushy! I felt that I was getting what I asked for and I’m happy with the final product that I bought.

We are rated 4.9/5 based on 1966 independent client reviews.
To read more of our independent client reviews click here →
REVIEWS
EXCELLENT
4.92 / 5 Average
1916 Reviews
Verified Buyer
Overall Rating
The whole process was a pleasure. Drewberry we're easy to deal with, polite, knowledgeable and helpful
Verified Buyer
Overall Rating
Very good, clear service would recommend to friends and family
Anon
Overall Rating
Sam Carr provided an efficient and professional service.
Verified Buyer
Overall Rating
Sam Carr provided a professional but enthusiastic service and helped make the whole process very straight forward. Goodness knows I have been through enough application forms recently. My insurance product was never going to be easy to find and I had been rejected on a number of other occasions through others ironically due to well managed common health conditions. I identified Drewberry in a last and disappointing trawl on th web to find someone that actually wanted to take on a difficult case like me. Some brokers wouldn't even consider me. When we applied for my first choice product Sam wasn't at all deterred by the long wait for my GP report or the final rejection that came back from the insurer, sadly I have become used to it. Within a day he had lined up the second choice and to my surprise he had hit the nail on the head and introduced me to the correct insurer and terms for my needs whilst nogotiating an excellent premium. I am extremely satisfied with what Sam has achieved for me and I would have no hesitation in recommending either him or Drewberry to friends, family and and business contacts. In the future, Drewberry will be my first point of contact. Many thanks!
Kym
Overall Rating
Tailored to my need and the staff gave very good service