Can my income protection premiums increase over time?

Can an income protection insurer increase my premiums over time? I am worried that the premiums might rise too much in the future as I get older or if I need to make a claim.

Question asked by Priya Patel
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Answered by Robert Harvey

With income protection there are a number of options to choose from with regards to the insurer’s right to increase premiums over time. Please see below for the various options available.

Please note that these options are usually only available for long-term income protection plans. Payment protection plans only come with reviewable premiums as they are rolling contracts rather than providing cover for a specified term, such as 15 years.

Guaranteed Premiums

With long-term income insurance policies it is possible to include the ‘guaranteed premiums’ option were the premium charged by the insurer remains unchanged irrespective of your age, number of claims made or the insurers overall claims experience.

Essentially, for an income insurance plan with guaranteed premiums the insurer has no right to change the amount charged over time based on these factors.

Reviewable Premiums

Short-term income protection plans (such as accident, sickness and unemployment policies) and some long-term plans come with ‘reviewable premiums’.

This means that the insurer does have the right to change your premiums but only based on general factors, such as the overall claims experience across all their customers and changes in interest rates, for example.

Also see: Guaranteed or reviewable premium income protection?

Age Rated Premiums

It is also worth noting that some insurers have ‘age-rated’ (or ‘low-start’) plans where the premiums increase with age. Care needs to be taken with these plans as the premiums can look very attractive upon taking out the policy but can increase rapidly over time and work out much more expensive over the term of the policy.

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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.
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